Are 4-seater electric cars subject to excise tax in Vietnam?

Are 4-seater electric cars subject to excise tax in Vietnam?

Under Clause 1, Article 2 of the Law on Excise Tax 2008 (amended by Clause 1, Article 1 of the Law on Amending Excise Tax Law), the goods subject to excise tax include:

Taxable objects

1. Goods:

a/ Cigarettes, cigars and other tobacco preparations used for smoking, inhaling, chewing, sniffing or keeping in mouth;

b/ Liquor;

c/ Beer;

d/ Under-24 seat cars, including cars for both passenger and cargo transportation with two or more rows of seats and fixed partitions between passenger holds and cargo holds;

e/ Two- and three-wheeled motorcycles of a cylinder capacity of over 125 cm3;

f/ Aircraft and yachts;

g/ Gasoline;

h/ Air-conditioners of 90,000 BTU or less;

i/ Playing cards;

j/ Votive gilt papers and votive objects.

...

Specifically, under Point d, Clause 1, Article 2 of the Law on Excise Tax 2008, under-24-seat cars, including cars for both passenger and cargo transportation with two or more rows of seats and fixed partitions between passenger holds and cargo holds are subject to excise tax.

Therefore, a 4-seater electric car is subject to excise tax.

Note: Ambulances; prison vans; hearses; cars designed with both seats and standing places for transporting 24 or more people; cars running in recreation, entertainment and spoils areas which neither are registered for circulation nor move on roads are not subject to excise tax. (According to Clause 4, Article 3 of the Law on excise tax 2008)

What is the excise tax rate for 4-seater electric cars in Vietnam?

Under the provisions at Point g, Clause 4, Section I of the excise tax Table stipulated in Article 7 of the Law on Excise Tax 2008 (amended by Clause 4, Article 1 of the Law on Amending Excise Tax Law, Clause 2, Article 2 of the Law on Amendments to Law on Value-Added Tax, Law on Excise Tax, and Law on Tax Management 2016, and Article 8 of the Law on Amending Public Investment Law, Investment Law, Law on Public-Private Partnership Investments, Housing Law, Tender Law, Electricity Law, Enterprise Law, Excise Tax Law, and Law on Civil Judgment Execution 2022) regarding excise tax rates applicable to under-9-seat electric cars as follows:

- From March 1, 2022, to the end of February 28, 2027: 3%\

- From March 1, 2027: 11%

Therefore, the excise tax rate of 3% shall imposed on 4-seater electric cars.

Are 4-seater electric cars subject to excise tax in Vietnam? (Image from the Internet)

What are the bases for calculating excise tax on 4-seater electric cars in Vietnam?

The basis for calculating excise tax on a 4-seater electric car is determined according to Article 5 of the Law on Excise Tax 2008, including the taxable price of the car and the tax rate.

Excise tax payable = excise tax taxable price x excise tax rate

Where:

(1) excise tax rate for a 4-seater electric car

- From March 1, 2022, to the end of February 28, 2027: 3%

- From March 1, 2027: 11%

(2) The excise tax taxable price for a 4-seater electric car is determined in Clauses 1, 2, and 4, Article 6 of the Law on Excise Tax 2008 (amended by Clause 3, Article 1 of the Law on Amending Excise Tax Law, Clause 1, Article 2 of the Law on Amendments to Law on Value-Added Tax, Law on Excise Tax, and Law on Tax Management 2016) as follows:

The excise tax taxable price for a 4-seater electric car is the selling price without excise tax, environmental protection tax, and value-added tax:

- For domestically produced 4-seater electric cars, it is the price sold by the manufacturer.

In case 4-seater cars subject to excise tax are sold to commercial business establishments that are parent-subsidiary companies or subsidiary companies within the same parent company as the manufacturer or commercial business establishments with related parties, the excise tax taxable price must not be lower than the percentage (%) of the average selling price of commercial business establishments that purchase directly from the manufacturer, according to the regulations of the Government of Vietnam.

- For imported 4-seater electric cars, it is the price sold by the importer.

In case 4-seater cars subject to excise tax are sold to commercial business establishments that are parent-subsidiary companies or subsidiary companies within the same parent company as the importer or commercial business establishments with related parties, the excise tax taxable price must not be lower than the percentage (%) of the average selling price of commercial business establishments that purchase directly from the importer, according to the regulations of the Government of Vietnam.

- For 4-seater cars sold in installment or deferred payment methods, the selling price shall base on one-time payment methods of such goods, excluding installment or deferred interest.