What regulations specify that under-24-seat cars are subject to excise tax in Vietnam?

What regulations specify that under-24-seat cars are subject to excise tax in Vietnam?

Under Article 2 of the Law on excise tax 2008  (amended by Clause 1 Article 1 of the Law on Amendments to Excise Tax Law 2014, the objects 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.

2. Services:

a/ Dance halls:

b/ Massage parlors and karaoke bars;

c/ Casinos; prize-winning video games, including jackpot and slot games and games on similar machines;

d/ Betting;

e/ Golf business, including the sale of membership cards and golf playing tickets;

f/ Lottery business.

Therefore, according to the regulations, under-24-seat cars are subject to excise tax according to Article 2 of the Law on Excise Tax 2008.

What regulations specify that under-24-seat cars are subject to excise tax in Vietnam? (Image from the Internet)

Are under-24-seat cars imported from abroad into free trade zones in Vietnam subject to excise tax?

According to Article 3 of the Law on Excise Tax 2008 (amended by Clause 2 Article 1 of the Law on Amendments to Excise Tax Law 2014), goods as stated above are not subject to excise tax in the following cases:

- Goods which are directly exported by producers or processors, or which are sold or entrusted by these producers or processors to other business establishments for export;

- Imported goods, including:

+ Goods as humanitarian aid or non-refundable aid; gifts for state agencies, political organizations, socio-political organizations, socio-political-professional organizations, social organizations, socio-profcssional organizations or people’s armed forces units; and donations or gifts for individuals in Vietnam within the quotas prescribed by the Government;

+ Goods transited or transported via Vietnamese border gates or borders, and goods transported to and from border gates under the Government’s regulations;

+ Goods temporarily imported for re-export and temporarily exported for re-import which are not subject to import duty or export duty within the time limit specified in the law on import duty and export duty;

+ Personal effects of foreign organizations and individuals within diplomatic immunity quotas; personal belongings within duty-free luggage quotas; and goods imported for duty-free sale under law;

- Aircraft, yachts used for transport of goods, passengers, tourists, and aircraft used for national defense and security purposes;

- 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;

- Goods imported from abroad into free trade zones, goods sold from the inland into free trade zones for use only in free trade zones, and goods traded between free trade zones, except under-24 seat cars.

Under the regulations, goods imported from abroad into free trade zones are exempt from excise tax, except for under-24 seat cars.

Thus, under-24-seat cars imported from abroad into free trade zones are subject to excise tax.

What is the excise tax rate applicable to under-24-seat cars in Vietnam?

Under Clause 2 Article 2 of the Law on Amendment to Law on Value-Added Tax, Law on Excise Tax, and the Law on Tax Administration 2016, the excise tax tariff is amended and supplemented as follows:

Therefore, the excise tax rate applicable to under-24-seat cars in Vietnam depends on the type of car and its capacity, as specified in the tariff above.