Claiming VAT on Truck Purchases in Hanoi: A Guide

Anh Tuan, a construction material hauler from Gia Lam, Hanoi, recently purchased a Dongfeng 8-ton truck from a dealership on Nguyen Van Linh Street. Excited about his new truck, he quickly realized he hadn’t fully considered the tax implications. After learning about VAT deductions from fellow drivers, he frantically searched for information. Luckily, he found this helpful guide from XE TẢI HÀ NỘI.

Avoid Tuan’s tax troubles! This article explains everything you need to know about claiming Value Added Tax (VAT) deductions when purchasing a truck in Hanoi.

What is a VAT Deduction on Truck Purchases?

Simply put, when you buy a truck, you pay a 10% VAT on the purchase price. However, if the truck is used for business purposes (like Tuan’s construction material hauling) and you meet certain conditions, you can deduct the paid VAT from your future business tax liabilities.

A Dongfeng truck

Benefits of Claiming a VAT Deduction

• Reduced Tax Burden: Lowering your tax bill is always a plus, especially for expensive truck purchases. VAT deductions provide significant savings for businesses.
• Improved Cash Flow: Instead of a large upfront tax payment, you can reinvest those funds back into your business.

Requirements for Claiming a VAT Deduction on Truck Purchases

To qualify for this tax benefit, you must meet the following requirements:

• Business Use: The truck must be primarily used for business activities, such as transporting goods or passengers.
• Valid VAT Invoice: You must possess a valid VAT invoice for the truck purchase. Carefully review the invoice details before accepting delivery.
• Asset Registration: The truck must be registered as a fixed asset of your business and put into use after purchase.

A person holding a tax invoice

Important Considerations

• Not all truck purchases qualify for VAT deductions.
• Different truck types have varying depreciation and deduction rates.
• Thoroughly understand tax regulations to avoid future complications.