Vietnam VAT on Cars: What You Need to Know

You’ve likely heard the saying, “Buying a car is easy, maintaining it is hard.” A significant part of that “hard” comes from the various taxes and fees associated with vehicle ownership. Among them, the Value Added Tax (VAT) on cars is a considerable expense that anyone purchasing a vehicle in Vietnam should understand thoroughly. This article will address the most frequently asked questions about this tax.

The Value Added Tax (VAT) is an indirect tax levied on the value of goods and services sold. When purchasing a car, you will pay VAT to the manufacturer or dealer. The current VAT rate for cars in Vietnam is 10%.

To calculate the VAT on a car, you need to know the vehicle’s value (including registration fees). For example, if you buy a car priced at 700 million VND (excluding VAT), the VAT calculation is as follows:

VAT = Vehicle Value x VAT Rate

VAT = 700,000,000 x 10% = 70,000,000 VND.

Therefore, you will pay an additional 70 million VND in VAT when purchasing this car.

In addition to VAT, you will also need to pay other taxes and fees, such as:

• Registration Fee: Calculated based on the vehicle’s value, with rates varying by province.

• Environmental Protection Tax: Calculated based on the vehicle’s engine displacement.

• Vehicle Inspection Fee:

• Road Usage Fee: Calculated based on engine displacement and the number of years the vehicle will be used.

For a more comprehensive understanding of car VAT, you can consult resources from government agencies like the Tax Department, the Registration Department, or reputable automotive websites.

You can also seek advice from tax and legal consultants to address any specific questions you may have about car VAT.

Contact us for further consultation on car VAT.

Note:

• The information in this article is for reference purposes only. You should contact the relevant authorities for accurate information.

• This article provides only a basic understanding of car VAT. For a more thorough understanding of taxes and fees related to vehicles, you should consult reputable sources.

Illustration of actual car VAT

If you purchase a used car, the VAT will be calculated on the value of the used vehicle. This value is agreed upon by the buyer and seller.

Furthermore, keep in mind that VAT rates are subject to change based on government policy.

To avoid potential issues when buying a car, thoroughly research VAT information beforehand.

Illustration of car VAT law

We hope this article has provided a clearer understanding of car VAT in Vietnam. We wish you success in finding your ideal car.