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Which Tax Rate For Super Cars?

Which Tax Rate For Super Cars?

The fixed tax of $26,500 on the used imports which have the cylinder capacity of 5,000 cc and higher proves to be very low if compared to the tax rate of 70% imposed on brand new imports.

The HCM City Customs Agency has cleared two used super cars Roll Royce Phantom (manufactured in the UK in 2005 and 2006, cylinder capacity of 6,749 cc). The taxable values of the 2006’s and 2005’s cars defined by the customs agency were $216,000 and $194,000 respectively.

In fact, the database of Vietnam’s customs did not have the information about the selling price of the two super models, therefore, the HCM City Customs Agency had to refer to the information on the Internet, which said that a Phantom made in 2007 would be valued at $333,350/unit.

With the defined taxable values, the total tax sum the importers had to pay for the car manufactured in 2006 was $183,712 (fixed tax rate of $26,500 for over 5,000 cc cars, luxury tax and VAT), and the car has the post tax value of $399,712. As for the car manufactured in 2005, the tax sum was $169,412 and the post tax value was $363,412.

Supposed that a brand new Phantom has been imported to Vietnam. In this case, the taxable value would be $333,350, and the post tax value of the car (70% of import tax, luxury tax and VAT) would be over $900,000, much more expensive than the used import car of the same model.

Experts said that super cars bear low taxes due to the tax calculation method applied by customs agencies. Returning to the Phantom’s case, the HCM City Customs Agency defined the taxable value after considering the Notice No 2648 dated June 16, 2007 by the General Department of Customs (GDC). The notice provided the formula for defining the taxable value of the cars the prices of which are not listed in customs’ database as follows: “quoted prices on Internet ¬– (minus) 20% (for expenses like negotiations, and for paying tax at the export country) ¬– (minus) 10% if the used car was manufactured one year before” (20% if the car was manufactured two years before).

However, in many cases, GDC and HCM City Customs agency do not agree in calculating taxes for the imported cars.

An official from GDC said that the local customs agency was right when using the quoted price of $333,350 for reference, but it was wrong in the calculation method.

There are six methods of calculation that GDC has suggested, and GDC thought that the local customs agency did not follow the documents guiding the tax calculation. According to GDC, the local agency should have analyzed all the information available at this moment to define the taxable value instead of defining the value as it did.

Meanwhile, Vu Thuy Hoa, Head of the Taxable Value Division under the HCM City Customs Agency, the value of the car declared by the importer was $160,000, and that there was no better solution in this case.

In fact, the local agency used information from many sources already in calculating taxes. Mrs Hoa, on one hand, acknowledged that used super cars bear irrationally low taxes, but said that the problem lies in the fixed tax of $26,500 (applied for the cars with the cylinder capacity of over $5,000 cc), not in the tax calculation method.

Analysts said that importers would be the biggest beneficiaries in the deals of importing super cars. Maybach 62, Ferrari and other used cars could enjoy the ‘super low’ taxes, while the selling prices to customers remain ‘super high’.

được đăng bởi kude.punny @ 05:07