Regulations issued to stop tax fraud in auto market

Tax agencies would have the authority to intervene in cases where it suspects car dealers of tax evasion, according to a new circular issued by the Ministry of Finance (MoF).

Circular No71/2010/TT-BTC, which will take effect on June 20, is expected to result in the collection of several trillion dong that were uncollected because of false price declarations. Car dealers consistently record lower prices on their invoices than what the customers actually paid in order to pay lower taxes.

According to the circular, the tax agencies would have the right to adjust the price on the invoice if it discovers the price set by dealers was lower than the market rate. Dealers will have to pay the value added tax (VAT), corporate income tax (CIT) and personal income tax based on the price set by the tax authority.

The tax agencies will also send a list of the current market prices of cars and motorbikes to relevant authorities in cities and provinces to facilitate the calculation of vehicle registration fees.

Reasonable prices will be set by the tax agencies after a survey of the market is conducted. Surveyors will consult many sources, including the market price bulletin, manufacturers’ suggested retail prices and other trade establishments.

A task force in charge of market price surveys will be made up of representatives from price appraisal centres under local finance departments, local industry, and trade departments and local market control sub-departments.

The customs agencies have set fixed minimum prices for imported vehicles to calculate import and special consumption taxes because many vehicle importers have low-balled their import and sale price declarations in order to evade taxes.

According to the current regulations, car and motorbike manufacturers and dealers are required to report their annual car sales to the tax agencies. Required information includes total sales in the period, and retail and wholesale prices.

Viet Nam News

Tags: Vietnam Auto market, Vietnam automotive, Vietnam automotive industry