New Decree Supports Domestic Vehicle Manufacturers

Effective from July 8, a new decree revises the criteria for minimum production volume, enabling enterprises to benefit from preferential import tariffs on automotive components. This initiative is designed to bolster domestic vehicle manufacturers and assemblers, with a special focus on those producing environmentally friendly models.

Inclusion of Green Vehicles in Production Calculations

The decree specifies that manufacturers producing both traditional and green vehicles (electric, fuel cell, hybrids, biofuel-powered, or natural gas vehicles) can include the output of environmentally friendly models in their total and model-specific production volume calculations. This combined figure determines eligibility for preferential import tariffs.

Photo: Cars parked on a street in Hanoi in December 2022. Photo by VnExpress/Pham Chieu

Consolidation of Production Volumes for Affiliated Companies

Companies holding over 35% of the charter capital in other automotive manufacturing or assembly firms can consolidate their vehicle output. This combined production volume aids in meeting the minimum threshold for preferential tariffs, with the parent company responsible for verification.

Tax Refunds and Penalties

Customs authorities will process tax refunds based on the number of vehicles manufactured during the eligibility period. Inaccurate declarations by parent companies or affiliates will result in tax recovery measures and penalties.

Adjustments in Export and Import Duties

The decree also announces increases in export and preferential import tax rates for certain commodities, including yellow phosphorus and polyethylene categories, to safeguard national resources and support strategic industries.