“Forceful” with enterprise that import car in the form of gifts, donations inappropriately

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Customs has tightened automobile import in the form of gifts and donations by post-clearance audit. Photo: Thu Hoa.

Da Nang Tax Department informed the National Steering Committee 389 of some objects taking advantage of policy on allowing import of cars in the form of gifts and donations, for fraud and tax evasion.

As reported by Da Nang Tax Department, the majority of automobiles imported in the form of gifts and donations to Da Nang are high value but when sold they record low invoice value, only 50-60% of cost of vehicles as determined by the customs authorities and inconsistent for trading on the market.

In order to promptly prevent acts of fraud and tax evasion, the General Department of Taxation has requested Da Nang Tax Department to comply with regulations in the management of Special Consumption Tax on domestic consumption, Enterprise Income Tax, Value Added Tax for business locally which import cars under this form.

Therein, each organization or individual in Viet Nam can only import 1 automobile and 1 motorcycle by a foreign organization or individual.

If a business or individual is allowed to import an automobile in the form of gifts, or donations, when receiving the vehicle the enterprise must be accounted in other income for calculation of enterprise income tax, personal income tax and declare tax for the value of imported cars and the cost of the imported vehicle as determined by Customs .

In the case of a business selling cars that have their origin as donations and gifts where the selling price is lower than the usual trading price on the market, the business will be need to pay Special consumption tax, Enterprise income tax, Value added tax under the provisions of the tax law.

The General Department of Taxation also asked local authorities to review and make a list of local businesses importing cars in the form of gifts and donations, the amount of sold cars to the second party, a list of re-bought cars from the importer to have the grounds to make a number of tax administration measures.

First action is to check immediately to determine the tax liability for businesses that have transferred automobiles as a source of gifts and donations are still in operation.

Second is to coordinate with relevant agencies to handle the vehicle transfer cases, which do not make tax settlement or fled from their business address. Simultaneously, the local tax office must promptly update the list of enterprises which do not pay taxes, tax evasion and all documents, bills that were issued from this enterprise to the data center of tax assessment management program and Electronic information page of Taxation department.