Property Tax on cars valued at more than VND 1.5 billion should be considered

Cars, yachts and airplanes valued at more than VND1.5 billion may be subject to property tax. Photo: Internet

However, the Ministry of Finance is also open to another option that is not to levy property tax on aircraft, yachts and cars. Because the international experience shows that only three countries are now imposing property tax on machinery, equipment and vehicles (including cars, aircraft and yachts, etc) are South Korea, Kazakhstan and Bolivia, of which, South Korea only levies tax on aircraft and yachts.

In addition, according to data from the Ministry of Transportation, 100% of registered aircraft and yachts are owned by organizations. No aircraft and yachts are registered for ownership by an individual. The tax rate is proposed at 0.3% and 0.4%.

At the same time, in order to ensure the stability of the taxable value and facilitate taxpayers in tax declaration, the taxable value is proposed to be stable within five years from the effective date of this Law.

Stability in the five-year cycle is as follows: If in the five-year cycle, there is a change in taxpayer or a factor leading to a change in the taxable value, the payable tax amount shall not be re-determined; If there are new taxable assets, the taxable value is also remains for the remaining time of the cycle (this content shall be prescribed in the sub-law documents).

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Facing the problems about trading of cars, yachts and aircraft, such as declaring lower value in invoice than the reality to evade taxes, the representative of the Tax Policy Department under the Ministry of Finance said that according to the plan to impose property tax on aircraft, yachts and cars valued at over VND 1.5 billion, the taxable value is the value of assets at the time of tax calculation prescribed by provincial-level People's Committees. For used aircraft, yachts and cars, the taxable value shall be determined as the value of the new asset multiplied by the percentage of remaining quality of assets promulgated by provincial-level People's Committees according to the using time of those assets at the time of tax calculation. Therefore, value declared on invoice is not important for the calculation process of property tax.