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MOJ rejects MOF’s tax collection on vans
2009-1028
The Ministry of Justice (MOJ) has affirmed that the move by the Ministry of Finance (MOF) to collect tax arrears on 550 imported vans is illegal.
When is a van not a van?
Le Hong Son, Head of the By-law Document Inspection Agency under MOJ, said that his agency has received many complaints from businesses on the MOF decision by MOF to collect trillions of dong worth of tax arrears on 550 imported vans.
The ministry says that the luxury tax law, valid prior to 2008, and the Government decrees guiding the implementation of the law, did not stipulate that the luxury tax applied to vans.
Meanwhile, MOF’s circular No 115 dated December 16, 2005 stipulated that vans (the vehicles designed to carry both passengers and cargos) were subject to luxury tax. This means that the ministry “expanded” the list of luxury tax subjects.
Only the National Assembly has the power of stipulating whether to impose luxury tax on vehicles, and the power is clearly stipulated in the Special Consumption Tax Law (luxury tax law) enacted on November 14, 2008.
MOJ has also pointed out that it was not the function of MOF to release the Dispatch No 8543 dated July 21, 2008 to set specifications for vans.
There are two kinds of vans in accordance with international and Vietnam’s standards. The first one, including 1-2 rows of seats, used for carrying cargo or passengers. The second one is used just to carry people. There are none designated to carry both passengers and cargo.
MOJ said that the Government has assigned the Ministry of Transport to classify vehicles. Meanwhile, the Ministry of Public Security has the function to find vehicles that have changed parts after importation.
MOF has no jurisdiction to set instructions on what kinds of vehicles should be called vans.
In mid September 2009, MOF released a document requiring local customs agencies to collect tax arrears on 550 imported vehicles that the ministry believed had been changed into vans in order to help importers evade taxes. The ministry has decided that the imported vehicles, like other 16-24 seat vehicles must be imposed 15 percent of luxury tax.
MOF has insisted that Vietnam has been pursuing a consistent policy since 1995, imposing a 15 percent of tax on 16-24 seat vehicles, including vans, which are designed to carry both passengers and cargo. This means that vans have never been subject to the products which can enjoy luxury tax exemption.
The ministry said that the decrees of 2003-2005 did not stipulate tax impositions because of “some mistakes.”
When is a van not a van?
Le Hong Son, Head of the By-law Document Inspection Agency under MOJ, said that his agency has received many complaints from businesses on the MOF decision by MOF to collect trillions of dong worth of tax arrears on 550 imported vans.
The ministry says that the luxury tax law, valid prior to 2008, and the Government decrees guiding the implementation of the law, did not stipulate that the luxury tax applied to vans.
Meanwhile, MOF’s circular No 115 dated December 16, 2005 stipulated that vans (the vehicles designed to carry both passengers and cargos) were subject to luxury tax. This means that the ministry “expanded” the list of luxury tax subjects.
Only the National Assembly has the power of stipulating whether to impose luxury tax on vehicles, and the power is clearly stipulated in the Special Consumption Tax Law (luxury tax law) enacted on November 14, 2008.
MOJ has also pointed out that it was not the function of MOF to release the Dispatch No 8543 dated July 21, 2008 to set specifications for vans.
There are two kinds of vans in accordance with international and Vietnam’s standards. The first one, including 1-2 rows of seats, used for carrying cargo or passengers. The second one is used just to carry people. There are none designated to carry both passengers and cargo.
MOJ said that the Government has assigned the Ministry of Transport to classify vehicles. Meanwhile, the Ministry of Public Security has the function to find vehicles that have changed parts after importation.
MOF has no jurisdiction to set instructions on what kinds of vehicles should be called vans.
In mid September 2009, MOF released a document requiring local customs agencies to collect tax arrears on 550 imported vehicles that the ministry believed had been changed into vans in order to help importers evade taxes. The ministry has decided that the imported vehicles, like other 16-24 seat vehicles must be imposed 15 percent of luxury tax.
MOF has insisted that Vietnam has been pursuing a consistent policy since 1995, imposing a 15 percent of tax on 16-24 seat vehicles, including vans, which are designed to carry both passengers and cargo. This means that vans have never been subject to the products which can enjoy luxury tax exemption.
The ministry said that the decrees of 2003-2005 did not stipulate tax impositions because of “some mistakes.”
Source: Vietnamnet/VNE
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