Retired diplomatic cars may be taxed

About 1,100 diplomatic vehicles sold to Vietnamese owners may be taxed at a rate of 20-30 percent of their value, the Ministry of Finance said yesterday.

The tax is being proposed for cars which otherwise would have qualified for tax exemptions enjoyed by diplomatic agencies and embassies in Viet Nam.

The ministry said it was developing a management mechanism for diplomatic vehicles of foreign agencies, organisations and individuals working in Viet Nam and would assign the Ministry of Foreign Affairs to oversee the system.

The Foreign Ministry would be responsible for controlling the volume of imported cars and the expiry of tenure of car users and managing the re-export by foreign agencies, organisations and individuals to their countries.

The Finance Ministry also proposed measures to deal with all kinds of vehicles with diplomatic number plates which were transferred or sold to Vietnamese owners without paying taxes.

The most difficult problem was now to handle individuals who had expired diplomatic terms but had not yet re-exported, destroyed or transferred their cars, the Finance Ministry said.

By the end of 2009, the Finance Ministry reported that 4,300 automobiles of diplomatic missions were imported into Viet Nam, of which 2,300 cars were not re-exported, destroyed or transferred according to regulations. Of the 2,300, about 1,100 had their foreign owners leaving Viet Nam after expired tenures.

As a result, the Ministry of Finance proposed to levy taxes on vehicles of this kind.

The ministry is considering levying a tax rate of 20-30 percent of their value.

The import tax rate for new cars is now 83 percent.