Car tax are the amounts of money that car owners or buyers must pay to the State. This is part of the tax system of many countries, including Vietnam.
Owning a personal car is becoming more and more popular in Vietnam. However, along with that joy comes a significant expense that the buyer must pay.
when the buy new and used cars, the buyer must pay taxes and fees such as value added tax, registration tax, special consumption tax, license plate stamping fee, inspection fee, road maintenance fee and civil liability insurance fee as well as car physical damage.
Although the taxes and fees for buying a new and used car are similar, there are still some differences. Because of these differences, the price of a new car is also calculated differently than that of a used car.
The Vietnam Automobile Manufacturers Association (VAMA) announced that total market sales of its member units in September 9 reached 2024 vehicles, recording an increase of 36.585% compared to the previous month. It can be seen that the Vietnamese automobile market is recording stable growth, leading to an increasing demand for information about taxes and fees when buying a car.
Preparing complete documents, calculating rolling costs, determining financial capacity and understanding the registration process are important factors when buying new and used cars.
So, when deciding to buy a car, what taxes and fees will you have to face? And how to calculate the total cost? Don't miss the following article!
Taxes and fees when buying new and used cars include: value added tax, registration tax, special consumption tax, license plate stamping fee, inspection fee, road maintenance fee, civil liability insurance fee and car physical insurance fee.
Value Added Tax (VAT) is an indirect tax levied on most purchases of goods and services in Vietnam. For cars, VAT is calculated based on the selling price of the car before adding other taxes. The current VAT rate for cars is 10% of the car's value.
For example: If the listed price of a new car is 1 billion VND, the VAT will be: 1.000.000.000 VND x 10% = 100.000.000 VND.
Registration tax is the tax payable when registering ownership and use of property with the competent state agency. For cars, the registration tax rate varies depending on the locality, ranging from 10% to 12% of the vehicle's value.
According to Article 5 of Decree 140/2016/ND-CP, the general formula for registration tax on old and new cars is as follows:
Registration fee = Registration fee calculation price x Registration fee rate (%)
Special consumption tax (SCT) is a tax applied to certain goods and services, including automobiles. The SCT rate for automobiles is calculated based on the cylinder capacity and number of seats, ranging from 10% to 150%.
The vehicle ownership price includes the listed price of the vehicle plus VAT, special consumption tax, and other costs charged by the dealer such as shipping, insurance, etc.
The formula for calculating car ownership price is as follows:
Ownership price = List price + VAT + Special tax + Other costs
The license plate fee is the fee that must be paid to obtain a license plate. This fee varies depending on the locality and type of vehicle. In large cities such as Hanoi and Ho Chi Minh City, the license plate fee for a car usually ranges from 20 million VND to more than 1 billion VND, depending on the form of license plate auction.
The inspection fee is a mandatory fee when inspecting the technical safety and environmental protection of a car. The current inspection fee for a car with less than 10 seats is 240.000 VND/inspection.
Road maintenance fees are annual fees levied to maintain and improve the road transport system. The fees are calculated monthly and depend on the type of vehicle:
Civil liability insurance (TNDS) is a compulsory insurance for all vehicles participating in traffic. The TNDS fee for cars with less than 6 seats is 437.000 VND/year.
Auto physical damage insurance is a voluntary type of insurance that protects the owner against property damage to the vehicle. The premium typically ranges from 1,5% to 2,5% of the vehicle’s value, depending on a number of factors, including the type of vehicle, year of manufacture, and coverage level.
Although buying a new and used car is subject to many similar taxes and fees, there are still some differences.
Comparison table of taxes and fees when buying new and used cars:
Fee type | New car | Old car |
Value Added Tax (VAT) | 10% on selling price |
|
Registration tax | 100% of the car's value | Remaining value of the vehicle |
Special consumption tax | Applicable according to regulations | No. |
Registration fee | First time free | Must Pay |
License plate fee | Must Pay | Must pay (if changing license plate) |
Liability insurance premium | Obligatory | Obligatory |
Vehicle physical damage insurance | Option | Option |
Service charge | May arise (vehicle delivery, registration…) | Possible changes (transfer of ownership, license plate change, etc.) |
Repair and maintenance costs | Usually low during warranty period | May be higher due to used vehicle |
Cost of replacement parts | Usually low during warranty period | May be higher due to old or hard to find parts |
Because taxes and fees are different when buying new and used cars, the price of a new car is calculated differently from the price of a used car.
The rolling price of a new car is calculated according to the following formula:
Rolling price = Listed price + VAT + Special consumption tax + Registration tax + License plate registration fee + Inspection fee + Road maintenance fee + Civil liability insurance
For example: Calculate the rolling price of a new car with a listed price of 1 billion VND in Hanoi:
The rolling price of a used car is calculated as follows:
Rolling price = Vehicle purchase price + Registration tax + License plate registration fee (if changing license plate) + Inspection fee + Road maintenance fee + Civil liability insurance
For example: Calculate the rolling price of a used car with a purchase price of 500 million VND in Ho Chi Minh City:
Preparing all documents, calculating the cost of ownership, considering financial capacity and registration procedures are common considerations when buying new and used cars. Specifically:
However, for new and old cars, there are also some notes to keep in mind:
When buying a new car you need to know:
When buying a used car, you need to know:
When buying a car from abroad, you will be subject to a number of special import taxes and fees, which are different from buying a car domestically.
Taxes include: import tax, value added tax (VAT), special consumption tax (if applicable) and registration tax. In addition, fees such as registration fee, vehicle quality inspection fee and road maintenance fee must also be paid.
These taxes and fees may be higher than for domestic cars due to import and consumption regulations.
If you want to buy a used imported car, see more articles Should I buy a used imported car?? The most detailed taxes and fees when purchasing.
Exemption from fees when purchasing a used car may be possible in some special cases, depending on local policies and legal regulations.
However, most fees such as registration tax, inspection fees and license plate fees must still be paid in full. Some places may reduce inspection fees for older cars if they have been inspected recently, but there are no general exemptions for other fees.
To save money on buying a used car, read this article. Experience in buying used cars safely, avoid losing money.
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