VN taxes on EU’s cars to fall to 0%

TAXES on imported cars from Europe to Vietnam will drop to zero per cent in the next nine to 10 years, creating new competitiveness in the automobile market.

Deputy Minister of Industr y and Trade, Tran Quoc Khanh made t he statement at a press conference held in Hanoi on Thursday.

Viet nam a nd t he EU of ficia l ly sig ned t he Europe-Vietnam Free Trade Agreement (EV FTA) a nd t he EuropeVietnam Invest ment Protect ion Agreement in Hanoi on June 30.

The agreements allow many goods, including cars, imported from the EU into Vietnam to enjoy zero per cent tax according to the tax reduction roadmap over the next seven to 10 years.

Currently, imported cars from the EU to Vietnam face taxes of 70 per cent, including those from luxury brands such as Audi, Mercedes-Benz, BMW, Volvo, Maserati and Volkswagen.

According to commitments under the agreements, the automobiles with engines above 2,500 cubic centimetre would enjoy ta x cuts to zero per cent after nine years while t hose of less t han 2,500 would be reduced to zero per cent af ter 10 years.

Khanh said there would be a shorter roadmap on tax reductions for automobile spare parts from the EU.

Owners of luxury cars imported from the EU would pay lower fees for maintenance and warranties, he added.

However, the deputy minister said the impact would not be too big as the Vietnamese car market is already diversified.

The EVFTA stipulates that Vietnamese tax cut commitments will not apply for used cars.

INGO WAGNER/DPA/AFP A new Volkswagen car is seen in the foreground as parked cars are ready for shipping at the car terminal of the port of Bremerhaven, northwestern Germany.