Vietnam’s Ministry of Finance earlier this year proposed reinstating a 50 percent cut in registration fees for new cars made in Vietnam, however, it has now raised concerns that this may create legal problems. Specifically, the policy could be seen to be discriminating between locally made and imported vehicles which would put it in breach of EVFTA rules.
Car registration fee cuts have been popular in the past, particularly after COVID, to stimulate the local economy. It has been revealed, however, that last year the EU suggested by applying the cut to domestically made and assembled cars only, that this would violate terms in the EVFTA.
Car imports from Europe to Vietnam mostly came from France and Germany in the first half of this year and were worth a little shy of US$10 million collectively.
Import taxes on cars and motorcycles before the EVFTA came into force were between 32 percent and 70 percent. These will be progressively reduced to zero over the first seven to ten years of the agreement.
See also: Vietnam’s Automotive Industry: Foreign Investor’s Guide 2024