Low Tax Encourages the Use of Electric Cars

13:04, 11/07/2024

This is the prominent content stipulated in the Law on Amendments and Supplements to Certain Articles of the Law on Value-Added Tax, the Law on Special Consumption Tax, and the Law on Tax Administration issued by the National Assembly on April 6, 2016.

Special Consumption Tax is applied to electric automobiles with a reduction of up to 10% compared to the previous regulation. To be specific:

- Type for transporting up to 9 people: tax rate 15%, reduced by 10%- Type for transporting from 10 to under 16 people: tax rate 10%, reduced by 5%- Type for transporting from 16 to under 24 people: tax rate 5%, reduced by 5%- Type designed for both transporting people and goods: tax rate 10%, no reduction.

The Special Consumption Tax rate for electric automobiles is significantly lower than that for gasoline automobiles. This is a policy to encourage the consumption of environmentally friendly products and to avoid pollution.

Besides electric automobiles, automobiles running on bioenergy and those running on a combination of gasoline and electric, bioenergy, with gasoline usage not exceeding 70% of the total energy used, are also facilitated by the State through the application of lower taxes.

More details can be found in the Law amending and supplementing a number of articles of the Law on Value Added Tax, the Law on Special Consumption Tax, and the Law on Tax Administration, effective from July 1, 2016.

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