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Foreign diplomats evade tax on sale of used cars
Foreign diplomats in Vietnam, who are allowed to import vehicles tax-free, are increasingly selling their cars illegally when they leave the country at the end of their tenure.
If they do not re-export the vehicles, the diplomats are required to pay the applicable taxes and get them registered afresh before selling them in the country.
Their failure to do so is costing the government large sums of money in lost taxes. Normally, if a car costing $100,000 is imported, it will attract import tax of $83,000, special consumption tax of $91,500, and VAT of $27,450.
Statistics from the General Customs Department show that 1,158 diplomatic cars belonging to officials who have finished their tenure have yet to be registered for re-export or sale in Vietnam.
The city Customs Department said while some 200 diplomats who imported cars have left the country, their vehicles have yet to be registered for re-export or local sale.
A senior customs official, who wished to remain unnamed, said most diplomats import German or US cars costing several hundred thousand to a million dollars, adding the taxes on them will VND1 billion-2 billion ($51,400-102,800) on average.
A HCMC street view
Tuoi Tre tracked down some of the cars sold to locals by departing diplomats.
A Bentley, worth VND4.5 billion, is owned by a Nguyen Dinh Chinh Street resident. It was registered in 2009 for Soe Myat Myat, an attaché at the Myanmar embassy in Hanoi.
An S500 Mercedes belonging to Aung Kyaw Moe, another Myanmarese official, was registered three years ago. Though he sold it before returning home recently, it remains registered in his name.
A Mercedes S63AMG, previously owned by Okan K. Abdul Hameed of the Iraqi embassy but sold to a Vietnamese, remains registered in Hameed’s name though he has left the country.
Volavong Ourakone of the Laos embassy sold his Mercedes S550 last year to a person living on Tran Huy Lieu Street in Phu Nhuan District, but without doing the official sale procedures.
Tuoi Tre also discovered that Kimhean Yeav, a commercial counselor at the Cambodian embassy who has returned home, sold his Infiniti illegally.
To resolve the problem, the Customs Department has suggested that when foreign diplomats end their terms in Vietnam, the police and local registry will revoke their car number plates and registration.
The Ministry of Finance, on the other hand, wants all the taxes that were exempt originally automatically levied once a diplomat completes his or her tenure.
The ministry has also drafted a circular requiring buyers of second-hand diplomatic cars to possess sale and registration papers. Unregistered cars will be seized.
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