Circular No. 71/2010/TT-BTC dated May 7, 2010 of the Ministry of Finance guiding tax assessment for automobile and motorbike traders that write the prices of automobiles and motorbikes on invoices iss
Article 1. Subjects of application
Automobile or motorbike traders that write the prices of automobiles or motorbikes on invoices issued to consumers lower than normal market prices will be subject to assessment of selling prices based on normal market prices and of payable tax amounts.
Article 2. Interpretation of terms
1. Automobile and motorbike traders include organizations and individuals trading in automobiles or motorbikes and establishments manufacturing or assembling automobiles or motorbikes for sale.
2. Normal market price means the actual selling price in the market under normal conditions.
For domestically manufactured or assembled automobiles and motorbikes, selling prices announced by manufacturers will be considered normal market prices.
3. Automobile and motorbike consumers are organizations and individuals that buy automobiles or motorbikes and pay registration fee upon making registration of the rights to use or own automobiles or motorbikes. Business organizations and individuals (with business registration certificates and tax identification numbers) that buy automobiles or motorbikes for business purposes (for sale) will not be considered automobile and motorbike consumers.
Article 3. Cases of non-application
1. Automobile or motorbike traders that post up selling prices in accordance with normal market prices and sell automobiles or motorbikes at these prices or prices of 5 per cent lower. In this case, taxes will be calculated based on posted prices (posted prices must be notified to managing tax offices). Establishments which post up selling prices of automobiles or motorbikes but fail to comply with the above regulation will be subject to assessment of selling prices based on normal market prices and of payable tax amounts.
2. Domestic automobile or motorbike manufacturers and assemblers that sell their products at prices applicable nationwide and in each region or locality. In this case, value-added tax (VAT) and enterprise income tax (EIT) will be calculated based on prices applied by the manufacturers or assemblers at the time of calculation. Selling prices set by manufacturers must be publicly announced and notified to managing tax offices. Automobile or motorbike traders that write selling prices on invoices lower than the prices announced and notified to managing tax offices will be subject to tax assessment based on their notified prices. 3. Sale agents that sell goods at prices set by their principals and only enjoy commissions under the law on VAT.
4. Business establishments that buy used automobiles and motorbikes with registration certificates issued by competent state management agencies for sale or receive them for consignment sale.
Article 4. Determination of normal market prices for use as a ground for assessment of selling prices and payable tax amounts
1. Principles of determining normal market prices
Normal market prices will be determined based on the database collected by tax offices on selling prices declared by business establishments with tax offices; price information provided by other state management agencies (customs offices, price appraisal centers under provincial-level Finance Departments and Industry and Trade Departments) and the Vietnam Automobile Manufacturers’ Association (VAMA); buying and selling prices of automobiles and motorbikes of the same categories in the same localities or other localities; information collected from consumers; and prices of automobiles or motorbikes published on the mass media such as newspapers, magazines, market bulletins or websites.
2. Normal market prices will serve as a ground for the assessment of selling prices and payable tax amounts.
Normal market prices will be determined based on tables of minimum prices of automobiles and motorbikes used for registration fee calculation which are promulgated by provincial-level People’s Committees according to law.
Provincial-level People’s Committees shall promulgate tables of minimum prices of automobiles and motorbikes used for registration fee calculation according to law for use as a ground for the calculation of registration fee for automobiles and motorbikes as well as the assessment of selling prices and payable tax amounts for automobile and motorbike traders specified in Article 1 of this Circular.
Article 5. Declaration of quantities of automobiles and motorbikes sold every month
Automobile and motorbike traders shall send to tax offices a statement of the quantity of sold automobiles and motorbikes (made according to the form enclosed with this Circular - not printed herein), together with their monthly VAT returns.
Article 6. Assessment of selling prices and payable VAT amounts The payable VAT amount shall be assessed based on the assessed selling price; the quantity of automobiles or motorbikes sold at prices lower than normal market prices stated in Article 4 of this Circular (referred to as quantity of violating vehicles); the added value percentage and the VAT rate.
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