The volume of cars imported under a non-commercial regime (donation and gift) soared in the first half of 2021. Through customs valuation, HCM City Customs Department collected more than VND500 billions of tax revenue from this item, the department said.

Luxury cars are imported across VICT Port in HCM City. Photo: Thu Hoa.

Increasing some VND billions in tax revenue for each car

According to the department, from January 1 to the end of May, HCM City Customs Department granted import permits for 48 cars. Meanwhile, only 42 cars were granted permits in 2020.

Cars imported under the donation regime in this period mainly were nine-seat car or less and some used trucks. Most of those were luxury car brands such as Toyota Sienna, Lexus, Mercedes, Bentley and Range Rover.

According to the 1st Zone Sai Gon Seaport Customs Branch, these cars are mainly imported via Cat Lai port and implemented under-value declaration by goods owners. Customs can determine dutiable values due to these items are not eligible to apply transaction value. Therefore, the branches collected more than 500 billion of tax revenue for these cars in the first half of the year.

Typically, Mercedes Benz cars include many different models, such as: GLS450, G63, GLS600. Their prices declared by firms only were only from US$20,000-30,000/ car. The branch inspected and determined to rise from US$70,000 to 135,000 per car depending on the model.

Similarly, Lexus car include many different models, such as: LX570, LX500, RX350. But businesses declared only US$15,000-30,000 per car. Customs assessed the prices of these cars from US$50,000 to over 87,000 per car.

Range Rover has many different models (Lr400, SV Autobiography). The luxury cars were declared only US$20,000 - 40,000 USD per car. Customs set the price from US$114,000 to 130,000 per car.

With the increased prices of these cars, the branch increased in revenue for the State budget from VND2 billion to 7 billion per car, depending on the model and capacity of each car, 1st Zone Sai Gon Seaport Customs Branch.

Conducting post clearance audit for suspicious cases

The peculiarity of imports under the gift and donation regime is the consignee cannot know the actual value of the goods without commercial invoices or commercial contracts.

The declared value of the initial declarant is often different from the price assessed by customs. The false declaration has led to a lack of payable tax amounts as specified in Article 9 of Government Decree 128/2020 dated October 19, 2020 on penalties for administrative violations in customs area.

Following the direction of the General Department of Customs (GDVC) in Official Letter 3137 dated June 23, HCM City Customs Department requested organisations and individuals applying for import permits to present additional documents to prove the relationship and cooperation between the two parties. The department has reported to the GDVC for guidance on uniform implementation.

The department has also conducted post clearance audits for suspicious importers. However, it has not yet detected any violations.

HCM City Customs Department also notified local tax authorities to collect taxes if importers resell these cars to other to prevent revenue loss.

On June 23, the GDVC issued Official Letter 3137/TCHQ-GSQL directing local customs departments to strengthen imports of cars under the donation and gift regime. Customs requested importers declare in detail information about the vehicle in the application as per Point a, Clause 1, Article 4 of Circular 143/2015 of the Ministry of Finance. If importers do not comply with regulations, Customs will not accept the applications for import permits.

If there are suspicious signs about the relationship between the donor and the recipient, the recipient must provide documents proving the relationship, such as: if there is a business relationship, there must be documents of trading in goods, documents for goods payment; if the two parties has relationship on working consultation and support, there must have documents to prove like sale contract or email.

If all documents are eligible, Customs will issue the permit. Customs will not accept inappropriate documents.

The GDVC also directs if the documents show suspicious signs, local customs must report to the GDVC for investigation. After issuing the import permit, all documents must be copied and sent to tax units for customs valuation.