Per the Ministry of Finance, in Clause 2, Article 6 of Decree No. 140/2016/ND-CP (amended and supplemented in Clause 1, Article 1 of Decree No. 20/2019/ND-CP) on the price calculation of registration fee for assets that are firearms for hunting, training and sporting; water-borne vehicles, ships; body, chassis and engine of the above property and automobiles, two-wheel motorcycles; trailers or semi-trailers pulled by automobiles are regulated that the actual market-based transfer price shall be founded on a valid sale invoice, quotation of the genuine manufacturer, selling price of the same or similar type of property, dutiable value of a property imported per the legislation on customs, notice of an authorised importer on behalf of a foreign automobile manufacturer, the price uploaded on registration fees management application of tax authorities.
However, during implementation, the Ministry of Finance recognised some problems had arisen. For example, in the case of assets of organisations and individuals that buy raw materials and then hire another unit to process into assets subject to registration fees such as water-borne, ships, etc., then handing those assets back to organisations and individuals for exploitation and use.
"This outsourcing property has firstly appeared on the market and there were no assets that are the same type or equivalent on the market, so there is no basis to determine the price for calculating registration fees. Based on the actual situation, the Ministry of Finance issued Official Letter No. 1520/TCT-CS dated May 14, 2021 guiding local governments to follow the direction based on product costs including value-added tax, special consumption tax (if any) to determine the calculation of registration fee for this case," the Ministry of Finance said.
Along with that, the regulation based on the price on the tax authority's application leads to the problem that the price can only be applied per the application of the local tax office. Meanwhile, the price calculation of registration fees in the case of new cars and motorbikes has arisen in a locality but it has not been included in the registration fee calculation list yet is also a basis for other localities to determine the price for calculating registration fees promptly and quickly for the case of new cars and motorbikes in their locality.
The Ministry of Finance believed that it was necessary to amend and supplement regulations on the database to determine the transfer price of assets on the market in some cases.
Preventing loss of State revenue from registration fee
To solve the above problems, in the draft decree amending Decree No. 140/ND-CP on registration fee calculation prices, the Ministry of Finance proposed amending the provisions of Clause 2, Article 6 of Decree No. 140. /2016/ND-CP (amended and supplemented in Clause 1, Article 1 of Decree No. 20/2019/ND-CP) on the database for determining asset transfer prices on the market for some cases. Accordingly, adding "product cost, including value-added tax, special consumption tax (if any)" as a basis for determining the transfer price of assets in the market in the case that property is self-produced, self-manufactured or outsourced without the same type of assets or equivalent on the market.
Simultaneously, amending and supplementing the database of determining the market transfer price of assets for imported assets as follows: “Notice of the authorised importer on behalf of foreign manufacturers” to cover the types of imported asset. The Ministry of Finance also supplements the data as "prices on the registration fees management application of the tax authorities of the provinces and centrally-run cities" to facilitate determination of the registration fee calculation for new automobiles and two-wheel motorbikes at the time of making registration fee declaration but it was not included in the price list for registration fee calculation.
According to the Ministry of Finance, the change of the above regulations would solve the limit ations of the registration fees policy and facilitate taxpayers in declaring and paying registration fees in a timely and fast manner, without affecting the production and business of the firm.
At the same time, contributing to transparent and clear reform of administrative procedures when implementing Resolution No. 19/NQ-CP on the key tasks and solutions to continue to improve the business environment and enhance national competitiveness.
The proposed regulations will also facilitate the determination of registration fees calculation and the adjustment of registration fee calculation list in a fast and accurate manner, appropriate with the characteristics of each type of asset, preventing loss of State revenue.
If the current regulations continue to be maintained, it would not remove the shortcomings and obstacles when determining the price for calculating registration fees, creating a risk for the tax authority because it is difficult to determine the tax rate in the above cases due to a lack of legal basis for determining registration fee calculation, causing loss of State revenue.
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