Important Update on Tax Policies Supporting the Automotive Industry!
Posted on: 20/02/2025
Important Update: Decree 21/2025/NĐ-CP Amending Article 9 of Decree 26/2023/NĐ-CP – Extension of the Automotive Support Industry Tax Incentive Program Until December 31, 2027
The Government has recently issued Decree 21/2025/NĐ-CP, amending and supplementing Article 9 of Decree 26/2023/NĐ-CP on Export and Preferential Import Tariff Schedules, introducing significant changes to tax policies related to the automotive industry. Notably, the Automotive Support Industry Tax Incentive Program has been extended until December 31, 2027, providing additional time for businesses in the automotive sector to develop and enhance their production and processing capabilities.
📝 Key Updates from Decree 21/2025/NĐ-CP:
Extension of the Automotive Support Industry Tax Incentive Program Until December 31, 2027:
The government has extended this program, allowing automotive industry enterprises to continue benefiting from preferential tax rates. This initiative particularly supports the importation of raw materials, supplies, and components that are not yet domestically produced for manufacturing and assembly purposes.
0% Preferential Tax Rate:
The 0% preferential tax rate for raw materials, supplies, and components used in automobile production will remain effective until December 31, 2027. This presents a major opportunity for businesses in the automotive industry to lower production costs and enhance market competitiveness.
No Re-registration Required for Enterprises Registered Before February 10, 2025:
Enterprises that registered for the Automotive Support Industry Tax Incentive Program before February 10, 2025, do not need to reapply and will continue to benefit from these incentives until December 31, 2027.
🎯 Why Is This Tax Incentive Program Important for Businesses?
This program plays a crucial role in supporting automotive manufacturers and processors by enabling them to import essential components and materials that are not available domestically. With the 0% preferential tax rate, businesses can reduce input costs, allowing them to reinvest in R&D, production expansion, and the development of new automotive models, leading to sustainable growth and improved market competitiveness.
💡 Key Benefits for Automotive Enterprises:
Lower Production Costs: Imported components used in automobile production benefit from a 0% tax rate, reducing tax burdens and optimizing production expenses.
Long-term Development Opportunities: The extension until 2027 gives businesses more time and resources to expand production and assembly operations.
Enhanced Competitive Edge: Companies can leverage these incentives to gain a competitive advantage in the automotive industry, as reduced import tax costs lead to more competitive pricing.