The automobile support industry tax incentive program has been extended until the end of 2027, which will help create new momentum for the Vietnamese automobile industry.
Creating new momentum for Vietnam's auto industry
On February 10, 2025, the Government issued Decree No. 21/2025/ND-CP amending and supplementing Article 9 of Decree No. 26/2023/ND-CP on Export Tariff Schedule, Preferential Import Tariff Schedule, List of goods and absolute tax rates, mixed tax, and import tax outside tariff quotas.
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| The localization rate of many automobile enterprises recorded positive results. Photo: VF |
Decree 21/2025/ND-CP amends the name of Article 9 and Clause 1, Article 9 of Decree No. 26/2023/ND-CP on Export Tariff Schedule, Preferential Import Tariff Schedule, List of goods and absolute tax rates, mixed tax, and import tax outside tariff quotas as follows:
"Article 9. Preferential import tax rates for raw materials, supplies, and components for the production, processing (assembly) of priority supporting industrial products for the automobile manufacturing and assembly industry until December 31, 2027 (referred to as the Automobile Supporting Industry Tax Incentive Program).
Regulations on preferential import tax rate of 0% for raw materials, supplies and components that cannot be produced domestically for the production, processing (assembly) of priority support products for the development of the automobile manufacturing and assembly industry (referred to as automobile support industry products) until December 31, 2027 (stipulated in Decree 26/2023/ND-CP until December 31, 2024) as follows: At the time of customs declaration registration, the customs declarant shall declare and calculate tax on imported raw materials, supplies and components according to the normal import tax rate or preferential import tax rate or special preferential import tax rate as prescribed, not yet applying the 0% tax rate.
The application of a preferential import tax rate of 0% for raw materials, supplies and components of the Automobile Support Industry Tax Incentive Program shall be implemented in accordance with the provisions of Clauses 2, 3, 4, 5, 6, 7 and 8 of this Article.
Decree 21/2025/ND-CP takes effect from the date of signing (February 10, 2025).
Preferential import tax rates for raw materials, supplies, and components for the production, processing (assembly) of priority supporting industrial products for the development of the automobile manufacturing and assembly industry prescribed in this Decree shall be applied until December 31, 2027.
Enterprises that have registered to participate in the Automobile Support Industry Tax Incentive Program prescribed before the effective date of this Decree do not have to re-register for the Automobile Support Industry Tax Incentive Program and are entitled to incentives according to the provisions of this Decree.
Helping businesses confidently expand their scale
Previously, the Ministry of Industry and Trade, the Vietnam Mechanical Association (VAMI), and the Vietnam Automobile Manufacturers Association (VAMA) proposed that the Government extend the automobile supporting industry tax incentive program until December 31, 2027, equivalent to the duration of other tax incentive programs in the automobile manufacturing and assembly sector.
Since the issuance of the Automobile Supporting Industry Tax Incentive Program, according to the assessment of the Vietnam Mechanical Association (VAMI), member enterprises have recorded certain effectiveness through the application of a preferential import tax rate of 0% for raw materials, supplies, and components for manufacturing and assembling supporting industry products.
According to the Ministry of Industry and Trade, in recent years, the automobile support industry in Vietnam has made significant progress. Many automobile manufacturing enterprises are expanding their scale, not only meeting domestic market demand but also increasing export output thanks to tax incentives in general and the Automobile Support Industry Tax Incentive Program in particular.
Specifically, in 2023, Vietnam exported 3.09 billion USD worth of auto parts and components, with the main markets being Japan and the United States. Of which, the group of electrical wire components accounted for a large proportion, reaching about 1.17 billion USD, equivalent to 38% of the country's auto parts export value, ranking third in the world.
The highlight of the Program is the positive spread to supporting industries, including component manufacturing, warranty, maintenance and especially electric car development infrastructure - a field that is gradually asserting its position with typical names such as VinFast and TMT Company.
From 2020 to present, the Ministry of Industry and Trade has granted Certificates of Incentives to about 40 projects producing supporting industrial products for the automobile manufacturing and assembly industry.
As of May 31, 2024, enterprises participating in the Automobile Supporting Industry Tax Incentive Program have produced more than 3.3 million products, with a total tax refund of up to VND 116.8 billion. On average, the tax refund is about VND 39 billion per year.
Preferential tax policies for automobile supporting industries have become an important lever, helping businesses confidently expand their scale, improve equipment, and gradually participate deeply in the global value chain of the automobile industry.
| According to the Ministry of Finance's assessment, extending the Automobile Supporting Industry Tax Incentive Program until December 31, 2027 not only ensures consistency in incentive policies but also creates opportunities for the Vietnamese automobile industry to move closer to the goal of modernization and deep integration into the global value chain. |
Source: https://congthuong.vn/tiep-them-dong-luc-cho-nganh-cong-nghiep-o-to-viet-nam-373475.html
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