Decision No. 65/2000/QĐ-BCN On the issuance of regulations on registration to confirm conditions for applying import tax rates based on localization ratio for two-wheeled motorcycles

DECISION OF THE MINISTER OF INDUSTRY

Regarding the issuance of Regulations on registration to be confirmed for meeting the conditions for applying import tax rates based on localization ratios for two-wheeled motorbikes.

Implementing the opinions of the Prime Minister in Circulars: No. 237/CP-KTTH dated March 10, 2000, and No. 3300/VPCP-KTTH dated August 9, 2000, of the Government Office regarding the application of import tax policies for two-wheeled motorbikes based on localization ratios starting from January 1, 2001;

THE MINISTER OF INDUSTRY

Pursuant to Decree No. 74/CP dated November 1, 1995 of the Government on the functions, tasks, powers, and organizational structure of the Ministry of Industry;

Based on the Circular of the Ministry of Industry No. 01/1999/TT-BCN dated March 12, 1999, guiding the registration to confirm the conditions for applying import taxes based on localization ratios for mechanical-electrical-electronic products;

At the proposal of the Director of the Department of Technology Management and Product Quality,

These Regulations are hereby issued together with this Decision on registration to be confirmed for meeting the conditions for applying import taxes based on localization ratios for two-wheeled motorbikes.

DECISION:

Article 1.The Heads of the Ministry's Office, the Inspectorate, the Department Directors, Bureau Chiefs under the Ministry, and enterprises producing two-wheeled motorbikes shall be responsible for implementing this Decision./.

Article 2.THIS DECISION SHALL TAKE EFFECT 15 DAYS AFTER THE DATE OF SIGNATURE.

On registration to be confirmed for meeting the conditions for applying

REGULATIONS

(Issued together with Decision No. 65/2000/QĐ-BCN

Implementing the opinions of the Prime Minister in Circulars: No. 237/CP-KTTH dated March 10, 2000, and No. 3300/VPCP-KTTH dated August 9, 2000, of the Government Office regarding the application of import tax policies for two-wheeled motorbikes based on localization ratios starting from January 1, 2001;

dated November 13, 2000, of the Minister of Industry)

These Regulations apply to all enterprises producing two-wheeled motorbikes (hereinafter referred to as motorcycles) belonging to all economic sectors, established and operating under Vietnamese law.

Articlea) Cadres, civil servants, public officials, and workers as stipulated in Article 2 of Decree No. 178/2024/NĐ-CP dated December 31, 2024 (amended and supplemented by Decree No. 67/2025/NĐ-CP dated March 15, 2025) of the Government on policies and treatment for cadres, civil servants, public officials, workers, and armed forces personnel in the process of organizational restructuring of the political system, having a total mandatory social insurance contribution period of at least 15 years when working in heavy, hazardous, or dangerous jobs or extremely heavy, hazardous, or dangerous jobs listed by the agency under the Government responsible for labor administration, or working in areas with particularly difficult socio-economic conditions including time worked in places with regional allowances of coefficient 0.7 or higher before January 1, 2021, and reaching the retirement age as specified in Appendix II issued together with Decree No. 135/2020/NĐ-CP, ceasing work immediately due to direct impact from organizational restructuring and implementation of the two-level local government model;

2. Concept of Localization

ArticleIn these Regulations, localization (LZ) of motorcycles and motorcycle parts means domestic production to replace imports.

3. Registration Documentation for LZ Motorcycles

Article1. A letter requesting registration from the enterprise (Model 1, Circular No. 01/1999/TT-BCN dated March 12, 1999, of the Ministry of Industry);

2. A plan for LZ production (Model 3, Circular No. 01/1999/TT-BCN dated March 12, 1999, of the Ministry of Industry);

3. A list of motorcycle parts registered for LZ:

A list self-reported by the enterprise along with explanations of the calculated LZ ratio registration (Model 4, Circular No. 01/1999/TT-BCN dated March 12, 1999, of the Ministry of Industry);

A synchronized list of motorcycle parts provided by foreign manufacturers (the main source of imports);

A list accompanied by a notification from the Ministry of Science, Technology, and Environment confirming that the enterprise meets technical and technological conditions for assembling motorcycles in the form of IKD (if applicable);

Regarding the degree of fragmentation of the list of motorcycle parts and components carried over according to regulations on types of assembly and production of two-wheeled motorcycles by the Ministry of Science, Technology, and Environment (issued together with Decision No. 648/1999/QĐ-BKHCNMT dated April 17, 1999).

4. Copies of relevant documents related to legal protection rights for industrial property concerning motorcycles and engines including:

Confirmation from the National Office of Intellectual Property (Ministry of Science, Technology & Environment) that the enterprise does not infringe on industrial property rights for design and trademarks (for new trademark registrations);

Documents of agreements or contracts transferring the right to use trademarks from the trademark owner;

Contracts for technology transfer, trade secrets (if applicable).

5. Product Quality Confirmation

Copies of documents from the Vietnam Vehicle Inspection Center confirming the quality of motorcycles at the time of manufacture and the quality of major components: frame and engine (if included in the LZ list);

6. Enterprise documents announcing the system of retail outlets, service centers, and warranty provisions for sold vehicles;

7. Copies of relevant business registration permits;

8. Purchase-sale contracts (imports and domestic purchases).

The LZ registration dossier is prepared in three copies and submitted to the Ministry of Industry (through the Department of Technology Management and Product Quality).

From the second registration onwards, enterprises only need to submit documentation specified in points 3.1, 3.2, and 3.3, and additionally points 3.4 and 3.5 for newly registered models.

4. Calculating the LZ Ratio for Motorcycles

ArticleThe LZ ratio for motorcycles is determined using the following formula:

N (%) =

I

x 100%. ( 1 ) N (%) is the LZ ratio of a type of motorcycle;

Z

c) The Reorganization Enterprise Fund at the state-owned holding corporation level is centralized in a separate account of the state-owned holding corporation, managed by the Board of Directors, to support the reorganization and ownership conversion of enterprises under the state-owned holding corporation as stipulated in Article 2 of this Decision and is responsible for settling accounts with the Ministry

Z (USD) is the reference value of the motorcycle, including the value of imported parts and domestically produced parts (self-produced or purchased from other producers);

I (USD) is the value of semi-finished products, components, sub-assemblies, and parts directly imported by the enterprise (CIF price shown on invoices and documents).

In principle, both Z and I should come from the same primary supplier (provided by a foreign manufacturer). Ancillary items such as packaging, covers, bags, cushions, instruction manuals, etc., are not included in I or Z.

In actual production, if there is a need to change the supply source from the registered one, the enterprise may apply for supplementary registration for the Ministry of Industry to review and adjust. If the price of parts changes, the LZ ratio will be determined based on the initial allocation ratio (percentage of value relative to Z).

Direct imports and domestic exchanges must comply with current regulations through purchase-sale contracts and valid invoices and documents. For domestically produced parts, the LZ value is determined based on the production cost declared by the enterprise but not exceeding the general market price. The LZ value of parts purchased from domestic producers is determined by the purchase price on the invoice excluding VAT; parts purchased from importers are included in I.

5. Registration Level for LZ Ratio

ArticleEnterprises can register multiple times within a year for LZ motorcycles, with the condition that each subsequent registration must increase the LZ ratio by at least 4%.

Based on specific reviews and examinations, the Ministry of Industry will notify the enterprise in writing of its capacity for technological production and record the LZ ratio for motorcycles registered by the enterprise (Model 5, Circular No. 01/1999/TT-BCN dated March 12, 1999, of the Ministry of Industry).

6. LZ for Difficult Sub-Assemblies

ArticleEnterprises producing motorcycle engines must have the technological capability to manufacture them, transferred from abroad, and must not infringe on industrial property rights for trademarks and designs.

A motorcycle engine manufacturing enterprise must possess technological capacity for production, transferred from abroad, and not infringe upon industrial property rights concerning trademarks and industrial designs;

The engine and frame when installed on motorcycles shall be converted at a rate of domestic content (DC) corresponding to the value of domestically produced components. In cases where the DC ratio reaches 40% for engines and 50% for frames or more, incentives will be applied to tax rates similar to those for completely domestically manufactured products; specifically, engines may also be considered for preferential import tax reduction factors.

Article7. Product labeling

Motorcycles leaving the factory and circulating in the market must be labeled with the following mandatory information:

Typeof vehicle (name, code),

Manufacturer, assembler (name, address),

Basic specifications (vehicle weight, engine combustion chamber capacity),

Quality certification number from the Vietnam Vehicle Inspection Center,

Year of manufacture.

Article8. Reporting and inspection regime

Annually, enterprises must submit periodic reports to the Ministry of Industry (through the Department of Technology Management and Product Quality) regarding the implementation of domestic content production of motorcycles: a report six months before July 31 and a full-year report before January 31 of the following year.

Thecontent of the report includes: registered domestic content vehicle types, results of imports and domestic production (quantity, value, specific sources of supply), assembly volume and consumption, actual domestic content ratio achieved, average selling price, revenue, and budget contributions.

Enterprisesare legally responsible for the accuracy and reliability of the data in theirregistrations and reports; they are subject to supervision and inspection by theMinistry of Industry, as well as required to maintain records, submit finalreports, undergo audits, etc., in accordance with Circular Joint Circular No. 176/1998/TTLT-BTC-BCN-TCHQ dated December 25, 1998 issued by the Ministry of Finance, the Ministry of Industry, and the General Customs Department.

Article9. Handling violations

TheMinistry of Industry will not consider applications for import tax rates based onthe domestic content ratio in the following cases:

1.Assembling vehicles that do not meet specified technical requirements; opening newassembly locations;

2.Infringing upon industrial property rights concerning trademarks and design patents;

3.Selling imported motorcycle parts; using components and spare parts not matching the registered origin./.