On August 10, the Ministry of Science and Technology issued Circular 11/2022/TT-BKHCN on the annulment of legal documents promulgated by the Minister of Science and Technology on methods of determine the localization rate for cars. This Circular takes effect from October 1, 2022.

Specifically, Circular 11/2022/TT-BKHCN has abolished all three legal documents as follows:

First , Decision No. 28/2004/QD-BKHCN dated October 1st, 2004 of the Minister of Science and Technology on the method of determining the localization rate for automobiles.

Second , Decision No. 05/2005/QD-BKHCN dated 11/5/2005 of the Minister of Science and Technology on amending and supplementing Decision No. 28/2004/QD-BKHCN dated October 1st/ 2004 of the Minister of Science and Technology on the method of determining the localization rate for automobiles.

Third , Circular No. 05/2012/TT-BKHCN dated March 12, 2012 of the Minister of Science and Technology amending and supplementing Article 1 of Decision No. 05/2005/QD-BKHCN dated 11/ May 2005 of the Minister of Science and Technology amending and supplementing the Decision No. 28/2004/QD-BKHCN dated October 1, 2004 on the method of determining the localization rate for automobiles.

Thus, after nearly 20 years, the regulations related to the localization rate and the degree of fragmentation of imported auto parts issued by this Ministry are officially abolished. Because the above regulations are no longer consistent with the development practice of automobile manufacturing technology.

Previously, in order to implement the “Strategy to develop Vietnam ‘s automobile industry to 2010, with a vision to 2020” of the Prime Minister, the Ministry of Science and Technology issued regulations on the discrete level of components. imported cars.

The purpose of this regulation is to serve the method of determining the localization rate for cars (calculating points according to the discrete level).

According to experts, the abolition of these regulations is said to be in line with the development and change of technological processes of automobile production and assembly of automobile manufacturing and assembling enterprises in Vietnam and in the world today to ensure transparency and reasonableness; does not cause administrative procedures, convenient for state management in the fields of investment and science and technology. At the same time, to ensure the treaties and free trade agreements between Vietnam and other countries.

Specifically, the abolition of the above regulations is not only to ensure the consistency of the legal document system but also to meet practical needs, in line with common regional and international standards.

Currently, the documents regulating the method of determining the localization rate for cars are no longer suitable with the development reality of the automobile industry, because Vietnam still uses the method of calculating the localization rate. localization according to clusters of locally produced parts, while ASEAN countries calculate according to the total value of each part combined, to enjoy tax incentives under the ASEAN Trade in Goods Agreement (ATIGA).

Moreover, the signing of trade agreements that Vietnam has joined such as ATIGA, CPTPP, EVFTA … is an opportunity for the difference in import tax rates for complete vehicles and parts sets to disappear. Therefore, in the issued decrees and circulars, the Government needs to request the relevant ministries and branches to amend and supplement regulations on the degree of fragmentation, ensuring it is consistent with reality.

Source Bo Cong thuong