In two draft proposals currently open for consultation, the Ministry of Finance has suggested extending preferential special consumption tax and registration fee policies for battery electric vehicles (EVs) through to the end of 2030 in Vietnam.

0% registration fee incentive for EVs until 2030

According to the Ministry of Finance, to reduce environmental pollution from vehicle emissions, encourage investment in manufacturing, address supply conditions, and support consumer demand for battery electric cars, the Government issued Decree No. 10/2022/ND-CP. This introduced registration fee incentives as follows: for the first three years from March 1st, 2022, the initial registration fee was set at 0%; for the following two years, the initial registration fee was set at 50% of that applied to petrol and diesel cars with the same seating capacity.

To continue EV-related policy measures, on March 1st, 2025, the Government issued Decree No. 51/2025/ND-CP, amending Decree No. 10/2022/ND-CP and extending the 0% initial registration fee until the end of February 2027.

These policies aim to increase access to electric transport, address environmental concerns, and reduce reliance on fossil fuels, particularly amid volatile fuel prices both domestically and globally. Lower special consumption tax and registration fees also reduce costs for users.

Maintaining a 0% registration fee for battery electric cars is also expected to contribute to market activity, support the EV industry and related sectors, and affect employment and income levels, with broader economic implications.

Based on practical considerations and impact assessments, and in line with Government Resolution No. 93/NQ-CP dated April 6th, 2026, the Ministry of Finance has proposed extending the 0% registration fee for the first-time registration of battery electric cars from March 1st, 2027 to the end of 2030.

Proposal to extend preferential special consumption tax rates

The Ministry of Finance noted that the National Assembly has introduced policies to support environmentally oriented transport and reduce pollution. Law No. 03/2022/QH15 amended multiple laws, including the Law on Special Consumption Tax, and established preferential tax rates for battery electric cars as follows: from March 1st, 2022, rates of 3%, 2%, and 1%; from March 1st, 2027, rates of 11%, 7%, and 4%, depending on seating capacity.

Current preferential tax rates for EVs (1%-3%) are lower than those for fossil fuel vehicles (10%-150%), contributing to lower vehicle prices. Increased sales volumes have also led businesses to expand production.

Since implementation in 2022, the shift to electric vehicles has been associated with changes in emission levels. Continued incentives are considered necessary in the context of Vietnam's commitments at COP26 and broader policy direction on sustainability.

In this context, extending preferential special consumption tax rates until the end of 2030 would maintain alignment with environmental and energy-related policy objectives, including reduced urban pollution and lower dependence on fossil fuels amid volatile global energy markets.

The draft proposes extending preferential tax rates for battery-powered vehicles with fewer than 24 seats as follows:

Vehicles with up to 9 seats (including passenger cars and passenger pick-ups): 3% until December 31st, 2030; 11% from January 1st, 2031.
Vehicles with 10 to under 16 seats: 2% until December 31st, 2030; 7% from January 1st, 2031.
Vehicles with 16 to under 24 seats: 1% until December 31st, 2030; 4% from January 1st, 2031.
Double-cab pick-up trucks and VAN trucks with two or more seat rows and a fixed partition between passenger and cargo compartments: 2% until December 31st, 2030; 7% from January 1st, 2031.

Overall, the development of battery electric vehicles is identified as a factor in reducing greenhouse gas emissions, urban pollution, and the use of fossil fuel-powered transport, in line with Vietnam's international commitments.