Decree 199/2025/ND-CP, effective July 8, amends conditions under the existing tax incentive program for imported auto parts. Automakers producing electric, hybrid, biofuel, or fuel-cell vehicles can now count those units toward the minimum production volume required for preferential tariffs, even if they primarily assemble gasoline or diesel vehicles.
According to the updated regulation, automakers that assemble traditional gasoline or diesel vehicles but also produce environmentally friendly models can include those green vehicles in their total production volume. This combined volume will be used to determine whether the company meets the minimum production requirements to receive tariff incentives on imported components for conventional vehicles.
The decree also allows companies holding at least a 35% equity stake in other certified automakers to aggregate production volumes across affiliated firms when applying for tax incentives. The parent company must take responsibility for accurately reporting the total output and ownership ratio during the evaluation period.
Vietnam’s customs authorities will reimburse import duties based on the actual production volume of vehicles rolled out by firms participating in the tax‑incentive program. However, companies that misreport production data will face tax penalties and retrospective collection of underpaid duties.
While incentivizing green vehicle production, the decree also raises export and import tariffs on several key commodities listed in Decree 26/2023/ND-CP.
Starting January 1, 2026, the export tariff on yellow phosphorus, a key raw material used in fertilizer, pesticides, semiconductors, and lithium batteries, will increase from 5% to 10%, and further to 15% by 2027. The Government said the move is intended to conserve natural resources, mitigate environmental impacts, and support the development of strategic industries such as semiconductors, EV battery production, and high-grade industrial chemicals.
In addition, the import tariff on tin-mill blackplate (TMBP), a type of steel used for tin coating, will remain at 0% until the end of August 2025. From September 1, it will rise to 7%.
Import duties on several polyethylene products have also been adjusted from 0% to 2%. These include polyethylene containing up to 5% alpha-olefin monomer, high-density polyethylene with a specific gravity of 0.94 or more, and ethylene-alpha-olefin copolymers with a specific gravity below 0.94.
The policy shifts reflect Vietnam’s dual focus on promoting sustainable mobility and securing long-term industrial competitiveness through strategic tariff reforms.
Thu Tra
