A. Registration as a Motor Vehicle Importer and/or Distributor back a. When to Apply back 1. Under the Motor Vehicles (First Registration Tax) Ordinance, Cap. 330 (the Ordinance), a person who carries on business of importing motor vehicles for use in Hong Kong either on his own behalf or for a distributor for sale shall within 30 days of commencing that business register as an importer. In addition, a person who carries on business of distributing or retailing motor vehicles for use in Hong Kong either on his own behalf or to another distributor shall within 30 days of commencing that business register as a distributor. Case Study on Registration: For example, Company A imports a motor vehicle for use in Hong Kong for Company B; Company B distributes the motor vehicle to Company C; Company C sells the motor vehicle to buyers Company A should register as a registered importer and distributor Company B should register as a registered distributor Company C should register as a registered distributor 2. It is an offence under the Ordinance for any person who being an importer and/or distributor of motor vehicles, fails to register as a registered importer and/or distributor as required under section 3A(1) with the Customs and Excise Department (C&ED) within 30 days of commencing that business. The offender is liable to a fine of $500,000 and imprisonment for 12 months. 3. The definition of "motor vehicle" in the Ordinance includes vehicle chassis. Hence, an importer or a distributor of vehicle chassis for use in Hong Kong is subject to the same registration requirement. 4. Registration is not applicable to the situations below: A motor vehicle or chassis is not imported for use in Hong Kong (e.g. re-export, scrapping, etc.); or A motor vehicle or chassis is imported for personal use, rather than for sale or distribution. b. Application Procedures and Criteria back 5. The applicant should complete the "Application Form for Registration as Motor Vehicle Importer/Distributor" (CED 335) and submit it in person to the Customer Service Centre (CSC) of Motor Vehicles Valuation Group (MVVG) of the Customs and Excise Department (C&ED) or by post to the MVVG of C&ED. The applicant can also apply via the "Motor Vehicles First Registration Tax System (FRT System)". To qualify for the application, the applicant should hold the position of a proprietor or director of a company, otherwise, a written authorization from the director or board of directors of the company is required. 6. For a limited company, a copy of the Certificate of Incorporation and document regarding the registration of directors under the Companies Ordinance, Cap. 622 should be attached. For an unlimited company, documents regarding the registration of company should be attached. In addition, copies of the Business Registration Certificate, Hong Kong Identity Card or passport of the applicant (showing the photo and personal particulars) are also required. 7. For the purpose of verification, the applicant is required to present the original copies of supporting documents to Customs officers when submitting the application. For application submitted via the "FRT System", Customs officers will make appointment with the applicant for checking the original copies of supporting documents at the CSC. 8. For clarifying and verifying details of the submitted application, the applicant may be invited to attend an interview with Customs officers at Customs office. Customs officers may also pay a visit to the applicant's company. 9. For the convenience of accessing the "FRT System" for future applications of "Import Return" and Retail Price List Intended for Publication, etc., the submission of e-Certificate (Organisational) details of the applicant is required. 10. It is the responsibility of registered importers/distributors to understand and comply with the Ordinance. c. Change of Registration Particulars back 11. For any changes on registered information (including registered person, company name, business address, address(es) for location(s) of keeping business records and/or vehicles or chassis, usual brands and e-Certificate details etc.) or ceasing of carrying business, the registered importers and/or distributors shall give notice to C&ED within 14 days of the change or cessation of business. The same form CED335 should be used for application of changes on registration particulars. d. Registration Fee back 12. After processing an application, C&ED will issue a Demand Note to the applicant for payment of registration fee. After the payment, the applicant should show the payment receipt to the MVVG of C&ED for the issue of a Record of Registration. The date of registration will be the date on which registration fee is paid. The registration is not transferable and the registration fee is not refundable. The scale of fee is set out as below: Registration as a registered importer - $720 Registration as a registered distributor - $720 Registration as a registered importer and distributor - $720 e. Channels for Applications and Enquiries back 13. The applicant should submit the application for registration as Motor Vehicle Importer/Distributor via the "FRT System". Alternatively, the applicant may click here to download the Application Form or collect at the CSC of MVVG of C&ED, Hong Kong Licensing Office of Transport Department and all District Offices of Home Affairs Department. The completed form should be returned to C&ED in person or by mail to: Motor Vehicles Valuation Group, Customs and Excise Department, 3/F., Customs Headquarters Building, 222 Java Road, North Point, Hong Kong. Enquiries 14. For enquiries, please contact the MVVG of C&ED during office hours (tel.: 3759 2556 or fax.:2598 4975). Report suspected contravention of the Ordinance 15. Any information on activity of FRT evasion can be reported, as below: Report Hotline (24-hour): 2545 6182 Fax: 2543 4942 Post: Hong Kong General Post Box 1166 B. Filing of Import Return by Motor Vehicle Importer back a. Submission Deadline back 1. Under the Ordinance, an importer of a motor vehicle for use in Hong Kong shall file an "Import Return" within 30 days of the importation of the motor vehicle, and not less than 5 working days before delivering that motor vehicle. An Importer who fails to submit an Import Return within 30 days of importation of his vehicle is liable to a fine of $500,000 and imprisonment for 12 months. 2. This requirement does not apply to the import of motor vehicles which are not for use in Hong Kong (e.g. re-export, scrapping etc.). b. Documents Required back 3. An importer of a motor vehicle shall file an "Import Return" (CED336) with the supporting documents as below: Manufacturers' and dealers' invoice/payment receipt, Insurance certificate/receipt/invoice (if available), Shipping documents (i) Bill of Lading/Air Waybill/Hong Kong Import Manifest; (ii) Arrival Notice/Shipment Release form; (iii) Packing List (if available), and (iv) Freight Invoice (if available), Registration documents before importation into Hong Kong/exporting documents/de-registration documents (if available), and Other related documents (Certificate of Conformity, Completion Inspection Certificate, etc.) (if available). c. Accurate Information back 4. An importer must ensure the accuracy of the details declared in the "Import Return", including the vehicle model and landed value etc., and is obliged to verify the relevant details after the arrival of the motor vehicle. If the information of an "Import Return" filed by an importer are found to be false or inaccurate, the importer is liable to a fine of $500,000 and imprisonment for 12 months. 5. Landed value means the total cost of the motor vehicle, including the cost of purchase, freight, insurance and other cost incidental to the purchase and importation of the motor vehicle. The cost element shall be the highest of the following values : The cost of purchase by the importer; The cost of purchase by an associated person within the 6 months prior to the importation of the motor vehicle; or The cost, calculated as the motor vehicle leaves the factory, to the importer who is the manufacturer of the motor vehicle or an associated person. d. Provision of Supporting Documents back 6. When processing the application, C&ED may request the importer to provide corresponding supporting documents if necessary. After processing the application, C&ED will issue an "Allocation of C&E Reference" specifying the Reference No. assigned to each motor vehicle declared in the "Import Return" for the importer and/or registered distributor to apply for "Notification of Motor Vehicle Provisional Value" of the motor vehicle at a later date. e. ID Transfer back 7. If a registered importer and/or distributor imports a motor vehicle and then distributes it to another registered distributor, both parties should submit ID transfer application to C&ED, i.e. the transfer of the "Allocation of C&E Reference" from the registered importer and/or distributor to other registered distributor. For example, when registered importer/distributor A transfers a motor vehicle to registered distributor B, registered importer/distributor A should first submit the application and cancel the approved "published retail price (PRP) list" (if any) at the same time. The application should be enclosed with the documents as below: Declaration from Seller Invoice/Sales Contract between Seller and Buyer Upon the approval by C&ED, the application will be transferred to registered distributor B, who has to complete the remaining application by enclosing the documents as below: Declaration from Buyer Approved "PRP list" submitted by registered distributor B f. Vehicle Inspection back 8. C&ED may conduct inspection on a motor vehicle to check against the details declared on an "Import Return" when necessary. Upon receiving a vehicle inspection notification, the importer concerned should provide further information and collaborate in arranging vehicle inspection as soon as possible, so as to avoid delaying the application processing. g. Channels for Applications and Enquiries back 9. The importer should submit "Import Returns" or the relevant applications via the "FRT System". Alternatively, the applicant may click here to download the Application Form or collect at the CSC of MVVG of C&ED, Hong Kong Licensing Office of Transport Department and all District Offices of Home Affairs Department. The completed form should be returned to C&ED in person or by mail to: Motor Vehicles Valuation Group, Customs and Excise Department, 3/F., Customs Headquarters Building, 222 Java Road, North Point, Hong Kong. Enquiries 10. For enquiries, please contact the MVVG of C&ED during office hours (tel.: 3759 2556 or fax.:2598 4975). Report suspected contravention of the Ordinance 11. Any information on activity of FRT evasion can be reported, as below: Report Hotline (24-hour): 2545 6182 Fax: 2543 4942 Post: Hong Kong General Post Box 1166 C. Submission of Retail Price List Intended for Publication by Registered Motor Vehicle Distributor back a. Submission of Retail Price List Intended for Publication back 1. All motor vehicles which are for use in Hong Kong and have not been first registered in Hong Kong are subject to the First Registration Tax (FRT). The FRT of a motor vehicle is calculated on the basis of the taxable value of the motor vehicle and in accordance with the percentage for that vehicle class as specified in the schedule of the Ordinance. The taxable value of a motor vehicle is calculated on the basis of the "PRP" approved by C&ED. 2. In accordance with the Ordinance, a registered distributor is required to deliver the Retail Price List Intended for Publication of a motor vehicle to C&ED not less than 7 days before offering /distributing the motor vehicle for sale for use in Hong Kong, which consists of 4 sections: A1- The proposed retail price of the model of the motor vehicle including the manufacturer's warranty and any other warranty that is mandatory (but excluding the FRT payable) with a description of what is included in the proposed retail price, i.e. a standard motor vehicle; A2- The proposed retail price of optional treatments that are offered in addition to a standard motor vehicle (e.g. optional painting); B - The proposed retail price of optional accessories that are offered in addition to a standard motor vehicle (e.g. optional audio equipment); or, C - The proposed retail price of optional warranties in addition to a standard vehicle (e.g. optional warranty for 24 months). (Section A2, B and C are optional items) A registered distributor should provide information regarding the above sections to C&ED for assessment. Whenever possible, a registered distributor shall submit the optional items and prices in Section A2, B and C, in order to save the additional time for applying change of "PRP list" particulars. 3. The calculation of the FRT is based on the total amount of the A1 section plus A2, B and C sections as purchased by purchaser (if any). Current rate for private car is as shown below: Taxable Value Rate of Tax(%) the first $150,000 of taxable value 46 on the next $150,000 86 on the next $200,000 115 on the remainder 132 **The above first registration tax rate is only applicable to private car, which has been effective since 11:00 a.m. on 24 February 2021. Please check the latest tax rate for private cars or the tax rates applicable to other vehicle classes at the Transport Department website (https://www.td.gov.hk). 4. If C&ED is of the opinion that the proposed retail price of a motor vehicle does not reflect its market value in Hong Kong, C&ED may reject the proposed retail price and may assess a retail price that can reflect the market value of the motor vehicle in accordance with the Ordinance. 5. If the assessed price is not accepted by the registered distributor, upon receipt of the Approved Published Retail Price List / Notification of Motor Vehicle Provisional Taxable Value, the registered distributor may request for re-assessment with a written representation to the Customs with justifications. There is no limit to the number of applications for re-assessment. After considering the representation, the Customs will conduct re-assessment within 14 days. According to section 11 of the Motor Vehicles (First Registration Tax) Ordinance, any person who is aggrieved by any decision of the Customs made in respect of him under this Ordinance may, within 28 days from the date when he was informed of the decision, appeal to the Administrative Appeals Board. 6. As stipulated in the Ordinance, the "PRP" of a motor vehicle is assessed according to its market value. Market value means the price that the motor vehicle, its accessory or taxable warranty would fetch in the open market between a buyer and a seller independent of each other, dealing at arm's length. The open market is referring to the open market in Hong Kong. The market values of motor vehicles of same model may vary and were subjected to the accessories fitted and condition of a particular motor vehicle. 7. Before submitting Retail Price List Intended for Publication, a registered distributor has to check and ensure all particulars of the motor vehicle are accurate and complete, with both cost and profit be reflected in the proposed retail price. With C&ED's approval, the proposed retail price will become approved "PRP" showing on "PRP list". 8. A registered distributor commits an offence if he sells a motor vehicle at a price higher than the "PRP", without obtaining prior consent of C&ED. b. Change of Published Retail Price back 9. Considering that the market value of a motor vehicle may be adjusted in response to the changing market environment, the Ordinance allows registered distributor to notify C&ED not less than 5 working days before the intention to change the "PRP" of the motor vehicle. In case of a price reduction notification, reason for the reduction should be given for consideration. c. Publication of Retail Price back 10. In accordance with the Ordinance, a registered distributor shall, before offering/distributing a motor vehicle for sale for use in Hong Kong, publish in writing, as the C&ED requires, the approved "PRP list" of the motor vehicle. d. Vehicle Inspection back 11. C&ED may conduct inspection on motor vehicle to check against particulars declared on a submitted Retail Price List Intended for Publication. Upon receiving a vehicle inspection notification, the registered distributor concerned should provide further information and collaborate in arranging vehicle inspection as soon as possible, so as to avoid delaying the application processing. e. Illegal Practices back 12. Under the Ordinance, any person commits any of the following offences is liable to a fine of $500,000 and imprisonment for 12 months: As a registered distributor, fails to deliver the Retail Price List Intended for Publication to C&ED not less than 7 days before publication; As a registered distributor, fails to give not less than 5 working days' notice to C&ED of the intention to change the "PRP"; Without obtaining prior consent of C&ED, sells a motor vehicle at a price higher than the "PRP"; As a registered distributor, fails to publish in writing, as the C&ED requires, the approved "PRP list" of the motor vehicle before offering/distributing for sale for use in Hong Kong. f. Channels for Applications and Enquiries back 13. The registered distributor should submit Retail Price List Intended for Publication or the relevant applications via the "FRT System". Alternatively, the applicant may submit the relevant applications to C&ED in person at Motor Vehicles Valuation Group, Customs and Excise Department, 3/F., Customs Headquarters Building, 222 Java Road, North Point, Hong Kong.. Enquiries 14. For enquiries, please contact the MVVG of C&ED during office hours (tel.: 3759 2556 or fax.:2598 4975). Report suspected contravention of the Ordinance 15. Any information on activity of FRT evasion can be reported, as below: Report Hotline (24-hour): 2545 6182 Fax: 2543 4942 Post: Hong Kong General Post Box 1166 D. Best Practices for Selling a Motor Vehicle before First Registration back 1. A registered distributor shall take the initiative to show the corresponding approved "PRP list" of a motor vehicle being offered for sale, and introduce the particulars of the motor vehicle and its "PRP" (including Section A1, A2, B and C) to customers. 2. A registered distributor shall clearly state the particulars and price of a motor vehicle on the sale contract and confirm that they are consistent with the information on approved "PRP list" and the FRT payable. The details of the contract shall be clearly explained to the purchaser before signing the contract. 3. A registered distributor shall clearly explain the information filled in the application form "Application for Registration and Licensing of a Vehicle" (TD22) to the purchaser. Before asking the purchaser to sign on the TD22, a registered distributor shall ensure that the declared "Selling Price/Full Price Paid for the Purchase of the Vehicle" in TD22 is the same as that listed on the approved "PRP list" and the sale contract. 4. When the transaction completes, a registered distributor shall provide copies of the signed sale contract, the approved "PRP list" and the TD22 to the purchaser. 5. A registered distributor shall deliver the motor vehicle to the purchaser after the FRT is paid. 6. A registered distributor shall remind the purchaser that for any accessory fitted to the motor vehicle and/or taxable warranty obtained for the motor vehicle within 6 months after its first registration, the vehicle owner should submit a duly completed application form "Declaration of Fitting of Accessories to and/ or Obtaining of Taxable Warranties for a Registered Motor Vehicle within 6 months after First Registration" (TD469) to the Transport Department within 5 working days after the fitting of the accessory or entering into the contract for the taxable warranty.