Decree No. 108/2015/ND-CP dated October 28, 2015 guiding a number of articles of the Law on Special Consumption Tax

THE GOVERNMENT ——-	SOCIALIST REPUBLIC OF VIETNAM Independence – Freedom – Happiness —————
No. 108/2015/ND-CP	Hanoi, October 28, 2015

 

DECREE

GUIDELINES FOR SOME ARTICLE OF THE LAW ON EXCISE DUTY AND THE LAW ON AMENDMENTS TO THE LAW ON EXCISE DUTY

Pursuant to the Law on Government organization dated December 25, 2001 dated December 25, 2001;

Pursuant to the Law on excise duty dated November 14, 2008 and the Law on amendments to the Law on excise duty dated November 26, 2014;

Pursuant to the Law on Tax administration dated November 29, 2006 and the Law on the amendments to the law on tax administration dated November 20, 2012;

At the request of the Minister of Finance,

The Government promulgates a Decree to provide guidelines for some Article of the Law on excise duty and the Law on amendments to the Law on excise duty.

Chapter I

SCOPE AND REGULATED ENTITIES

Article 1. Scope

This Decree elaborates and provides guidelines for some Article of the Law on excise duty and the Law on amendments to the Law on excise duty.

Article 2. Taxable commodities and services

1. The commodities and services subject to excise tax (hereinafter referred to as taxable commodities) are specified in Article 2 of the Law on excise duty and Clause 1 Article 1 of the Law on amendments to the Law on excise duty.
2. a) Aircraft and cruise ships mentioned in Point e Clause 1 Article 2 of the Law on excise duty are those used for civil purposes.
3. b) Votive objects mentioned in Point k Clause 1 Article 2 of the Law on excise duty do not include child’s toys and teaching materials.
4. c) Betting business mentioned in Point d Clause 2 Article 2 of the Law on excise duty include sports betting, entertainment betting, and other forms of betting prescribed by law.
5. Goods subject to excise tax mentioned in Clause 1 Article 2 of the Law on excise duty are finished products, not including knock-down kits for assembly such products.

Article 3. Non-taxable commodities and services

The commodities and services not subject to excise tax (hereinafter referred to as non-taxable commodities and services) are specified in Article 3 of the Law on excise duty and Clause 2 Article 1 of the Law on amendments to the Law on excise duty.

1. Imported goods not subject to excise tax mentioned in Point a Clause 2 Article 3 of the Law on excise duty include:
2. a) Humanitarian aid, grant aid, including imported goods covered by grant aid approved by competent authorities, humanitarian aid and emergency aid serving recovery from wars, natural disasters, epidemics;
3. b) Gifts of overseas organizations and individuals for state agencies, political organizations, socio-political organizations, socio-political-professional organizations, social organizations, socio-professional organizations, the people’s armed forces;
4. c) Gifts for Vietnamese individuals within the limits.
5. Goods in transit, goods transported through Vietnam’s border or border checkpoint mentioned in Point b Clause 2 Article 3 of the Law on excise duty include:
6. a) Goods transported from the exporting country to the importing country through a Vietnam’s checkpoints without following procedures for importing into Vietnam and procedures for exporting from Vietnam;
7. b) Goods transported from the exporting country to the importing country through a Vietnam’s checkpoint and moved to a bonded warehouse without following procedures for importing into Vietnam and procedures for exporting from Vietnam;
8. c) Goods transited, transported through Vietnam’s border or border checkpoints  under an Agreement between Vietnam and another country, or between the agencies/representatives authorized by Vietnam’s government and another country’s government;
9. d) Goods transported from the exporting country to the importing country without going through any Vietnam’s checkpoint.
10. Aircraft, cruise ships for the transport of cargo, passengers, tourists, and aircraft serving national defense and security purposes.

Aircraft and cruise ships not serving the transport of cargo, passengers, tourists, or national defense and security purposes are subject to excise tax according to the Law on excise duty and instructions of the Ministry of Finance.

4. Motor vehicles mentioned in Clause 4 Article 3 of the Law on excise duty are vehicles designed by their manufacturers to be used as ambulances, prisoner transport vehicles, hearses, vehicles for both seated and standing passengers for at least 24 people; motor vehicles that are not registered, running within amusement parks or sport stadiums and not running on public roads, special-use vehicles, motor vehicles that are not registered and not used on public roads shall be specified by the Ministry of Finance in cooperation with relevant Ministries and agencies.
5. Air conditioners with cooling capacity of 90,000 BTU or lower installed on vehicles, including motor vehicles, carriages, ships, aircraft.
6. Goods imported goods into free trade zones, goods sold from inland to a free trade zone and used within the free trade zone, goods traded between free trade zones except: goods brought into free trade zones having residences and no hard fences, motor vehicles for the transport of fewer than 24 people.

Chapter II

TAX CALCULATION BASIS

Article 4. Taxable price

1. Taxable prices for imported goods (other than gasoline) sold by the importer and goods produced in Vietnam are calculated as follows:

Taxable price	=	Price exclusive of VAT	–	Environmental protection tax (if any)
		1 + Excise tax rate

Price exclusive of VAT is determined according to regulations of law on VAT.

1. a) If an importer of goods subject to excise tax (other than gasoline), manufacturer of goods subject to excise tax sells their goods via an affiliate that does not keep independent accounts, the taxable price is the selling price imposed by the affiliate.  The importer (other than gasoline importers) or manufacturer that sells goods via an agent that sells goods at fixed price to earn commissions, the taxable price is the price imposed by the importer or manufacturer inclusive of commission.
2. b) If the importer of goods subject to excise tax (other than vehicles that seat fewer than 24 people and gasoline), manufacturer of goods subject to excise tax (other than vehicles that seat fewer than 24 people) sells their goods to other resellers, the taxable price is the selling price for the importer or manufacturer, provided it is not lower than 7% of the average selling price imposed by the resellers.

In case the selling price imposed by the aforementioned importer or manufacturer is lower than 7% of the average selling price imposed by the resellers, the taxable price shall be imposed by the tax authority according to regulations on tax administration.

The resellers mentioned in this Point must not have a parent company-subsidiary company relationship with the importer or manufacturer, and are the first link of the distribution chain. The parent company-subsidiary company relationship shall be determined according to the Law on Enterprises.

1. c) In case an importer or manufacturer/assembler of vehicles that seat fewer than 24 people sell them to resellers:

For importer of vehicles that seat fewer than 24 people, the taxable price is the selling price imposed by the importer which must not fall below 105% of the import price. Import price equals (=) price  on which import duty is imposed plus (+) import duty (if any) plus (+) excise tax charged upon importation. In case the selling price imposed by the importer is lower than 105% of the import price, the tax authority shall impose the taxable price according to regulations of law on tax administration.

For manufacturer/assembler of vehicles that seat fewer than 24 people, the taxable price is the selling price imposed by the manufacturer which must not fall below 7% of the average selling price imposed by the resellers. The average selling price imposed by the resellers is the selling prices without additional equipment and parts requested by the buyers. In case the selling price imposed by the manufacturer/assembler is lower than 7% of the average selling price imposed by the resellers, the taxable price shall be imposed by the tax authority according to regulations on tax administration.

2. Taxable prices for imported goods are determined as follows:

Taxable price = price on which import duty is imposed + import duty.

The price on which import duty is imposed is determined according to regulations on export duties and import duties. If the imported goods are eligible for reduction or exemption of import duty, the taxable price shall not include the decrease in import duty.

3. Taxable prices for goods subject to excise tax do not exclude the value of their packages.

The manufacturer and customers must make quarterly statements of the deposit on the beer bottles (if any), and the deposit on unrecoverable bottles must be included in revenue subject to excise tax.

4. Taxable prices for processed goods excise tax is the selling prices imposed by the processor or selling prices for similar products at the same time.

In case the processor sells processed goods to resellers, the taxable price shall be determined in accordance with Point b and Point c Clause 1 of this Article.

5. For goods manufactured under in cooperation between a manufacturer and a user/owner of the trademark (brand name) or technologies, taxable prices are the selling prices imposed by the user/owner of the trademark (brand name) or technologies. If goods are manufactured under a franchise license and supply them for a foreign company’s branches or representative offices in Vietnam for sale, the taxable prices are the selling prices imposed by such branches or representative offices.

If goods are sold to resellers, taxable prices shall be determined in accordance with Point b and Point c Clause 1 of this Article.

6. For goods sold under an installment plan or deferral plan, the taxable price is the original selling price exclusive of installment and deferral interest.
7. Taxable prices for services are the prices imposed by service providers.
8. a) For golf course business, taxable prices are VAT-exclusive revenue from selling memberships, golf tickets including practice tickets, payment for golf course maintenance, buggy rental, caddies, deposits (if any), and other amounts paid by players and members to the gold course. Other goods/services not subject to excise tax such as hotel, food and drink, commodities and games provided by the golf course are not subject to excise tax.
9. b) For casinos and electronic casino games, taxable prices are revenues minus (-) prizes given to players;
10. c) For betting business, taxable prices are revenues from selling betting tickets minus (-) prizes;
11. d) For discotheque, massage, and karaoke business, taxable prices are revenues from activities within the discotheque, massage establishment, karaoke establishment, including revenues from food and drink services and other services;
12. dd) For lottery business, taxable prices are revenues from selling lottery tickets and other permissible form of lottery business.
13. Taxable prices for goods/services used for exchange, internal use, gifting, donation are taxable prices for the same or similar goods/services at that time.
14. Taxable prices for goods/services mentioned in this Article include every surchage collected by the manufacturer/seller. Taxable prices for tobacco include compulsory contributions and funds prescribed by the Law on Prevention and fight against harmful effects of tobacco.

The time of earning revenues from goods are the time of transfer of the right to own or the right to use such goods to the buyer, whether or not the payment is collected; the time of completion of service provision or the time of issuance of the invoice for service provision, whether or not the payment is collected.

Article 5. Tax rate

Excise tax rates are specified in the excise tax schedule in Clause 4 Article 1 of the Law on amendments to the Law on excise duty.

1. Motor vehicles designed to transport both passengers and cargo mentioned in Point 4d and 4g of the excise tax schedule are those that have at least 2 aisles and a partition that separates the passenger compartment and cargo compartment according to national standards promulgated by the Ministry of Science and Technology.
2. Motor vehicles using both gasoline and biological fuel or electricity mentioned in Point 4dd of the excise tax schedule are those of which fuel contains not more than 70% gasoline and motor vehicles that combine an electric engine and an internal combustion engine of which fuel consumption does not exceed 70% of that of the most fuel-efficient vehicle with the same number of seats and cylinder capacity on Vietnam’s market.
3. Motor vehicles running by biological fuel or electricity mentioned in Point 4e and Point 4g of the excise tax schedule are those running completely by biological fuel or electricity.

Chapter III

REFUND AND DEDUCTION OF EXCISE TAX

Article 6. Tax refund

Refund of excise tax shall comply with Article 8 of the Law on excise duty.

1. Temporarily imported goods mentioned in Point a Clause 1 Article 8 of the Law on excise duty are eligible for refund of excise tax, including:
2. a) Imported goods on which excise tax has been paid that are still retained at the border checkpoint under the control of customs authority, and then re-exported;
3. b) Imported goods on which excise tax has been paid that are intended to be delivered/sold to abroad via agents in Vietnam; imported goods to be sold to foreign vehicles going to Vietnam’s ports or Vietnamese vehicles on international routes as prescribed by law;
4. c) When temporarily imported goods are re-exported, paid excise tax on the re-exported goods shall be refunded;
5. a) When imported goods on which excise tax has been paid are re-exported, paid excise tax on the amount of re-exported goods shall be refunded;
6. dd) When goods imported to participate in a fair, exhibition, product introduction, or to be used for a certain period of time are re-exported, excise tax (if any) shall be refunded.

When temporarily imported goods are re-exported by the deadline for paying tax prescribed by regulations of law on export duties and import duties, excise tax on the re-exported goods shall not be paid.

2. With regard to materials imported for manufacturing or processing goods for export, paid excise tax on the amount of materials used for manufacturing exported goods shall be refunded.
3. Documents and procedures for refund of excise tax on imported goods in the cases mentioned in Clause 1 and Clause 2 of this are the same as those for refund of import duties.
4. A terminal statement shall be made when a business establishment is merged, fully divided, partially divided, dissolved, bankrupt, converted and excise tax is overpaid.
5. Tax refund mentioned in Point d Clause 1 Article 8 of the Law on excise duty include:
6. a) Tax refund under a decision of a competent authority as prescribed by law;
7. b) Tax refund under an international agreement to which the Socialist Republic of Vietnam is a signatory;
8. c) Tax refund in case excise tax is overpaidas prescribed by law.

Article 7. Tax deduction

1. Taxpayers who manufacture goods subject to excise tax from materials subject to excise tax may deduct paid excise tax on imported materials from the excise tax payable if they are bought domestically. The amount of deductible excise tax depends on the amount of raw materials used for manufacturing goods that are sold.
2. Payers of excise tax on imported goods subject to excise tax (other than gasoline) may deduct excise tax upon importation from total excise tax on goods sold in Vietnam. The amount of deductible excise tax depends on the amount of imported goods subject to excise tax that are sold. The taxpayer may include the amount of non-deductible excise tax in expense when calculating corporate income tax.
3. Excise tax shall be deducted when it is declared.
4. The Ministry of Finance shall provide specific guidelines for deduction of excise tax as prescribed in Clause 1 and Clause 2 of this Article.

Chapter IV

IMPLEMENTATION

Article 8. Effect and guidance on implementation

1. This Decree comes into force from January 01, 2016 and replaces the Government’s Decree No. 26/2009/ND-CP and Decree No. 113/2011/ND-CP on guidelines for the Law on excise duty.
2. The Ministry of Finance shall provide guidelines for the implementation of this Decree.

Ministers, Heads of ministerial agencies, Heads of Governmental agencies, Presidents of the People’s Committees of provinces are responsible for the implementation of this Decree./.

 

ON BEHALF OF THE GOVERNMENT THE PRIME MINISTER Nguyen Tan Dung

 

 

Link to download the Decree:

Decree No. 108/2015/ND-CP dated October 28, 2015