EXCISE TAX

LOGO
 CONTENT

1 OVERVIEW OF EXCISE TAX

MAIN CONTENT OF EXCISE TAX

2 IN VIETNAM
 1. OVERVIEW OF EXCISE TAX

▪ Definition

▪ Excise Tax levies on special goods and

services that are on prescribed list on
Excise tax law.
 DEFINITION

▪ What are special goods and services?

▪ Luxury goods and services

▪ Goods and services that are limited in

consumption by the government

▪ Their demand normally changes

according to changes in income; rarely
changes according to price changes.
 CHARACTERISTICS

▪ Indirect tax
▪ Often regressive in comparison with income

▪ Levies only on production stage, import

stage or imported and then sold
domestically stage.
▪ The tax rates are normally high.

▪ The list of special goods and services includes

a small number of items and often changes.
 LEGAL DOCUMENTS

▪ Vietnam Law 27-2008: Law on Excise Tax

▪ Vietnam Law 70-2014: ammendments of Law 27-2008
▪ Vietnam Law 71-2014: ammendments on several tax laws
▪ Vietnam Law 106-2016: ammendments on several tax laws
▪ Vietnam Decrees: 26/2009/ND-CP, 113/2011/ND-CP,
108/2015/ND-CP, 100/2016/ND-CP
▪ Vietnam Circulars: 05/2012/TT-BTC, 195/2015/TT-BTC,
130/2016/TT-BTC
2. MAIN CONTENT OF EXCISE TAX LAW IN
VIETNAM

2.1. SCOPE OF APPLICATION

2.2. TAX CALCULATION BASIS

2.3. TAX DECLARATION &

SUBMISSION

2.4. TAX REDUCTION & REFUND

 2.1. SCOPE OF APPLICATION

▪ Taxable objects

▪ Non-taxable objects

▪ Taxpayers
 a. Taxable objects

GOODS
SERVICES

1. Cigarettes, cigars and

other tobacco preparations 1. Dance halls
2. Liquor 2. Massage parlors and
3. Beer karaoke bars
4. Under 24-seat cars 3. Casino
5. Motorcycle with cylinder of 4. Betting business
over 125 cm3 5. Golf business
6. Aircraft & yacht 6. Lottery business
7. Gasoline, naphtha…
8. Air-conditioners of
90.000BTU or less
9. Playing cards
10. Votive gilt papers and
votive objects
Under 24 seat cars
Motorcycles
 b. Non-taxable objects

1. Goods directly exported by producers

or processors or sold or entrusted to other
business establishments for export.
 b. Non-taxable objects

2. Imported goods in the following cases:

- Humanitarian and non-refundable aid,
gifts and donations
- Goods transited or transported through
Vietnam’s border.
- Goods temporarily imported
- Goods temporarily imported for duty-free
sale at duty-free shops under law.
 b. Non-taxable objects

3. Goods imported from abroad into

non-tariff areas; goods sold from inland
Vietnam into non-tariff areas; and goods
traded between non-tariff areas; except
under 24-seat cars.

4. Aircraft and yachts used for commercial

cargo or passenger transportation or
tourism business
 b. Non-taxable objects

5. Cars designed by manufacturers to be

used as ambulances, prison vans or
hearses;
- Cars designed with both seats and
standing places for transporting 24 or
more people;
- Cars operating within recreation,
entertainment and sport centers.
 b. Taxable objects

6. Air-conditioners of a capacity of 90.000

BTU or less which are designed by
manufacturers only to be fitted on means of
transport, including cars, train carriages,
ships, boats or aircraft.
 c. Taxpayers

Organizations &
individuals

Produce goods and

Import goods that
provide services
subject to Excise
that subject to
tax
Excise tax
 2.2. TAX CALCULATING BASIS

Excise tax
Excise tax Excise tax
calculation
payable rate
price
 Excise tax calculation price

Rule: Excise tax calculation price is

Excise tax-exclusive price
 Excise tax calculation price

Imported goods then sold domestically

Domestic produced goods and services

Selling Env
price protection
exclusive tax (if
of VAT any)
Excise tax
cal. price

1 + Excise
tax rate
 Eg.1

A beer producer sell its beer for 48,000

dong/litre (VAT-exclusive); the excise
tax rate of beer is 60%.
Calculate the Excise tax calculation
price of 1 litre of beer.
 Excise tax calculation price

Imported goods

Excise
Import Import
tax cal.
price tax
price
 Example 2

Enterprise A imported 1,000 beer bottles with

import price of 20,000 VND/bottle. In the tax period,
Enterprise A sold 1,000 bottles domestically with
the VAT-exclusive price of 48,000 VND/bottle. The
excise tax rate of beer is 60% and the import tax
rate of beer is 30%.

Calculate the Excise tax calculation price of 1 beer

bottle at the import stage and the imported then
sold domestically stage.
 Some special cases

▪ If an excise tax-liable goods producer sell goods

via its dependent cost-accounting establishments
=> the taxed price is the selling price exclusive of
VAT and environment protection tax.

▪ If an excise tax-liable goods producer sell goods

via agents that sell goods at fixed price => the
excise tax calculation price is the fixed price set
by the producer, including commissions.
Goods sold to affiliated trading establishments

▪ The selling price used to determine the excise

tax calculation price shall not be lower than 7% of
the monthly average price of goods directly
purchased by the trading establishments from
manufacturers or importers.
 Affiliated trading establishments

▪ Refer to the parent company-subsidiary company

or subsidiaries of the same parent company
which directly or indirectly holds at least 20% of
the chartered capital of the other.
 Example

1. Producer (A) sells A1 (affiliated)

B & C (non-affiliated)

=> The selling price used to determined the

excise tax calculation price when A sells to A1
shall not be lower than the average price that A
sells to B & C.
 Some special cases

Excise tax-liable goods with containers

or packages.

Excise tax calculation price is the price

exclusive of VAT, environment protection
tax (if any) and excise tax; inclusive of the
tare value of the package.
 Some special cases

Processed goods

The taxed price is that of sold goods set by

processing-ordering establishment or the
selling price of products of the same or
similar kind at the time of goods sale;
exclusive of VAT, environment protection
tax (if any) and excise tax.
 Processed goods

Goods Materials, $ Process-ordering Con.

Processor Goods establishment

100 130
 Eg. Processed goods 1

A business entity signs contract with

company B to process 2,000 cigarette
cartons with the process price of 30,000
dong per carton (exclusive of VAT & Excise
tax). At the end of tax period, the processor
has delivered 2,000 cartons to B. B has sold
2.000 carton in Vietnam with the price of
132,000 dong per carton.
Calculate the payable VAT (10%) and
Excise tax (65%) of the business entity.
 Eg. Processed goods 2

A business entity signs contract with

company B to process 2,000 cigarette
cartons with the process price of 72,000
dong per carton (exclusive of VAT &
inclusive of Excise tax). At the end of tax
period, the processor has delivered 2,000
cartons to B. B has sold 2.000 carton in
Vietnam with the price of 132,000 dong/car.
Calculate the payable VAT (10%) and
Excise tax (65%) of the business entity.
 Some special cases

Goods sold on installment or deferred

payment

The excise tax calculation price is the

one-off selling price of such goods;
exclusive of VAT, environmental protection
tax (if any), excise tax and the installment
or deferred payment interest.
 Some special cases

Excise tax-liable goods which an

exporter purchases from producers for
export then does not export

The taxed price is the selling price

exclusive of excise tax, environmental
protection tax (if any) and VAT.
 Eg. 2

▪ An exporter B purchases 25,000 cigarette

cartons from producer A for export.
However, the exporter has only exported
20,000 carton with the export price of
65,000 dong/carton.
▪ 5.000 cartons left, B sold in domestic
market with the VAT-exclusive price of
82,500 dong/carton.
▪ Calculate the excise tax calculation price of
5,000 cartons of cigarret sold domestically
 Some special cases

Golf business

The taxed price is VAT-exclusive sales of

membership cards or golf-playing tickets,
inclusive of proceeds from the sale of
golf-training tickets, collection of ground
maintenance fees, buggy and caddy hire,
deposits and other golf-related revenues
paid by golf players to a golf business.
 Some special cases

Casino

The excise tax calculation price is turnover

from the business minus prizes paid to
customers (exclusive of VAT).
 Some special cases

Betting business

The excise tax calculation price is the sales

of betting tickets minus prizes paid to
customer (exclusive of VAT); exclusive of
sales of entry tickets to entertainment
events associated with betting business.
 Some special cases

Dance hall, massage parlor and karaoke

bar business

Excise tax calculating price is the turnover

(exclusive of VAT) from such business;
inclusive of the turnover from catering
services and other associated services.
 Notes about invoices

▪ When selling or delivering goods to their

branches, dependent establishments or
agents; producers shall issue invoices.
▪ In case of delivering goods to branches or
shops in the same province or centrally run
city or when consigning goods from one to
another warehouse, producer may use the
ex-warehousing-cum-internal
transportation bill, enclosed with the
internal transfer order.
 EXCISE TAX RATES

8 different tax rates ranging from 10% -

75% for different types of goods and
services.
 EXCISE TAX RATES
No. Goods & services Tax rates (%)
A Goods
1 Cigarettes, cigars and other tobacco preparations 65
- from 1/1/2016 – 31/12/2018 70
- from 1/1/2019 75
2 Liquor
a) Of 200 proof or higher 50
- from 01/01/2016 - 31/12/2016 55
- from 01/01/2017 - 31/12/2017 60
- from 1/1/2018 65
b) Below 200 proof 25
- from 1/1/2016 - 31/12/2017 30
- from 1/1/2018 35
3 Beer 50
- from 01/01/2016 - 31/12/2016 55
- from 01/01/2017 - 31/12/2017 60
- from 1/1/2018 65
 EXCISE TAX RATES
No. Goods Tax rates (%)
4 Under 24-seat cars
a) Passenger cars of 9 seats or fewer
- Cylinder capacity of 2000 cm3 or less 45
- Cylinder capacity of 2000 – 3000 cm3 50
- Cylinder capacity of 3000 cm3 or more 60
b) Passenger cars of 10-16 seats 30
c) Passenger cars of 16 to less than 24 seats 15
d) Cars for both passenger and cargo transportation 15
e) Cars running on gasoline in combination with electricity or Bằng 70% mức
thuế suất áp dụng
bio-fuel, with gasoline accounting for not more than 70% of the cho xe cùng loại
used fuel
g) Cars running on bio-fuel Bằng 50% mức
thuế suất áp dụng
cho xe cùng loại

h) Ellectrically-operated cars
- Passenger cars of 9 seats or less 25
- Passenger cars of 10 to less than 16 seats 15
- Passenger cars of 16 to less than 24 seats 10
- Cars for both passenger and cargo transportation 10
 EXCISE TAX RATES
No. Goods Tax rates (%)
5 Two- and three-wheeled motorcycles of a cylinder capacity 20
of over 125 cm3
6 Aircrafts & yachts 30
8 Gasoline of all kinds, naphtha, reformade components and 10
other components for mixing gasoline
9 Air conditioners of 90,000 BTU or less 10
10 Playing cards 40
11 Votive gilt papers and votive objects 70
B Services
1 Dance halls 40
2 Massage parlors and karaoke bars 30
3 Casinos and prize-winning video games 35
4 Betting 30
5 Golf business 20
6 Lottery business 15
 2.3. TAX DECLARATION & SUBMISSION

Tax deduction
▪ The excise tax amount already paid on
excise tax-liable raw materials, which are
used to produce excise tax-liable goods,
can be deducted.

Excise tax amount

already paid upon
Excise tax payable buying raw
for taxable goods materials
Excise tax payable
ex-warehoused for equivalent to the
sale in the period volume of goods
ex-warehoused for
sale in the period
 Eg of tax deduction

▪ In June 2018, Company A imported 20,000 litre of

fresh beer:
- The total Excise tax payable: 60 mil VND
- The total VAT payable: 24 mill VND
▪ Company A has produced 40,000 beer bottles using
this amount of fresh beer.
▪ In this month, the company has sold 10,000 beer
bottles:
- VAT-exclusive price: 16,000 dong/bottle
- Excise tax rate for beer: 60%
Calculate the Excise tax payable in this period.
2.3. TAX DECLARATION & SUBMISSION

▪ If an exporter purchase excise tax-liable

goods from producers for export then
does not export but sells them
domestically; the exporter must declare
and submit Excise tax instead of the
producers.
2.4. TAX REDUCTION & REFUND

a) Tax reduction
▪ Excise tax payers face difficulties caused
by natural disasters or unexpected
accidents
▪ The tax reduction must not exceed 30%
of the payable tax amount in the year the
damage occurs.
▪ The tax reduction must not exceed the
balance between the value of damaged
assets and the received compensation (if
any)
 Eg. of tax reduction

In 2018, an fire occurs on the production unit of

a cigarette producer. The total damaged value is
5 bil VND. The insurance company has
examined and paid the insurance money of 3.5
bil VND. In the financial year, the company
occurred a loss of 2 bil VND. The total Excise
tax payable in the year is 6 bil VND.
▪ Calculate the amount of tax reduction for
the producer in this case!
 2.4. TAX REDUCTION & REFUND

b) Tax refund

1. Goods temporarily imported for re-export

2. Goods which are raw materials imported

for export production and processing

3. Other cases
 Eg. 3

In Sept 2018, a beer producer occurred the following activities:

▪ Purchased 50,000 litre of fresh beer from another producer
with the price (VAT-exclusive) of 16,000 dong/litre
▪ Ex-warehoused 40,000 litre of fresh beer to produce bottled
beer with the consumption norm of 0.5litre/bottle.
▪ Sold 80,000 beer bottles produced, including: sold in domestic
market 50,000 bottles (VAT-exclusive price of 32,000
dong/bottle); entrusted export of 20,000 bottles; sold to a
exporter for export according to exporting contract 10,000
bottles (VAT-exclusive price of 28,800 dong/bottle)
▪ Sold the 10,000 litre of fresh beer left to another beer producer
with the price (VAT-exclusive) of 19,200 dong/litre.
Determine the Excise tax payable that the producer must pay
The excise tax rate of beer is 60%
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