Law on Special Consumption Tax No. 05/1998/QH10

LAW

Special consumption tax

To guide the production and consumption of society, to reasonably regulate the income of consumers for the state budget, and to strengthen management of production and business activities for certain goods and services;

Based on the Constitution of the Socialist Republic of Vietnam in 1992;

This Law stipulates special consumption tax;

PART I

GENERAL PROVISIONS

Article 1. Taxable objects

The following goods and services are subject to special consumption tax:

1. Goods:

a) Cigarettes, cigars;

b) Alcohol;

c) Beer;

d) Cars with less than 24 seats;

đ) Various types of gasoline, naphtha, reformate component, and other products used to blend gasoline;

e) Air conditioners with cooling capacity up to 90,000 BTU;

g) Playing cards;

h) Paper money, paper offerings;

2. Services:

a) Operating nightclubs, massage parlors, karaoke;

b) Operating casinos, jackpot games;

c) Operating horse racing and motor racing betting tickets;

d) Operating golf (golf): selling membership cards, golf playing tickets.

Article 2. Taxpayers

Organizations and individuals (referred to collectively as entities) producing, importing goods and operating services subject to special consumption tax are taxpayers of special consumption tax.

Article 3. Tax-exempt objects

Goods specified in Clause 1 of Article 1 of this Law are not subject to special consumption tax in the following cases:

1. Goods produced or processed directly for export or sold, entrusted to trading entities for export;

2. Goods imported in the following cases:

a) Humanitarian aid, non-repayable aid; gifts to state agencies, political organizations, socio-political organizations, social organizations, occupational social organizations, people's armed forces units; items of foreign organizations and individuals according to diplomatic exemption standards; goods carried by persons within the duty-free baggage allowance;

b) Goods in transit, transiting, or passing through Vietnam;

c) Temporarily imported goods for re-export and temporarily exported goods for re-import within the period before taxes become due;

d) Goods imported for sale under tax-free regimes.

Article 4. Obligations and responsibilities for implementing the Special Consumption Tax Law

1. Taxpayers of special consumption tax have the obligation to pay taxes fully and on time as prescribed by this Law.

2. Tax authorities within their duties and powers are responsible for properly implementing the provisions of this Law.

3. State agencies, political organizations, socio-political organizations, social organizations, occupational social organizations, people's armed forces units within their functional scope and authority shall supervise and coordinate with tax authorities in the implementation of this Law.

4. Vietnamese citizens have the responsibility to assist tax authorities and tax officials in the implementation of this Law.

PART II
BASIS FOR TAXATION AND TAX RATE

Article 5. Basis for tax calculation

The basis for calculating special consumption tax is the taxable value of taxable goods and services and the tax rate.

Article 6. Domestic selling price of the exporting business excluding VAT

1. For domestically produced goods, it is the price at which the production establishment sells the goods at the place of production before adding the special consumption tax.

2. For imported goods, it is the import taxable value plus import tax.

3. For processed goods, it is the taxable value of similar domestically produced goods at the same time of delivery.

4. For services, it is the service supply price excluding special consumption tax.

5. For goods and services used for exchange or internal consumption, gifts, it is the special consumption tax taxable value of similar goods and services at the time these activities occur.

6. For domestically produced alcohol, casino operations, slot machine games, golf operations, the taxable value for special consumption tax is specifically regulated by the Government.

The taxable value for special consumption tax for goods and services specified herein includes additional amounts that the entity enjoys.

In case the production and business entity buys or sells goods and services in foreign currency, they must convert them into Vietnamese Dong according to the exchange rate announced by the State Bank of Vietnam at the time of revenue generation to determine the taxable value for special consumption tax.

Article 7. Machine tools for machining complete units (one operation position) and machine tools for multi-position machining to process metals.

The special consumption tax rate for goods and services is set out in the following Special Consumption Tax Table:

SPECIAL CONSUMPTION TAX TABLE

In necessary cases, Within 10 working days from the date of receipt of the dossier as mentioned in Sub-clause b, Clause 1, Article 3 above, the Ministry of Foreign Affairs will review and submit to the competent authority for decision (Issues exceeding the Ministry of Foreign Affairs' jurisdiction will be referred to the Prime Minister for consideration and decision).the Standing Committee of the National Assembly decides to amend and supplement the list of goods and services subject to special consumption tax, special consumption tax rates, and reports to the National Assembly for approval at the nearest session.

CHAPTER III
REGISTRATION, DECLARATION AND PAYMENT OF TAX, SETTLEMENT OF TAX

Article 8. Tax registration

Production entities producing goods and trading entities operating services subject to special consumption tax must register for tax payment with the tax authority where production and business take place according to the tax registration regulations and guidance of the tax authority.

The deadline for tax registration is no later than ten days from the date of issuance of the business registration certificate.

In cases of merger, consolidation, division, separation, dissolution, bankruptcy, change in business activities, or cessation of business, the production and business entity must report to the tax authority at least five days before such changes occur.

Article 9. Registration of product trademarks and invoices, certificates

1. Entities producing goods subject to special consumption tax that use product trademarks must register the trademark model with the tax authority where production and business take place no later than five days from the date of use. When changing the product trademark, the entity must report to the tax authority no later than five days from the date of change.

2. Purchases, sales of goods and services, and transportation of goods subject to special consumption tax must be accompanied by invoices and certificates as prescribed by law.

Article 10. Tax Declaration

1. Entities producing goods and trading services subject to special consumption tax must declare special consumption tax monthly and submit the tax declaration form to the tax authority within ten days at the beginning of the following month. For entities with large amounts of special consumption tax, they must declare and pay special consumption tax periodically every five or ten days according to the tax authority's regulations.

If there is no special consumption tax generated in a month, the production and business entity still must declare and submit the tax declaration form to the tax authority.

2. Import establishments must declare and submit the special consumption tax declaration form for each importation together with the customs declaration for import duties to the customs revenue collection authority.

3. Entities producing goods subject to special consumption tax using raw materials already taxed can deduct the previously paid special consumption tax on raw materials if they have legal documentation when declaring special consumption tax at the production stage.

4. Entities producing and trading multiple types of goods and services subject to special consumption tax with different tax rates must declare special consumption tax separately according to each specified tax rate for each type of goods and services; if the entity cannot determine the tax rate for each type, then they must calculate based on the highest tax rate applicable to the goods and services they produce and trade.

Production and import entities of goods and trading entities of services subject to special consumption tax must declare fully and accurately according to the tax declaration form and bear responsibility for the accuracy of the declaration.

The Ministry of Finance shall stipulate the model of the tax declaration form and guide the declaration process.

Article 11. Payment of Tax

Special consumption tax is paid into the State budget as follows:

1. Production establishments and service businesses subject to special consumption tax must pay the special consumption tax into the state budget at the place of production and business operation according to the tax payment notice issued by the tax authority.

The tax payment deadline for the month is recorded in the tax notification no later than the twentieth day of the following month;

2. The basis for importing goods subject to special consumption tax must pay the special consumption tax according to each importation.

The deadline for notification and payment of the special consumption tax for imported goods shall be carried out according to the deadlines for notification and payment of import tax;

3. The special consumption tax shall be paid into the state budget in Vietnamese dong.

Article 12. Settlement of tax

The production bases of goods and service businesses subject to special consumption tax must settle the annual special consumption tax with the tax authority. The tax settlement year is calculated according to the Gregorian calendar. Within sixty days from the end of the year, the base must submit the tax settlement report to the tax authority and must fully pay any outstanding taxes into the state budget within ten days from the date of submitting the tax settlement report; if overpaid, it can be deducted from the tax payable in the next period.

In cases of merger, consolidation, division, separation, dissolution, bankruptcy, or change in business activities, the base must settle the tax with the tax authority and submit the tax settlement report to the tax authority within forty-five days from the date of the decision on merger, consolidation, division, separation, dissolution, or bankruptcy, and must fully pay any outstanding taxes into the state budget within ten days from the date of submitting the tax settlement report; if overpaid, it can be deducted from the tax payable in the next period or refunded according to Article 13 of this Law.

Article 13. Refund of tax

Production and import bases of goods subject to special consumption tax are entitled to a refund of the special consumption tax already paid in the following cases:

1. Goods temporarily imported for re-export;

2. Goods are imported raw materials for producing or processing export goods;

3. Settlement of tax when merging, consolidating, dividing, separating, dissolving, or going bankrupt, resulting in an overpayment of tax;

4. Decision on tax refund issued by the competent authority according to the law.

The Ministry of Finance shall specify the procedures and authorities for handling tax refunds as provided in this Article.

Article 14. Duties, powers, and responsibilities of the tax authority

The tax authority has the following tasks, powers, and responsibilities:

1. Guide taxpayers to comply with registration, declaration, and tax payment regimes as prescribed by this Law;

2. Notify taxpayers about the amount of tax due and the deadline for payment according to the regulations; if the taxpayer fails to pay the tax within the notified deadline, continue to issue notifications regarding the amount of tax due and the late payment penalty according to Clauses 2 and 3 of Article 17 of this Law; if the taxpayer still does not pay the full amount of tax and penalties as notified, the authority has the right to apply coercive measures as stipulated in Clause 4 of Article 17 of this Law to ensure the collection of the full amount of tax and penalties; if such coercive measures have been implemented but the taxpayer still does not pay the full amount of tax and penalties, transfer the file to the competent state agency for handling according to the law;

3. Inspect and audit the declaration and payment of taxes and tax settlements of taxpayers to ensure compliance with the law;

4. Handle administrative violations related to taxes and resolve tax complaints;

5. Requesting taxpayers to provide accounting books, invoices, documents, and other relevant materials concerning tax calculation and payment;

6. Keeping and using the data and records provided by taxpayers and other parties according to the prescribed system.

Article 15. Power to determine tax

1. The tax authority determines the amount of special consumption tax payable by taxpayers in the following cases:

a) Failure to implement or improperly implement accounting systems, invoices, and vouchers;

b) Failure to declare or submit a declaration beyond the prescribed deadline; submission of a declaration but incorrect declaration of the bases for determining the special consumption tax;

c) Refusal to present accounting books, invoices, documents, and necessary materials related to tax calculation;

d) Engaging in business without registration and being discovered.

2. The tax authority bases its determination of the amount of tax payable on investigation materials regarding the production and business operations of the taxpayer or on the tax payable by similar-sized production and business bases in the same industry.

PART IV
REDUCTION AND EXEMPTION OF SPECIAL CONSUMPTION TAX

Article 16. Cases eligible for reduction or exemption of special consumption tax

1. Production bases of goods subject to special consumption tax encountering difficulties due to natural disasters, enemy attacks, or unexpected accidents may be considered for tax reduction or exemption.

2. Small-scale beer production bases that are operating and have paid the special consumption tax as prescribed in Article 7 of this Law but incurred losses may be considered for a corresponding reduction in special consumption tax for the loss incurred during the tax reduction period, which shall not exceed five years from the effective date of this Law.

3. Domestic automobile assembly and production bases are entitled to a reduction of up to 60% to 100% of the special consumption tax rate as prescribed in Article 7 of this Law for the first five years from the effective date of this Law; if they continue to incur losses, the tax reduction period may be extended by one to five additional years.

4. Golf business bases are entitled to a 30% reduction in the special consumption tax rate as prescribed in Article 7 of this Law for three years from the effective date of this Law.

The Government shall specify the details of tax reductions and exemptions under this provision.

CHAPTER V
VIOLATION HANDLING AND REWARD

Article 17. Handling violations by taxpayers

Taxpayers violating the Special Consumption Tax Law shall be handled as follows:

1. Failure to comply with the provisions on registration, declaration, payment of taxes, tax settlement, accounting systems, and retention of invoices and vouchers as prescribed in Articles 8, 9, 10, 11, and 12 of this Law shall result in administrative fines for tax violations depending on the nature and degree of violation;

2. Late payment of taxes or penalties beyond the prescribed payment date or the decision on tax penalties shall require the taxpayer to pay the full amount of tax and penalties, plus a daily late payment penalty of 0.1% (one thousandth) of the amount overdue;

3. False declaration of taxes or tax evasion shall require the taxpayer to pay the full amount of tax as prescribed by this Law, plus administrative fines ranging from one to five times the amount of evaded tax; large-scale tax evasion or repeated violations after administrative fines for tax violations shall result in criminal prosecution according to the law;

4. Failure to pay taxes or penalties as notified or decided shall result in enforcement through the following measures:

a) Seize funds deposited by the taxpayer at banks, credit institutions, or treasuries to pay taxes or penalties.

Banks, credit institutions, or treasuries shall be responsible for deducting funds from the taxpayer's account to pay taxes or penalties into the state budget according to the tax authority's or competent state agency's decision before collecting debts;

b) Detain goods or evidence to ensure the collection of the full amount of tax and penalties;

c) Seizing assets according to the law to ensure the full collection of outstanding taxes and fines.

Article 18. Authority of the tax authority in handling tax violations

1. The head of the tax administration directly responsible for tax collection has the authority to handle violations by taxpayers as specified in Clauses 1, 2, and 3 of Article 17 of this Law.

2. The Director of the Tax Administration and the Head of the Tax Branch directly responsible for tax collection may apply the handling measures specified in Clause 4 of Article 17 of this Law and transfer the case file to the competent authority for criminal prosecution according to the provisions of criminal law for violations as specified in Clause 3 of Article 17 of this Law.

Article 19. Handling violations by tax officials and other individuals

1. Tax officials and other individuals who abuse their positions or powers to illegally use or embezzle tax money or fines must fully return all such improperly used or embezzled amounts to the State and will be subject to disciplinary action or criminal responsibility according to the provisions of the law depending on the nature and severity of the violation.

2. Tax officials and other individuals who lack a sense of responsibility or make mistakes causing damage to taxpayers shall have the compensation for damages carried out according to the provisions of civil law. If they cause damage, they will be subject to disciplinary action or criminal responsibility according to the provisions of the law depending on the nature and severity of the violation.

3. Tax officials and other individuals who abuse their positions or powers to collude or cover up for violators of the Special Consumption Tax Law or engage in other acts violating the provisions of this Law will be subject to disciplinary action or criminal responsibility according to the provisions of the law depending on the nature and severity of the violation.

4. Individuals obstructing or inciting others to obstruct the enforcement of the Special Consumption Tax Law will be subject to administrative penalties or criminal responsibility according to the provisions of the law depending on the nature and severity of the violation.

Article 20. Awards

Tax administrations and tax officials who successfully complete assigned tasks; organizations and individuals with achievements in implementing the Special Consumption Tax Law; taxpayers who fulfill their tax obligations well will be rewarded.

The Government shall specify the details of rewards.

Chapter VI
APPEALS, LAWSUITS AND STATUTE OF LIMITATIONS

Article 21. Rights and responsibilities of taxpayers in appealing tax matters

1. Taxpayers have the right to appeal against tax officials or tax administrations that enforce the Special Consumption Tax Law incorrectly.

The appeal must be submitted to the tax administration directly responsible for tax collection within thirty days from the date of receiving the notification or decision of the tax official or tax administration.

While waiting for resolution, taxpayers must still comply with the notification or decision of the tax official or tax administration.

2. In cases where the appellant disagrees with the decision of the appeal resolution body or if the matter remains unresolved beyond the time limit specified in Article 22 of this Law, the appellant has the right to appeal to the higher-level tax administration or file a lawsuit at the court according to the provisions of the law.

Article 22. Responsibilities and authorities of the tax administration in resolving tax appeals

1. Upon receipt of a tax appeal, the tax administration must resolve it within fifteen days from the date of receipt; for complex cases, the period may be extended but not exceeding thirty days; if the case does not fall within its jurisdiction, it must transfer the file or report to the competent authority for resolution and inform the appellant within ten days from the date of receipt of the appeal.

2. The tax administration receiving the appeal has the right to request the appellant to provide relevant files and documents related to the appeal; if the appellant refuses to provide the files and documents, the tax administration has the right to refuse to consider and resolve the appeal.

3. The tax administration must refund the improperly collected tax and fines to the taxpayer within fifteen days from the date of receipt of the decision of the higher-level tax administration or the competent authority according to the law.

4. If fraud, tax evasion, or tax errors are discovered and concluded, the tax administration has the responsibility to recover taxes and fines or refund taxes within five years from the date of discovery of the fraud, tax evasion, or tax error. For taxpayers who did not register for tax declaration, the recovery period starts from when the taxpayer began operations.

5. The head of the higher-level tax administration is responsible for resolving tax appeals of taxpayers against lower-level tax administrations.

The decision of the Minister of Finance resolving tax appeals is the final decision.

Chapter VII
IMPLEMENTATION

Article 23

The Government directs the implementation of the Special Consumption Tax Law throughout the country.

"d) Within no more than one working day from the date of receiving the dossier submitted for administrative procedures by the specialized agency assigned by the Provincial People's Committee, the Chairman of the Provincial People's Committee shall issue a notification of the result of the inspection of plant-based food exports or a certificate at the request of the importing country."

The Minister of Finance is responsible for organizing the implementation and monitoring the implementation of the Special Consumption Tax Law throughout the country.

Article 25

Within 10 working days from the date of receipt of the dossier as mentioned in Sub-clause b, Clause 1, Article 3 above, the Ministry of Foreign Affairs will review and submit to the competent authority for decision (Issues exceeding the Ministry of Foreign Affairs' jurisdiction will be referred to the Prime Minister for consideration and decision).People's Committees at all levels within their respective duties and powers direct the implementation and monitor compliance with the Special Consumption Tax Law in their localities.

Chapter VIII
IMPLEMENTING PROVISIONS

Article 26.

This Law takes effect from January 1, 1999.

This Law replaces the Special Consumption Tax Law dated June 30, 1990, the Law Amending and Supplementing Certain Provisions of the Special Consumption Tax Law dated July 5, 1993, and the Law Amending and Supplementing Certain Provisions of the Special Consumption Tax Law dated October 28, 1995.

Abolish provisions regarding special consumption tax in other regulatory legal documents from the date this Law takes effect.

Matters concerning outstanding taxes, tax settlements, tax exemptions and reductions, and the handling of special consumption tax violations before January 1, 1999, shall be resolved according to the corresponding provisions of the Special Consumption Tax Law, laws amending and supplementing certain provisions of the Special Consumption Tax Law, and provisions on special consumption tax in other regulatory legal documents.

Article 27.

In cases where international treaties to which the Socialist Republic of Vietnam is a party contain different provisions than this Law, the special consumption tax shall be implemented according to the provisions of those international treaties.

Article 28.

The Government shall provide detailed regulations and guidance for the implementation of this Law./.

This Law was passed by the National Assembly of the Socialist Republic of Vietnam, the tenth session, third meeting, on May 20, 1998.