Decree No. 149/2003/ND-CP detailing the implementation of the Special Consumption Tax Law and the Law Amending and Supplementing Certain Provisions of the Special Consumption Tax Law.

DECREE OF THE GOVERNMENT

Details implementing the Special Consumption Tax Law and

The Law Amending and Supplementing Certain Provisions of the Special Consumption Tax Law

_______________________

THE GOVERNMENT

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

Based on the Special Consumption Tax Law No. 05/1998/QH10 dated May 20, 1998 and the Law Amending and Supplementing Certain Provisions of the Special Consumption Tax Law No. 08/2003/QH11 dated June 17, 2003;

At the proposal of the Minister of Finance,

DECREE:

PART I
Object and Scope of Application for Special Consumption Tax

Article 1. The objects subject to special consumption tax are the goods and services listed below, except for cases specified in Article 3 of this Decree.

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 bars;

b) Operating casinos, jackpot games;

c) Operating entertainment services involving betting;

d) Operating golf: selling membership cards, golf playing tickets;

đ) Operating lottery sales.

Article 2. The taxpayers of the special consumption tax are organizations and individuals (collectively referred to as entities) engaged in production, importation of goods, and provision of services subject to special consumption tax as stipulated in Article 1 of this Decree.

Entities producing goods subject to special consumption tax must pay the special consumption tax at the production stage.

Entities importing goods subject to special consumption tax must pay the special consumption tax at the importation stage.

Entities providing services subject to special consumption tax must pay the special consumption tax on such services.

Article 3. Goods specified in Clause 1 of Article 1 of this Decree are not subject to special consumption tax in the following cases:

1. Goods produced or processed directly for export or sold, entrusted to export businesses for export by production entities.

In case an export business purchases goods subject to special consumption tax from a production entity for export but does not export them and instead sells them domestically, the export business must declare and pay the special consumption tax.

2. Goods imported in the following cases:

a) Imported goods are:

- Humanitarian aid, non-repayable aid;

- Gifts from foreign organizations and individuals to state agencies, political organizations, socio-political organizations, social organizations, occupational social organizations, and people's armed forces units. The value of gifts is within the limits prescribed by the Government;

- Personal effects of foreign organizations and individuals enjoying diplomatic privileges as prescribed by the Government in accordance with international treaties to which Vietnam is a party;

- Goods carried by travelers within the duty-free allowance for personal luggage;

b) Goods transiting through Vietnam under the following forms:

- Goods shipped directly from the exporting port to the importing port without stopping at a Vietnamese port;

- Goods arriving at a Vietnamese port but not undergoing customs clearance procedures in Vietnam and proceeding directly to the importing port;

- Goods placed in a bonded warehouse and then transferred to another country without undergoing customs clearance procedures in Vietnam according to the Bonded Warehouse Regulations;

- Goods transiting or passing through Vietnamese border crossings based on agreements signed between the two governments or departments and localities approved by the Prime Minister;

c) Goods temporarily imported for re-export and goods temporarily exported for re-import within the period exempt from export tax and import tax as provided for in the Export Tax Law and Import Tax Law;

d) Goods imported for sale tax-free to foreign agencies and individuals in Vietnam who enjoy diplomatic privileges under the tax exemption regulations;

Goods imported for sale tax-free at duty-free shops at airports, ports, railway stations, and border gates.

Entities importing goods that are exempt from special consumption tax as stipulated in Clause 2 of this Article must declare and pay the special consumption tax within three days from the date they use the goods for other purposes.

Chapter II
Basis for calculating tax and tax rates

Article 4. Abasis for calculating special consumption tax is the taxable price of goods and services subject to tax and the tax rate.

Article 5. The taxable price for special consumption tax is specified as follows:

1. For domestically produced goods, it is the selling price of the production unit before special consumption tax and value-added tax.

The taxable price for special consumption tax on domestically produced alcohol and beer is defined as follows:

a. For bottled alcohol and beer sold by domestic producers at prices including bottle costs, the selling price used to determine the taxable price for special consumption tax shall be reduced by the actual cost of the bottles before special consumption tax and value-added tax.

b. For canned beer sold by domestic producers at prices including can costs, the selling price used to determine the taxable price for special consumption tax shall be reduced by the actual cost of the cans based on a fixed price per liter of beer. The Ministry of Finance shall specify the specific reduction amount for cans in each period.

2. For imported goods, it is the import duty price plus import duties. In cases where imported goods are exempted or reduced from import duties, the taxable price does not include the exempted or reduced portion of the import duties.

3. For processed goods, it is the selling price of the processing unit before special consumption tax and value-added tax.

4. For goods sold on installment payment terms, the taxable price for special consumption tax is the price of the goods when sold in a lump sum payment (excluding the interest on installments).

In cases where production and business units sell goods through branches, stores, affiliated units, or agents who sell at marked prices and earn commissions, the taxable price for special consumption tax is based on the actual selling price of these branches, stores, affiliated units, or agents.

5. For services, it is the service supply price before special consumption tax and value-added tax.

The service supply price used to determine the pre-tax price for special consumption tax for certain services is specified as follows:

- For golf operations, it is the membership card sale price and the green fee.

- For casino services, slot machine games, and entertainment activities with wagers, it is the revenue from such activities minus the winnings paid out to customers.

6. For goods and services used for exchange, internal consumption, gifts, promotions, it is the taxable price of similar goods or services at the time these activities occur.

The taxable price for special consumption tax for goods and services stipulated in this Article includes additional amounts collected outside the selling price that the business entity enjoys.

If the taxpayer's revenue is in foreign currency, it must be converted to Vietnamese Dong at the exchange rate published by the State Bank of Vietnam at the time the revenue is generated to determine the taxable price.

The Ministry of Finance shall provide detailed guidance on determining the pre-tax price for special consumption tax for goods and services subject to tax as stipulated in this Article.

Article 6. The special consumption tax rate for goods and services is specified in the following Special Consumption Tax Table:

Special Consumption Tax Table

Specific regulations on the application of special consumption tax rates for certain goods and services are as follows:

1. For goods subject to special consumption tax, the rate of special consumption tax does not differentiate between imported goods and domestically produced goods.

2. Cigarettes with filters that are mainly produced from imported materials are cigarettes using more than 51% of imported tobacco strands compared to the total amount of tobacco strands used in producing such products.

3. Medicinal alcohol is not classified according to alcohol content. The production facilities of medicinal alcohol must have a production permit for medicinal alcohol and a registration certificate for the name, label, and quality of the medicinal alcohol product issued by health authorities or competent authorities. Imported medicinal alcohol must be identified as medicinal alcohol by health authorities or competent authorities. If these required documents are not available, the production and business entities must pay the special consumption tax at the rate applicable to alcoholic beverages with the corresponding alcohol content.

4. Goods subject to special consumption tax do not include children's toys and decorative goods.

5. Goods subject to special consumption tax within the group "various types of gasoline, naphtha (naphtha), reformate components, and other additives for blending gasoline" shall be specifically regulated by the Ministry of Finance in coordination with relevant agencies.

Chapter III
Registration, declaration of tax payment, and settlement of tax

Article 7. Production facilities and service providers subject to special consumption tax must register for tax payment with the Tax Authority at the location where the production facility or service provider is headquartered, in accordance with tax registration regulations and the guidance provided by 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, spin-off, dissolution, bankruptcy, change in ownership form; transfer, sale, lease, or assignment of state-owned enterprises, or changes in business activities or cessation of operations, the production and business facilities must report to the Tax Authority no later than five days before such changes occur.

Article 8. Production facilities producing goods subject to special consumption tax that use trademarks must register trademark samples with the Tax Authority at the location of the production facility or service provider no later than five days from the date of use of the trademark. When changing the trademark, the facility must report to the Tax Authority and register new trademark samples to replace the old ones no later than five days from the date of change.

Article 9. Production facilities, importers of goods, and service providers subject to special consumption tax must declare special consumption tax as follows:

1. Production facilities and service providers subject to special consumption tax must declare special consumption tax monthly when consuming goods and services and submit the tax declaration form to the Tax Authority within the latest ten days of the following month. For production and business facilities with large amounts of special consumption tax payable, they must declare special consumption tax periodically every five days or ten days according to the Tax Authority's regulations.

In cases where no special consumption tax arises in a month, the production and business facilities still must declare and submit the tax declaration form to the Tax Authority.

2. Importers of goods must declare and submit the special consumption tax declaration form for each importation along with the customs declaration for imported goods to the Customs Authority at the place of importation.

3. Production facilities producing goods subject to special consumption tax using raw materials that have already been taxed with special consumption tax may deduct the previously paid special consumption tax on raw materials if there is valid documentation. The maximum amount of special consumption tax deductible for raw materials cannot exceed the special consumption tax payable at the production stage.

4. Production and business facilities dealing with multiple types of goods and services subject to different special consumption tax rates must declare special consumption tax separately for each tax rate specified for each type of goods and services; if it is impossible to determine separately, then the facility must calculate based on the highest tax rate among the goods and services it produces and sells.

The Ministry of Finance will specify the format of the tax declaration form and provide guidance on the declaration procedures stipulated in this Article.

Article 10. Special consumption tax is paid into the State budget as follows:

1. Production facilities and service providers subject to special consumption tax must pay the special consumption tax into the State budget at the place of production or business operation.

The deadline for paying the tax of the month is no later than the twenty-fifth day of the following month; for production and business facilities with large amounts of special consumption tax payable, they must pay the special consumption tax periodically every five days or ten days according to the Tax Authority's regulations.

For individuals or households producing goods and providing services subject to special consumption tax far from the National Treasury, the Tax Authority will organize the collection of taxes and pay them into the State budget. The deadline for the Tax Authority to deposit funds into the State budget is no later than three days from the date of receipt of the money.

The Ministry of Finance will provide specific guidance on the procedures for declaring and paying taxes in line with administrative reform requirements, enhancing the sense of responsibility of businesses towards the law, while strengthening inspection and supervision to ensure effective tax revenue management.

2. Importers of goods subject to special consumption tax must pay the special consumption tax for each importation at the place of tax declaration. The deadlines for notification and payment of special consumption tax for imported goods follow the deadlines for notification and payment of import duties.

3. Special consumption tax shall be paid to the state budget in Vietnamese dong. In cases where production and business establishments have revenue from selling goods and services in foreign currency, they must convert the foreign currency into Vietnamese dong at the exchange rate published by the State Bank at the time of revenue generation to determine the amount of special consumption tax payable in Vietnamese dong.

Article 11. Production establishments for goods and service businesses subject to special consumption tax must settle special consumption tax according to the following regulations:

1. Production establishments for goods and service businesses subject to special consumption tax must annually settle special consumption tax with the Tax Authority. The tax settlement year is based on the Gregorian calendar. In cases where a business applies a different financial settlement year from the Gregorian calendar, it still must settle special consumption tax according to the Gregorian calendar. Within forty-five days from the end of the year, the establishment must submit the tax settlement report to the Tax Authority and pay any outstanding tax due to the state budget within ten days from the date of submitting the tax settlement report; if there is excess payment, it can be deducted from the tax payable in the next period.

2. In cases of merger, consolidation, division, separation, dissolution, bankruptcy, change in ownership form; transfer, sale, lease, assignment of state-owned enterprises, change in business sector, the establishment must settle taxes with the Tax Authority and submit the tax settlement report to the Tax Authority within forty-five days from the date of decision on merger, consolidation, division, separation, dissolution, bankruptcy, change in ownership form; transfer, sale, lease, assignment of state-owned enterprises, change in business sector, and pay any outstanding tax due to the state budget within ten days from the date of submitting the tax settlement report; if there is excess payment, it can be deducted from the tax payable in the next period or refunded according to the provisions.

Article 12. Production and import establishments 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. Raw materials imported for producing or processing export goods under contracts with foreign countries.

3. Settlement of tax when merging, consolidating, dividing, separating, dissolving, bankrupting, changing ownership form; transferring, selling, leasing, assigning state-owned enterprises, changing business sectors, and having excess special consumption tax already paid.

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

The refund of special consumption tax as stipulated in Clause 1 and 2 of this Article shall only be implemented for actually exported goods.

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

Article 13. Production and import establishments for goods and service businesses subject to special consumption tax are responsible for:

1. Implementing registration, declaration, payment, and settlement of taxes according to the regulations; they must declare fully and accurately using the prescribed tax declaration forms, tax settlement forms, and tax refund forms, and bear responsibility for the accuracy of their declarations, settlements, and refunds.

2. Adhering strictly to accounting systems, invoices, and documents when buying, selling goods and services and transporting goods subject to special consumption tax according to the law.

3. Providing all relevant documents, records, data, and bases related to tax calculation, payment, settlement, and requests for special consumption tax refunds to the Tax Authority.

Article 14. The Tax Authority has the following tasks, powers, and responsibilities:

1. Guiding taxpayers to implement registration, declaration, and payment of taxes according to the special consumption tax law.

2. Notifying the amount of tax payable to business establishments that have not declared sufficient tax and to households and individuals producing and trading goods and services subject to special consumption tax who have not fully implemented accounting systems and invoices; urging taxpayers to pay taxes within the prescribed deadlines; if taxpayers fail to pay taxes within the prescribed deadline, issuing notifications about the amount of tax payable and late payment penalties according to Clauses 2 and 3 of Article 17 of the Special Consumption Tax Law No. 05/1998/QH10 dated May 20, 1998; if taxpayers still fail to pay the full amount of tax and penalties, the Tax Authority may apply compulsory measures as stipulated in Clause 4 of Article 17 of the Special Consumption Tax Law No. 05/1998/QH10 dated May 20, 1998 to ensure full collection of tax and penalties; if these measures are ineffective, the Tax Authority shall transfer the case to the competent state agency for handling according to the law.

3. Inspecting and auditing taxpayers' declarations, payments, and settlements of taxes according to the law.

4. Handling administrative violations related to taxes and resolving tax complaints.

5. Requesting taxpayers to provide accounting books, invoices, documents, and other relevant records for 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. The determination of special consumption tax shall be carried out according to the following regulations:

1. The Tax Authority has the right to determine the amount of special consumption tax payable in the following cases:

a) Taxpayers do not comply with or comply inadequately with accounting systems, invoices, and documents;

b) Taxpayers do not declare or submit tax declaration forms beyond the prescribed deadline; or submit tax declaration forms but declare inaccurately the bases for determining the amount of special consumption tax;

c) Taxpayers refuse to present accounting books, invoices, documents, and necessary materials related to the calculation of special consumption tax;

d) Engaging in business without registration and failing to declare and pay taxes, which is discovered;

e) Declaring sales prices lower than 10% of market prices for goods and services used as the basis for calculating special consumption tax. The Ministry of Finance shall provide detailed guidance on determining market prices as the basis for determining special consumption tax.

2. The Tax Authority shall base its determination of the amount of tax payable on the investigation materials regarding the operational situation of production and business activities of the taxpayer, the market selling price of goods and services, or on the amount of tax payable by similar-scale production and business establishments in the same industry to set the amount of tax payable for cases stipulated in Clause 1 of this Article.

 Chapter IV
Reduction and Exemption of Special Consumption Tax

Article 16. The reduction and exemption of special consumption tax under Article 16 of the Special Consumption Tax Law are specified as follows:

1. Production establishments subject to special consumption tax that encounter difficulties due to natural disasters, enemy attacks, or unexpected accidents may be considered for tax reduction or exemption. The reduction and exemption shall be handled annually based on the year in which the damage occurred. The reduction level shall be determined based on the extent of damage caused by natural disasters, enemy attacks, or unexpected accidents but not exceeding 30% of the tax payable according to the law. In cases where severe damage occurs, making it impossible to continue production, business operations, and tax payment, the establishment may be considered for exemption from special consumption tax.

2. Production and assembly establishments of automobiles may have their taxes reduced above the tax rate specified in the Special Consumption Tax Tariff as provided in this Decree as follows:

a) In 2004, reduce by 70%;

b) In 2005, reduce by 50%;

c) In 2006, reduce by 30%;

d) From 2007 onwards, pay at the prescribed tax rate.

The Ministry of Finance shall provide guidance on procedures, processes, and authority for considering tax reductions and exemptions as stipulated in this Article.

Chapter V

Handling Violations and Awards

Article 17. Taxpayers, tax officials, and other individuals who violate the Special Consumption Tax Law shall be subject to penalties as provided in Articles 17 and 19 of the Special Consumption Tax Law No. 05/1998/QH10 dated May 20, 1998, depending on the nature and degree of violation. If the Special Consumption Tax Law does not specify specific penalty levels, such violations shall be handled according to the provisions of legal documents governing administrative violations in the field of taxation.

Article 18. Tax authorities, tax officials who complete assigned tasks well; organizations and individuals with achievements in implementing the Special Consumption Tax Law; taxpayers who fulfill their tax obligations properly shall be awarded according to the regulations of the Government.

Chapter VI
Implementation

Article 19. This Decree takes effect from January 1, 2004, and replaces Decree No. 84/1998/NĐ-CP dated October 12, 1998, of the Government detailing the implementation of the Special Consumption Tax Law.

Matters concerning the handling of existing issues and the resolution of violations related to special consumption tax before January 1, 2004, shall be carried out according to the corresponding provisions of the Special Consumption Tax Law and the relevant legal documents on special consumption tax in force at that time.

Article 20. Where international treaties to which the Socialist Republic of Vietnam is a party contain provisions different from those of the Special Consumption Tax Law, the special consumption tax shall be implemented according to the provisions of such international treaties.

Article 21. The organization of collection of special consumption tax is as follows:

1. The Tax Authority is responsible for organizing the collection of special consumption tax from production establishments subject to special consumption tax and service businesses subject to special consumption tax.

2. Customs Authorities are responsible for organizing the collection of special consumption tax from import establishments of goods subject to special consumption tax.

3. The Tax Authority and Customs Authorities shall cooperate in managing the collection of special consumption tax nationwide.

The Ministry of Finance shall specify in detail the organization of collection of special consumption tax as stipulated in this Article.

Article 22. The Ministry of Finance shall provide guidance on the implementation of this Decree;

Ministers, Heads of ministerial-level agencies, Heads of agencies attached to the Government, Chairmen of provincial People's Committees, and Chairmen of municipal People's Committees directly under the central government are responsible for implementing this Decree. /./