Circular No. 18/2005/TT-BTC amends and supplements certain points of Circular No. 119/2003/TT-BTC guiding the implementation of the Special Consumption Tax Decree. This document provides detailed regulations on taxable objects, tax settlement procedures, administrative violation handling, and tax rates applicable to certain types of goods.
Scope of application
Production and business establishments subject to special consumption tax; tax authorities; individuals and households producing and trading goods and services subject to special consumption tax have not fully implemented accounting systems and invoices.
Key points
- Production and processing establishments directly exporting products abroad (except passenger cars under 24 seats) must provide proof that the goods have actually been exported to be exempt from special consumption tax.
- Goods imported from abroad into export processing zones and export processing enterprises (except passenger cars under 24 seats) are not subject to special consumption tax according to regulations on non-collection and exemption of import duties.
- The tax base for special consumption tax on processed goods is determined based on the selling price excluding VAT of the entity sending the goods for processing.
- Vehicles used exclusively for amusement parks, entertainment, and sports facilities and not participating in road traffic as defined by the Road Traffic Law.
- Export businesses purchasing goods for export but failing to export and instead selling domestically must declare and pay special consumption tax within five days from the date of sale.
🌐 Social impact of this document
- Positive impact: Reducing the tax burden on production and processing enterprises exporting goods.
- Negative impact: Increasing costs for businesses required to declare and pay special consumption tax when selling goods domestically.
- Export processing enterprises benefit from the exemption of special consumption tax on passenger cars under 24 seats imported into export processing zones.
- Citizens may be affected by costs due to new regulations on declaration and payment of special consumption tax.
❓ Frequently asked questions
How do production and processing enterprises exporting goods abroad qualify for exemption from special consumption tax?
Production and processing enterprises exporting goods abroad (except passenger cars under 24 seats) must provide proof that the goods have actually been exported to be exempt from special consumption tax.
How is the tax base for special consumption tax on processed goods determined?
The tax base for special consumption tax on processed goods is the selling price excluding VAT of the entity sending the goods for processing, specifically calculated using the formula: Tax Base = Selling Price Excluding VAT / (1 + Special Consumption Tax Rate).
What must export businesses do if they purchase goods for export but fail to export and instead sell domestically?
Within five days from the date of sale, the business must declare and pay special consumption tax on behalf of the producer. The tax base is the selling price excluding VAT of the exporting entity.
How must production and business establishments settle special consumption tax?
Production establishments and businesses subject to special consumption tax must annually settle special consumption tax with the tax authority. The deadline for submitting the tax settlement report is no later than 60 days from December 31 of the tax settlement year.
What penalties will production and business establishments face for late tax payments?
In cases where production and business establishments delay tax payments, measures to handle administrative tax violations will be applied, or the competent authority will be requested to apply the provisions of Clause 4, Article 17 of the Special Consumption Tax Law to ensure full collection of taxes and fines.
Full text
CIRCULAR
Amending and supplementing some points of Circular No. 119/2003/TT-BTC
dated December 12, 2003 of the Ministry of Finance guiding the implementation of Decree No. 149/2003/NĐ-CP dated December 4, 2003 of the Government detailing the implementation of the Special Consumption Tax Law and the Law amending and supplementing certain articles of the Special Consumption Tax Law
Pursuant to the Special Consumption Tax Law No. 05/1998/QH10 dated May 20, 1998;
Pursuant to the Law amending and supplementing certain articles of the Special Consumption Tax Law No. 08/2003/QH11 dated June 17, 2003;
Pursuant to Decree No. 149/2003/NĐ-CP dated December 4, 2003 of the Government detailing the implementation of the Special Consumption Tax Law and the Law amending and supplementing certain articles of the Special Consumption Tax Law (Special Consumption Tax);
Pursuant to Circular No. 1287/VPCP-KTTH dated March 19, 2004 of the Government Office correcting the deadline for businesses to settle final special consumption tax and Circular No. 227/VPCP-KTTH dated January 14, 2005 of the Government Office announcing the Prime Minister's opinion on special consumption tax for imported cars under 24 seats into export processing zones;
The Ministry of Finance guides the amendment and supplementation of some points in Circular No. 119/2003/TT-BTC dated December 12, 2003 of the Ministry of Finance guiding the implementation of Decree No. 149/2003/NĐ-CP dated December 4, 2003 of the Government as follows:
Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;
1. Amending and supplementing Section II, Part A as follows:
1.1 Amending Point 1, Section II, Part A to become new Point 1 as follows:
- "1. Goods produced and processed directly for export abroad including goods sold or processed for export processing enterprises, except cars under 24 seats sold to export processing enterprises.
Enterprises with goods subject to exemption from special consumption tax as stipulated in this point must have documentation proving that the goods have actually been exported, specifically as follows:
- Sales contract or processing contract for foreign countries.
- Export sales invoice or payment receipt for processing fees.
- Export declaration form confirmed by customs authorities regarding the exported goods.
- Bank payment vouchers.
Enterprises producing goods subject to special consumption tax if temporarily exporting and re-importing according to temporary export and re-import permits within the period exempted from export tax and import tax according to regulations shall not be required to pay special consumption tax upon re-importation, but when the enterprise sells these goods, it must pay special consumption tax."
1.2 Amending Point 8, Section II, Part A to become new Point 8 as follows:
"8. Goods imported from abroad into export processing zones and export processing enterprises, except cars under 24 seats.
Procedures, authority, and documents for non-collection of special consumption tax for cases specified in Points 4, 5, 6, 7, and 8 above shall be implemented as provided for in the regulations on non-collection and exemption of import tax according to the Law on Export Tax and Import Tax."
1.3 Supplementing new Point 10 at the end of Section II, Part A as follows:
"10. Passenger vehicles exclusively used in amusement parks, entertainment, and sports areas that do not participate in road traffic as defined by the Road Traffic Law."
2. Amending Point 3, Section I, Part B to become new Point 3 as follows:
"3. For processed goods: The taxable value for special consumption tax is the selling price excluding special consumption tax and value-added tax (VAT) of the enterprise sending for processing, determined specifically as follows:
Taxable value for special consumption tax on processed goods
1 + Special consumption tax rate”
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3. Supplementing new Point 5 at the end of Section II, Part B as follows: |
= |
Selling price without value added tax of the unit sending for processing |
|
5- A tax rate of 25% applies to passenger cars from 16 to under 24 seats (including vehicles designed for both passengers and cargo and various types of trucks)." |
4. Amending and supplementing Point 2d, Section I, Part C to become new Point 2d as follows:
""Businesses exporting goods purchased for export but not exported and instead sold domestically must declare and pay the full special consumption tax within five days from the date of sale on behalf of the production enterprise. The taxable value for special consumption tax in this case is the selling price excluding special consumption tax and VAT, determined specifically as follows:
Taxable value
Special consumption tax
|
Domestic selling price of the exporting business excluding VAT In case the exporting business declares a selling price (including VAT and special consumption tax) lower than 10% of the market price, the tax authority will determine the taxable value for special consumption tax according to Point 8d, Part D of Circular No. 119/2003/TT-BTC." |
= |
5. Amending Point 5a, Section I, Part C to become new Point 5a as follows: |
|
5- A tax rate of 25% applies to passenger cars from 16 to under 24 seats (including vehicles designed for both passengers and cargo and various types of trucks)." |
Final settlement of special consumption tax:
Production enterprises and service providers subject to special consumption tax must settle their special consumption tax annually with the tax authority. They must declare all items related to the tax payable, paid, and outstanding up to the settlement date on the tax settlement form (Form No. 05/TTĐB issued together with this circular) and submit it to the tax authority within the prescribed time limit. The tax settlement year is based on the Gregorian calendar; however, if a business uses a different financial year, they still must settle the special consumption tax according to the Gregorian calendar. The latest deadline for production and business enterprises to settle the tax is no later than
"5sixty
days from December 31 of the tax settlement year.
If a production enterprise sells goods through branches or subsidiaries located in different regions from the place of production, the tax settlement should be based on the actual sales revenue of the branches and dependent units. Both the processing enterprise and the receiving enterprise must settle the special consumption tax with the tax authority where the production and business take place. Production and business enterprises must pay any outstanding special consumption tax to the state budget no later than ten days from the date of submitting the tax settlement report; if there is an overpayment, it can be offset against the next period's tax liability or refunded according to regulations."
6) Amending and supplementing Point 2, Part D as follows:
"2. Notification of tax, late payment notification, penalty, and violation handling:"
The production and business establishments must pay the outstanding value-added tax into the state budget no later than 10 days from the date of submitting the final tax settlement report; if they have overpaid, it shall be deducted from their tax liability for the next period or refunded according to regulations.
6) Supplement and amend Point 2, Part D as follows:
"2. Tax notification, late payment notification, fine payment, and violation handling:"
2.1. Notify the amount of tax due for individuals and households producing and trading goods and services subject to special consumption tax who have not fully implemented accounting systems and invoices; urge taxpayers to pay taxes within the prescribed deadlines. The tax payment notification must be sent to the taxpayer three days prior to the payment date specified on the notification (in accordance with Notification Form No. 03/TTĐB issued together with Circular No. 119/2003/TT-BTC dated December 12, 2003 of the Ministry of Finance). The latest deadline for tax payment is the last day of the month.
2.2. Notify and urge businesses that have not submitted tax declarations and final settlement reports for special consumption tax within the prescribed deadlines.
2.3. Notify the amount of overdue tax and late payment penalties as stipulated in Clause 2 and Clause 3 of Article 17 of the Special Consumption Tax Law.
2.4. The deadline for calculating monthly late payment penalties for taxpayers is calculated as follows:
- Starting from the 26th day of the following month for production and business establishments.
- Starting from the first day of the following month for individual households engaged in production and trading of goods and services who have not fully implemented accounting systems and invoices.
- Starting from the day following the prescribed tax payment date under the Export Tax Law and Import Tax Law for imported goods.
2.5. Apply administrative violation handling measures regarding taxes or propose competent authorities to apply measures stipulated in Clause 4 of Article 17 of the Special Consumption Tax Law to ensure full collection of taxes and penalties. In cases where administrative measures have been taken but the production and business establishment still fails to pay the full amount of tax and penalties, the tax authority shall transfer the case file to competent authorities for handling in accordance with the law.
This Circular takes effect fifteen days after its publication in the Official Gazette. Provisions in Circular No. 119/2003/TT-BTC dated December 12, 2003 of the Ministry of Finance which are not amended or supplemented in this Circular remain in force. During implementation, if there are any difficulties, organizations and individuals are requested to promptly report them to the Ministry of Finance for study and resolution./.
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