Decree No. 84/1998/ND-CP detailing the implementation of the Special Consumption Tax Law

DECREE OF THE GOVERNMENT
Regulations for the Implementation of the Special Consumption Tax Law

THE GOVERNMENT

Pursuant to the Law on the Organization of the Government dated September 30, 1992;

Based on the Special Consumption Tax Law No. 05/1998-QH10 dated May 20, 1998;

At the proposal of the Minister of Finance,

DECREE:

PART I
SCOPE OF APPLICATION OF THE 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;

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. The taxpayers of the special consumption tax are organizations and individuals (collectively referred to as establishments) that engage in production, importation of goods, and provision of services subject to the special consumption tax as specified in Article 1 of this Decree.

Establishments producing goods subject to the special consumption tax only need to pay the special consumption tax on these goods at the production stage.

Establishments importing goods subject to the special consumption tax must pay the special consumption tax on these goods at the importation stage.

Establishments providing services subject to the special consumption tax must pay the special consumption tax on the taxable services provided to consumers.

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

1. Goods produced, processed directly for export abroad; or sold, entrusted to export enterprises for export;

In the case where an export enterprise purchases goods subject to the special consumption tax from a production establishment for export but does not export them and instead sells them domestically, the export enterprise must pay the full special consumption tax on behalf of the production establishment and must also pay the value-added tax at the trading stage.

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 gifts must be within the limits prescribed by the Government;

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

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

b) Transit goods passing through Vietnam under the following forms:

Goods shipped directly from the exporting port to the importing port without transiting through Vietnam;

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

Goods placed in bonded warehouses and then transferred to another country without undergoing customs clearance procedures for importation into Vietnam according to the bonded warehouse regulations;

Goods in transit or passing through Vietnamese border crossings based on agreements signed between the two governments or sectors and localities approved by the Prime Minister;

c) Temporarily imported goods for re-export and temporarily exported goods for re-import within the period exempted from export and import duties as prescribed by 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.

Establishments importing goods exempt from the special consumption tax as specified in Clause 2 of this Article, if used for other purposes, must declare and pay the special consumption tax within three days from the date of use for other purposes.

PART II
BASIS FOR TAXATION AND TAX RATE

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 basis for calculating the special consumption tax as specified in Article 6 of the Special Consumption Tax Law is detailed as follows:

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.

For bottled alcohol, the basis for calculating the special consumption tax does not include the bottle.

2. For imported goods, it is the price for calculating import duties plus import duties. If imported goods are exempted or reduced from import duties, the basis for calculating the tax does not include the portion of import duties exempted or reduced.

3. For processed goods, it is the price for calculating taxes of similar or equivalent goods produced at the same time. If there is no price for similar or equivalent products, the tax authority will determine the basis for calculating the tax based on market prices.

4. For goods sold on installment payment terms, it is the price of the goods sold without the special consumption tax when sold in a lump sum payment (excluding the installment interest).

5. For services, it is the price of providing services without the special consumption tax.

The price of providing services serves as the basis for determining the price without the special consumption tax for certain activities as follows:

For golf operations, it is the price of selling membership cards and golf playing tickets.

For casino services, slot machine games, horse and motor racing betting ticket sales, it is the revenue from these activities minus the amount paid out as prizes to customers.

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

The basis for calculating the special consumption tax for goods and services specified in this Article includes additional amounts charged outside the sale price of goods and services that the establishment enjoys.

The Ministry of Finance shall provide specific guidance on determining the price without the special consumption tax as the basis for calculating the tax for goods and services subject to taxation as specified in this Article.

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

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. Filtered cigarettes produced mainly from imported materials are those cigarettes using imported tobacco strands accounting for 51% or more of the total tobacco strands used in the production of such products.

3. Medicinal alcohol items are 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 product quality issued by health authorities or competent authorities. For imported medicinal alcohol, it must be determined as medicinal alcohol by health authorities or competent authorities. If there are no sufficient documents as mentioned above, special consumption tax shall be paid at the rate applicable to alcoholic beverages with corresponding alcohol content.

4. Motor vehicles subject to a 30% tariff rate include: passenger cars with seating capacity from 16 to under 24 seats, vehicles designed to carry both passengers and goods equivalent to those with seating capacity from 16 to under 24 seats, and various types of pick-up trucks.

5. For goods subject to special consumption tax, excluding children's toys and goods used for decoration.

6. For goods subject to special consumption tax within the group "various types of gasoline, naphtha, reformate components, and other additives for gasoline blending," the Ministry of Finance shall coordinate with relevant sectors to specify specific goods.

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

Article 7. Production establishments and service businesses subject to special consumption tax must register for tax payment with the tax authority where the establishment is located in accordance with the regulations on tax registration and the 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 operations, the production and business establishment must report to the tax authority at least five days before such changes occur.

Article 8. Production establishments producing goods subject to special consumption tax that use brand labels must register the brand label model with the tax authority where the establishment is located no later than five days from the date of use. When changing the brand label, the establishment must report to the tax authority and register the new brand label model to replace the old one 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 establishments and service businesses 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 ten days at the beginning of the following month. For production and business establishments with large amounts of special consumption tax payable, they must declare special consumption tax periodically every five or ten days as prescribed by the tax authority.

In the case where no special consumption tax arises in a month, the production and business establishment 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. Production establishments 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 they provide valid documentation. The amount of special consumption tax deductible for raw materials shall not exceed the special consumption tax payable at the production stage.

4. Production and business establishments producing multiple types of goods and services subject to different rates of special consumption tax must declare special consumption tax separately for each specified rate for each type of goods and services. If the establishment cannot determine the tax rate for each type, then the highest tax rate among the goods and services produced and traded by the establishment shall apply.

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

Article 10. 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 payment notice but shall not be later than the twentieth day of the following month; for production and business establishments with large amounts of special consumption tax payable, they must pay the special consumption tax periodically every five or ten days according to the notice of the tax authority.

For individuals and households producing goods and trading services subject to special consumption tax far from state treasuries, the tax authority shall organize the collection of taxes and deposit them into the state budget. The tax authority must deposit the collected money into the state budget no later than three days from the date of receipt.

2. Import establishments importing goods subject to special consumption tax must pay the special consumption tax for each importation at the location of tax declaration. The notification period and tax payment deadline for imported goods shall be carried out according to the customs declaration and tax payment deadlines.

3. Special consumption tax paid into the state budget must be in Vietnamese Dong. In cases where production and business establishments buy and sell goods and services in foreign currency, they must convert the foreign currency into Vietnamese Dong based on the average exchange rate in the inter-bank foreign exchange market published by the State Bank at the time of generating sales volume 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. A production base for goods or a service business subject to special consumption tax must settle its financial accounts according to the state regulations and, based on such settlement, settle the annual special consumption tax with the tax authority. The tax settlement year follows the Gregorian calendar; however, if the business applies a different fiscal year, it still must settle the special consumption tax 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 pay any outstanding taxes to the state budget within ten days from submitting the report; if there is an overpayment, it can be deducted from the next period's tax liability or refunded according to Article 13 of the Special Consumption Tax Law and Article 12 of this Decree.

2. In cases of merger, consolidation, division, separation, dissolution, bankruptcy, or change in business activities, the base must settle the special consumption 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, or bankruptcy, and must pay any outstanding taxes to the state budget within ten days from submitting the report; if there is an overpayment, it can be deducted from the next period's tax liability or refunded according to Article 13 of the Special Consumption Tax Law and Article 12 of this Decree.

Article 12. Production bases and importers of goods subject to special consumption tax are entitled to a refund of the paid special consumption tax in the following cases:

1. Goods temporarily imported for re-export;

2. Imported raw materials for producing or processing export goods under contracts with foreign entities;

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.

Cases specified in Clause 1 and 2 of this Article are only eligible for a refund of the special consumption tax on goods actually exported.

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

Article 13. Production bases and importers of goods, and service businesses subject to special consumption tax are responsible for:

Registering, declaring, paying, and settling taxes according to the Law; they must declare fully and accurately using the prescribed tax declaration forms, tax settlement forms, and refund forms, and bear responsibility for the accuracy of their declarations, settlements, and refunds;

Adhering to accounting records, invoices, and other documents when purchasing, selling goods, services, and transporting goods subject to special consumption tax as stipulated by law;

Providing all relevant documents, data, and grounds 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 comply with registration, declaration, and payment regimes as prescribed by the Law;

2. Notifying taxpayers of the amount of tax due and the deadline for payment as prescribed; if the taxpayer fails to pay the tax within the notified deadline, further notifications regarding the tax due and late payment penalties will be issued according to Clause 2 and 3 of Article 17 of the Special Consumption Tax Law; if the taxpayer still does not pay the full amount of tax and penalties, the tax authority may apply the measures prescribed in Clause 4 of Article 17 of the Special Consumption Tax Law to ensure collection of the tax and penalties; if these measures fail, the case will be transferred to the competent state agency for handling according to the law;

3. Inspecting and auditing taxpayers' declarations and payments 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. The determination of special consumption tax is regulated as follows:

1. The tax authority has the right to determine the amount of special consumption tax payable by taxpayers in the following situations:

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

b) Failure to declare or submit the declaration form beyond the notified deadline; submission of a declaration form but incorrect declaration of the basis 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 tax payable on investigation materials about the taxpayer's production and business activities or on the tax payable by similar-sized enterprises in the same industry to determine the tax payable in the cases specified in Clause 1 of this Article.

PART IV
REDUCTION AND EXEMPTION OF SPECIAL CONSUMPTION TAX

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

1. Production bases 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 or exemption is handled annually based on the year of damage occurrence. The reduction level is determined based on the damage caused by natural disasters, enemy attacks, or unexpected accidents but not exceeding 30% of the tax payable according to the Law. If the damage is severe and the base cannot continue production, business operations, and tax payment, it may be considered for tax exemption.

2. Small beer production bases with a capacity of up to 10 million liters/year established and operating before January 1, 1999, which incur losses while paying taxes at the rate prescribed by the Special Consumption Tax Law, may be considered for tax reduction corresponding to the loss amount. The tax reduction period is annually calculated from January 1, 1999, but not exceeding five years.

3. For automobile assembly and production bases, the tax rate specified in the Special Consumption Tax Tariff is reduced by 95% for the first five years from January 1, 1999, to December 31, 2003.

After five years of applying tax reduction as provided above, if the automobile assembly and production facility incurs losses, it may be considered for an additional tax reduction of one to five more years. The level of tax reduction shall be specifically prescribed by the Government in accordance with actual circumstances.

4. Golf business establishments shall be granted a 30% reduction in the special consumption tax rate as stipulated in Article 7 of the Special Consumption Tax Law for a period of three years from the date the Special Consumption Tax Law comes into effect.

5. Other cases of exemption or reduction shall be decided by the Government upon the Ministry of Finance's proposal for each specific case in accordance with the law.

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

CHAPTER V
VIOLATION HANDLING AND REWARD

Article 17. Taxpayers, tax officials, and other individuals who violate the Special Consumption Tax Law shall be subject to penalties as specified in Articles 17 and 19 of the Special Consumption Tax Law, depending on the nature and degree of violation. In cases where the Special Consumption Tax Law does not specify a particular penalty, the provisions of other legal documents governing administrative violations related to taxes shall apply.

Article 18. Tax authorities and tax officials who successfully complete their assigned tasks; organizations and individuals who achieve results in implementing the Special Consumption Tax Law; taxpayers who fulfill their tax obligations well shall be rewarded according to the Government's regulations.

Chapter VI
IMPLEMENTATION

Article 19. This Decree takes effect from January 1, 1999. Decree No. 97/CP dated December 27, 1995, and other provisions regarding special consumption tax in other regulatory legal documents shall be abolished from the date this Decree takes effect.

Matters concerning outstanding taxes, finalization of tax returns, tax exemptions, tax reductions, tax benefits, and handling of violations of the special consumption tax before January 1, 1999, shall be resolved in accordance with the corresponding provisions of the Special Consumption Tax Law, laws amending and supplementing certain articles of the Special Consumption Tax Law, and other provisions on special consumption tax in legal documents effective at that time.

Article 20. Where an international treaty to which the Socialist Republic of Vietnam is a party provides different provisions than those in the Special Consumption Tax Law, the special consumption tax shall be implemented in accordance with the provisions of that international treaty.

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

1. The General Department of Taxation shall be responsible for organizing the collection of special consumption tax from establishments producing taxable goods and providing taxable services.

2. The General Department of Customs shall be responsible for organizing the collection of special consumption tax from establishments importing taxable goods.

3. The General Department of Taxation and the General Department of Customs shall have the responsibility to coordinate in managing the collection of special consumption tax nationwide.

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

Article 22. The Minister of Finance shall guide the implementation of this Decree.

Ministers, Heads of ministerial-level agencies, Heads of agencies under the Government, Chairpersons of People's Committees of provinces and centrally governed cities are responsible for enforcing this Decree./.