Decree No. 97/CP provides detailed regulations for the implementation of the Special Consumption Tax Law and laws amending and supplementing certain articles of the Special Consumption Tax Law.

DECREE OF THE GOVERNMENT

Detailed Implementation Rules for the Special Consumption Tax Law

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

THE GOVERNMENT

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

Pursuant to the Special Consumption Tax Law adopted by the National Assembly of the Socialist Republic of Vietnam at its Eighth Session on June 30, 1990; the Law Amending and Supplementing Certain Provisions of the Special Consumption Tax Law adopted by the National Assembly of the Socialist Republic of Vietnam at its Ninth Session on July 5, 1993; and the Law Amending and Supplementing Certain Provisions of the Special Consumption Tax Law adopted by the National Assembly of the Socialist Republic of Vietnam at its Ninth Session on October 28, 1995;

At the proposal of the Minister of Finance,

DECREE:

PART I

SCOPE OF APPLICATION OF THE SPECIAL CONSUMPTION TAX

Article 1. Organizations and individuals belonging to various economic sectors (hereinafter referred to collectively as the entity) that produce or import goods subject to special consumption tax are liable taxpayers for such tax.

Article 2. Each item subject to special consumption tax shall only be taxed once. This principle is applied as follows:

1. Entities producing goods subject to special consumption tax when selling these goods only have to pay special consumption tax without having to pay production turnover tax. In cases where the production entity has branches or stores for product sales, they pay special consumption tax at the place of production and pay turnover tax according to commercial business activities at the branches or stores where the products are sold.

When entities pay special consumption tax, they can deduct the amount of special consumption tax already paid at the previous stage (if applicable).

2. Entities importing goods subject to special consumption tax must pay special consumption tax upon importation and pay turnover tax when selling the goods.

Article 3. Goods subject to special consumption tax are exempt from this tax in the following cases:

1. Goods produced directly exported by the entity or processed for foreign countries.

2. Goods sold or entrusted by the production entity to trading entities for direct export under economic contracts and export permits.

If a trading entity purchases goods subject to special consumption tax from a production entity for export but does not export them and instead sells them domestically, in addition to paying turnover tax according to commercial business activities, they must also pay special consumption tax.

3. Non-repayable aid goods.

4. Goods imported subject to special consumption tax by organizations and individuals from abroad who enjoy exemption standards specified by the Government in accordance with international treaties to which Vietnam is a party.

5. Goods subject to special consumption tax undergoing transshipment, transit, or using Vietnamese border gates based on agreements signed between two Governments or departments and localities approved by the Prime Minister and having completed customs procedures.

6. Goods temporarily imported for re-export (including goods for trade fairs), if actually re-exported within the prescribed period (30 days), are exempt from special consumption tax corresponding to the quantity actually re-exported. If beyond this period, they must pay special consumption tax on the unsold portion and will be refunded the special consumption tax corresponding to the quantity actually re-exported.

7. Raw materials and components imported subject to special consumption tax for the production of export goods, if there is actual export within the tax payment period (90 days), are exempt from special consumption tax on the imported raw materials and components corresponding to the actual quantity exported. If beyond this period, they must pay special consumption tax. When there is actual export, the special consumption tax paid on the imported raw materials and components corresponding to the actual quantity exported will be refunded.

Raw materials and components imported for processing for foreign countries are exempt from tax.

8. Personal effects carried within the limit allowed for entry and exit as stipulated by the Government.

For imported goods, special consumption tax is only levied on the actual imported goods. If declared quantities exceed the actual imported goods, the excess will be refunded the special consumption tax paid.

Other cases not listed above that are required to pay special consumption tax upon importation shall be specifically guided by the Ministry of Finance.

PART II

BASIS FOR CALCULATING TAX AND SPECIAL CONSUMPTION TAX SCHEDULE

Article 4. The basis for calculating special consumption tax on goods subject to special consumption tax includes the quantity of goods, the unit price of taxable goods, and the tax rate.

Article 5. The quantity of goods subject to special consumption tax is defined as follows:

1. For domestically produced goods, it is the quantity and weight of goods consumed, including the quantity and weight of goods subject to special consumption tax sold, exchanged, given as gifts, or used internally by the entity.

2. For imported goods, it is the quantity and weight recorded in the import declaration of organizations and individuals importing goods.

Article 6. The basis for calculating special consumption tax:

1. The basis for calculating special consumption tax on domestically produced goods is the price at which the entity producing goods subject to special consumption tax sells them at the place of production before special consumption tax is applied.

For processed goods, gift items, and internal consumption goods, the basis for calculating special consumption tax is the taxable price of similar or equivalent goods.

For entities that pay taxes based on a quota of goods produced and consumed, the provincial tax authority bases the sale price and taxable price on market prices.

2. The basis for calculating special consumption tax on imported goods is the customs value plus (+) import duty. For imported goods exempted or reduced from import duty, the basis for calculating special consumption tax still includes the full import duty factor.

Article 7. Goods subject to special consumption tax and the rates of special consumption tax are implemented according to the following schedule:

1. Filtered cigarettes produced mainly from imported raw materials are those using imported tobacco strands at a rate of 51% or more compared to the total amount of tobacco strands required for the product.

2. The special consumption tax applies to alcohol, beer, fireworks (excluding explosive fireworks), and gasoline, including both domestically produced and imported items.

3. Medicinal alcohol subject to a 15% special consumption tax must be registered as a product and have a business operation permit issued by the Ministry of Health. If these conditions are not met, the special consumption tax will be paid according to the tax rate applicable to alcohol of similar strength.

4. Imported automobiles and other types of vehicles (whole units and SKD form) subject to special consumption tax fall within the category of goods coded 8703 under the current import tariff schedule.

The Ministry of Finance shall coordinate with relevant sectors to detail specific items subject to special consumption tax under the category of "various types of gasoline, naphtha, reformulated products, and other additives used to blend gasoline."

CHAPTER III

REGISTRATION, DECLARATION AND PAYMENT OF TAX AND TRANSPORTATION OF GOODS

Article 8. Production and import enterprises subject to special consumption tax must declare registration with the tax authority regarding capital, labor, products, and production and business locations no later than five days before commencing operations, merging, splitting, or changing locations. In cases of dissolution or change in business activities, they must report to the tax authority no later than five days before dissolution or change in business activities.

Article 9. Enterprises producing and importing goods subject to special consumption tax must declare and pay taxes according to the following regulations:

1. For domestically produced goods subject to special consumption tax, the enterprise must declare and submit the consolidated special consumption tax declaration for the previous month to the tax authority within the first five days of the following month and pay any outstanding tax as notified by the tax authority.

Even if there is no special consumption tax due, the enterprise must still submit the consolidated special consumption tax declaration to the tax authority as required.

2. For imported goods, the time of declaration and calculation of special consumption tax is the date of declaration of the import goods declaration form. Within eight hours of registering the import goods declaration form, the tax collection agency officially notifies the taxpayer of the amount of tax due.

Article 10. Enterprises producing and importing goods must strictly adhere to accounting records, invoices, and supporting documents according to current regulations.

When the tax collection agency requests information, data, and bases related to tax inspection and audit, the enterprise has the duty to:

1. Provide complete and timely documentation, data, and bases related to the calculation of special consumption tax.

2. Explain and substantiate unclear items in the tax declaration, accounting books, and accounting vouchers.

Enterprises may not refuse to present, provide, or explain documents requested by the tax authority on grounds of professional confidentiality or other reasons.

The tax collection agency must keep confidential any documents provided by the enterprise.

Article 11. Special consumption tax is paid by the enterprise producing or importing goods. For imported goods, the place of payment is where the import procedures are handled; for domestically produced goods, it is where the enterprise directly produces such goods. In cases of small-scale dispersed production, the special consumption tax may be paid by purchasing organizations or individuals on behalf of producers according to guidelines issued by the Ministry of Finance.

Article 12. Payment of special consumption tax is regulated as follows:

1. Enterprises with significant tax liabilities must declare and pay special consumption tax when selling goods or returning processed goods, as notified by the tax authority. Tax authority staff regularly inspect and urge enterprises to promptly pay taxes into the State budget.

If goods are exported without receiving payment, the deadline for tax payment is the day payment is received, but no later than fifteen days from the date of issuance of the tax notification.

For small enterprises, based on allocated quantities of goods produced and consumed, special consumption tax is paid periodically on the tenth, twentieth, and last day of each month as notified by the tax authority.

If special consumption tax is collected by purchasing organizations, the purchasing organization must declare to the tax authority where the purchase was made and pay the special consumption tax for each batch of purchased goods or each shipment before transportation. The taxable value in this case is the purchase price at the place of purchase, excluding special consumption tax.

2. Import enterprises must pay special consumption tax according to the tax notification from the tax collection agency, but no later than thirty days from the date of receipt of the tax notification.

Special consumption tax on non-commercial imports and border trade imports must be paid immediately upon importation into Vietnam. The tax collection agency must issue a receipt when collecting tax in this case.

Article 13.

1. Domestic products subject to special consumption tax must have a tax payment receipt or a sales invoice registered with the tax authority during transportation.

2. Imported goods subject to special consumption tax must have a tax payment receipt or a special consumption tax payment notification attached to the import goods declaration form, which has been inspected and confirmed by the tax authority during transportation.

Article 14. The Ministry of Finance issues and manages various tax documents and declarations for special consumption tax.

PART IV

REDUCTION AND EXEMPTION OF SPECIAL CONSUMPTION TAX

Article 15. Reductions and exemptions from special consumption tax are regulated as follows:

1. Production facilities producing goods subject to special consumption tax that encounter difficulties due to natural disasters, enemy activities, or unexpected accidents shall be eligible for a reduction in the special consumption tax. The amount of reduction shall be calculated based on the percentage of asset damage, but not exceeding 50% of the tax payable and the reduced tax amount shall not exceed 30% of the value of damaged assets. The period of tax reduction shall not exceed 180 days from the date of damage occurrence and shipment.

2. Newly established production facilities or production facilities expanding operations and applying new production technologies, if they incur losses after paying the special consumption tax, shall be eligible for a tax reduction on an annual basis.

The tax reduction amount corresponds to the loss of each year (based on the Gregorian calendar), but shall not exceed 30% (thirty percent) of the tax payable for that year. The period for considering the tax reduction shall not exceed two years (24 months).

A newly established production facility is a new facility that has been invested in and constructed, and has been granted a production permit. Previously established facilities that have since been split, merged, renamed, dissolved, and then re-established do not qualify for tax reduction under this provision.

In cases where tax reductions are granted for production expansion or application of new technology, such reductions shall only apply to additional goods produced compared to previous production levels.

3. For small-scale production facilities, if their ability to pay the prescribed tax level is insufficient, the Ministry of Finance shall base its decision on the business situation, market prices, and determine the specific amount and duration of tax exemption or reduction for each case.

4. Other cases of tax exemption or reduction shall be decided by the Ministry of Finance upon submission to the Government for each specific case.

The Ministry of Finance shall stipulate procedures for declaring tax exemptions and reductions and establish procedures and authority for reviewing tax exemptions and reductions as provided in Clause 1, 2, and 3 of this Article.

CHAPTER V

FINAL PROVISIONS

Article 16. The Government shall issue separate regulations regarding reward systems for organizations and individuals who contribute to the implementation of the Special Consumption Tax Law and penalty systems for organizations and individuals who violate the Special Consumption Tax Law.

Article 17. This Decree takes effect from January 1, 1996, replacing Decree No. 56/CP dated August 28, 1993, issued by the Government detailing the implementation of the Special Consumption Tax Law and the Law Amending and Supplementing Certain Provisions of the Special Consumption Tax Law.

Any previous provisions concerning special consumption tax that conflict with the provisions of this Decree shall be abolished.

Article 18. The Minister of Finance shall guide the implementation of this Decree.

The Ministry of Finance authorizes the General Customs Department to organize the collection of special consumption tax on imported goods concurrently with the collection of import taxes.

The Ministers, Heads of ministries equivalent to ministries, agencies under the Government, and Chairmen of the People's Committees of provinces and centrally governed cities shall be responsible for implementing this Decree./.