Are yachts subject to excise tax in Vietnam?

Are yachts subject to excise tax in Vietnam?

Pursuant to the provisions of Article 2 of Decree 108/2015/ND-CP guiding the Law on Excise Tax 2008 and the Law on Amendments to Law on Excise Tax 2014 regarding the subjects of excise tax as follows:

Taxable objects

1. Objects subject to excise tax shall be implemented according to the provisions of Article 2 of the Law on Excise Tax and Clause 1, Article 1 of the Law amending and supplementing a number of articles of the Law on Excise Tax.

a) For aircraft and yachts specified at Point e, Clause 1, Article 2 of the Law on Excise Tax, they are the type used for civilian purposes.

b) For votive items specified at Point k, Clause 1, Article 2 of the Law on Excise Tax, it does not include votive items as children's toys, teaching tools.

c) For betting business specified at Point d, Clause 2, Article 2 of the Law on Excise Tax, including: Sports betting, entertainment, and other forms of betting as regulated by law.

2. Objects subject to excise tax for goods specified in Clause 1, Article 2 of the Law on Excise Tax are complete goods products, excluding component kits for assembling these goods.

Based on the above regulations, yachts are among the types of goods subject to excise tax.

Is buying a yacht subject to excise tax in Vietnam? (Image from the Internet)

What is the excise tax rate for buying a yacht in Vietnam?

Pursuant to the provisions of Article 4 of the Law on Excise Tax 2008 regarding those liable for excise tax as follows:

- Those liable for excise tax are organizations, individuals producing, importing goods, and trading services subject to excise tax.

- In cases where organizations, individuals engage in export business, purchasing goods subject to excise tax from production facilities for export but do not export and instead consume domestically, then those organizations, individuals engaged in export business are liable for excise tax.

Accordingly, only organizations, individuals engaged in export business who buy yachts from other production facilities for export but do not export and consume domestically, then those organizations, individuals will have to pay excise tax.

How to determine taxable price of excise tax for yachts in Vietnam?

The taxable price of excise tax for yachts is determined in Article 6 of the Law on Excise Tax 2008 (amended by Clause 3, Article 1 of the Law on Amendments to Law on Excise Tax 2014, Clause 1, Article 2 of the Amended Value-Added Tax Law, Law on Amendments to Law on Excise Tax, and Tax Administration Law 2016 and the provision on exchange rates in determining taxable price was abolished by Point d, Clause 2, Article 6 of the Law on Amendments to Law on Excise Tax 2014) as follows:

The taxable price of excise tax for yachts is the service provision price not yet including excise tax, not yet including environmental protection tax, and not yet including value-added tax as regulated:

(i) For domestically produced yachts, imported yachts, it is the price at which the production facility, import facility sells.

In cases where yachts subject to excise tax are sold to commercial business establishments being a parent company, subsidiary company, or subsidiary companies within the same parent company with the production facility, import facility, or commercial business establishment being an associated enterprise, the excise tax price must not be lower than a certain percentage (%) compared to the average price at which commercial business establishments buy directly from the production facility, import facility for sale as regulated by the Government of Vietnam;

(ii) For imported yachts at the importation stage, it is the import price plus import tax.

+ In cases where imported yachts are exempted or reduced from import tax, the taxable price does not include the exempted, reduced import tax amount.

+ Yachts subject to excise tax imported are deducted the excise tax already paid at the import stage when determining the excise tax amount payable for reselling;

(iii) For processed yachts, the taxable price is the selling price of yachts of the processing consignor or the selling price of similar or equivalent products at the same time of sale;

(iv) For yachts sold on an installment, deferred payment basis, it is the selling price according to the one-time payment method for that product excluding installment interest, deferred interest;

(v) For yachts used for exchange, internal consumption, donation, gifting, the excise tax price is that of similar or equivalent yachts at the time these activities arise.

Note:

+ The taxable price of excise tax for yachts includes any additional charges collected (if any) that the business establishment is entitled to.

+ The taxable price is calculated in Vietnamese Dong. In cases where the taxpayer has revenue in foreign currency, it must be converted into Vietnamese Dong according to the average interbank foreign currency market exchange rate announced by the State Bank of Vietnam at the time revenue arises to determine the taxable price.