Is the liquor with an alcohol content of 20% or higher subject to excise tax in Vietnam?

Is the liquor with an alcohol content of 20% or higher subject to excise tax in Vietnam?

Pursuant to the provisions in Article 2 of the Law on excise tax 2008 amended by Clause 1, Article 1 of the Amended Law on excise tax 2014 regarding the subjects liable to excise tax as follows:

Subjects liable to tax

1. Goods:

a) Cigarettes, cigars, and other preparations from tobacco used for smoking, inhalation, chewing, sniffing, sucking;

b) liquor;

c) Beer;

d) Passenger cars of less than 24 seats, including those designed to carry both people and goods with two or more rows of seats and having a fixed partition between the passenger compartment and the goods compartment;

đ) Motorbikes with an engine capacity of over 125cm3;

e) Aircraft, yachts;

g) Various gasoline types;

h) Air conditioners with a capacity of 90,000 BTU or less;

i) Playing cards;

k) Decorative paper, ritual paper items.

2. Services:

a) Business of nightclubs;

b) Business of massage, karaoke;

c) Business of casinos; electronic games with prizes including games by jackpot machines, slot machines, and similar types;

d) Business of betting;

dd) Business of golf including selling membership cards, golf tickets;

e) Lottery business.

Therefore, liquor (with an alcohol content of 20% or higher) is one of the goods subject to excise tax.

What is the excise tax rate for the business of liquor with an alcohol content of 20% or higher in Vietnam?

Pursuant to the provisions at Point a, Clause 2, Section I of the excise tax tariff stipulated in Article 7 of the Law on excise tax 2008 (amended by Clause 4, Article 1 of the Amended Law on excise tax 2014), the excise tax rate for business involving liquor with an alcohol content of 20% or higher is determined as follows:

+ From January 1, 2016, to December 31, 2016: 55%

+ From January 1, 2017, to December 31, 2017: 60%

+ From January 1, 2018: 65%

Thus, from January 1, 2018, the excise tax rate for the business of liquor with an alcohol content of 20% or higher is 65%.

What is the excise tax rate for the business of liquor with an alcohol content of 20% or higher in Vietnam? (Image from Internet)

How is the excise tax calculated for the business of liquor with an alcohol content of 20% or higher in Vietnam?

The excise tax calculation for the business of liquor with an alcohol content of 20% or higher is determined according to the following formula in Article 5 of the Law on excise tax 2008:

Where:

+ excise tax Rate: 65%

+ The taxable price for special consumption is determined according to Article 6 of the Law on excise tax 2008 (amended by Clause 3, Article 1 of the Amended Law on excise tax 2014, Clause 1, Article 2 of the Amended Law on Value-Added Tax, excise tax, and Tax Administration 2016 and the regulation on exchange rates for determining the taxable price is abolished by Point d, Clause 2, Article 6 of the Amended Law on excise tax 2014) as follows:

The taxable price for special consumption for goods is the price of providing services excluding excise tax, environmental protection tax, and value-added tax, as stipulated as follows:

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

In the case of goods subject to excise tax being sold to a commercial business facility which is related to the parent company, subsidiary company, or subsidiaries in the same parent company with the production facility, import facility or the commercial business facility with an affiliate relationship, the taxable price for special consumption must not be lower than the percentage (%) compared to the average selling price of commercial business facilities purchasing directly from the production facility, import facility as prescribed by the Government of Vietnam;

(ii) For imported goods at the importation stage, this is the import duty taxable price plus import duty.

+ In cases where imported goods are exempted or reduced from import duty, the taxable price does not include the exempted or reduced import duty.

+ Imported goods subject to excise tax can be credited with the excise tax paid at the importation stage when determining the excise tax payable for sale;

(iii) For processed goods, this is the taxable price of goods sold by the processing facility or the selling price of similar or equivalent products at the time of sale;

(iv) For goods sold by installment or deferred payment method, this is the selling price under the lump sum payment method excluding installment interest or deferred payment interest;

(v) For goods used for exchange or internal consumption, gifting, the taxable price for special consumption is the price of similar or equivalent goods at the time these activities occur.

Note:

+ The taxable price for special consumption for goods includes any additional amounts collected (if any) that the business entity 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 based on the average exchange rate on the interbank foreign exchange market announced by the State Bank of Vietnam at the time revenue is generated to determine the taxable price.