What are the regulations on the excise-taxable prices of goods and services in Vietnam?

What are the regulations on the excise-taxable prices of goods and services in Vietnam?

According to Article 6 of the Law on excise tax 2008, with certain provisions amended by Clauses 3 of Article 1 of the Law on Amendments to the Law on excise tax 2014 and Clause 1 of Article 2 of the Law on Amendments to Law on Value-Added Tax, Law on excise tax and Law on Tax Administration 2016, taxable prices of goods/services are selling prices of goods services exclusive of excise tax, environmental protection tax, and VAT, and are prescribed as follows:

- Taxable prices of goods domestically produced and imports are selling prices imposed by manufacturers or importers.

Where goods subject to excise tax are sold to a trading establishment which has a parent company-subsidiary company relationship or subsidiaries in the same parent company as the manufacturer or importer, or a trading establishment has an association therewith, the taxable price must not fall below the percentage (%) of average price paid by the trading establishments directly buying from the manufacturers or importers prescribed by the Government;

- Taxable prices of imports at importation are the prices subject to import duty plus (+) import duty. If imports are eligible for exemption or reduction of import duty, taxable price shall not include the reduction or exemption. excise tax on goods that was paid at importation may be deducted when determining the excise tax on goods when they are sold;"

- For processed goods, it is the taxed price of the goods sold by processing-ordering establishment or the selling price of the product of the same or similar kind at the same time with the time of goods sale;

- For goods sold on installment or deferred payment, it is the one-off selling price of such goods, exclusive of the installment or deferred payment interest;

- For services, it is the service charge set by the service provider. The service provision in a number of cases is specified as follows:

+ For golf business, it is the selling price of the membership card or golf-playing ticket, inclusive of the golf playing charge and deposit (if any);

+ For casino, prize-winning video game and betting business, it is the turnover from such business minus the prize already paid to customers;

+ For dance hall, massage parlor and karaoke bar business, it is the turnover from such business.

- For goods and services used for barter, internal consumption or donation, it is the excise taxed price of the goods or service of the same or similar kind at the time of barter, internal consumption or donation.

Excise-taxed prices of goods and services specified in this Article are inclusive of additional charges and revenues (if any) enjoyed by business establishments.

Taxed prices are calculated in Vietnam dong. If taxpayers have foreign currency turnover, foreign currency amounts must be converted into Vietnam (long at the average exchange rate on the inter-bank foreign currency market, announced by the State Bank of Vietnam at the time of turnover generation) for determination of taxed prices.

What are the regulations on the excise-taxable prices of goods and services in Vietnam? (Image from the Internet)

What is the deadline for declaring excise tax in Vietnam?

According to Article 8 of Decree 126/2020/ND-CP, the declaration of excise tax is stipulated as follows:

Excise tax is declared monthly, except in cases where excise tax must be declared for each occurrence of the following events:

- Excise tax incurred by exporters on goods that are sold domestically instead of being exported if excise tax is not paid during manufacture of such goods. Excise tax incurred by business establishments buying domestically manufactured motor vehicles, airplanes, yachts that were originally not subject to excise tax but then repurposed and become subject to excise tax.

- Excise tax on exported and imported goods. If such goods are not subject to the declaration on each occurrence, the guidance of the Ministry of Finance shall be followed.

What are the conditions for excise tax deduction in Vietnam?

According to Clause 3, Article 7 of Decree 108/2015/ND-CP as amended by Decree 14/2019/ND-CP specifying the conditions for excise tax deduction as follows:

- When importing materials subject to excise tax for manufacturing goods subject to excise tax, and when importing goods subject to excise tax, the receipts for excise tax payment at importation shall be used as the basis for excise tax deduction.

- If materials are purchased from a domestic manufacturer:

+ A sale contract which specifies that the materials are directly manufactured by the seller; the copy of the Certificate of business registration of the seller which must bear the seller's signature and seal.

+ Bank transfer receipts.

+ VAT invoices are the basis for deduction of excise tax. The amount of excise tax paid by the buyer when buying materials equals (=) taxable price multiplied (x) by excise tax rate; where:

The excise tax shall be deducted when making excise tax declaration and the excise tax payable is calculated by adopting the following formula:

If excise tax payable or paid on the quantity of materials used for manufacturing of goods sold in period cannot be determined yet, the figures of the previous period may be used to calculate the deductible excise tax and the actual amount shall be determined at the end of the quarter or year. In any case, deductible excise tax must not exceed the excise tax on the quantity of materials set out in technical regulations applied to such products.