What day is December 12? Are promotional goods subject to VAT in Vietnam?
Vietnam: What day is December 12?
December 12 is a major discount event originating from China according to the Gregorian calendar. It is known as "Shuangshier" or "Shopper's Mercy Day", "Discount If Desired". It is also considered a variation of the mega sale day in celebration of Singles' Day on November 11.
Besides, December 12 is also known as the end-of-year online shopping festival, a significant event akin to September 9, Black Friday, and Cyber Monday. This is the last opportunity in the year for businesses to engage in deep discount programs, stimulate consumer demand, and clear inventory in preparation for the New Year. Consumers can also take advantage of this day to shop for their favorite items at a discounted price.
For businesses, this is a smart strategy to boost sales. At this time of year-end, customers tend to shop extensively. Launching promotional programs will contribute to further strengthening the buying motivation. In Vietnam, the events of December 12 are strongly embraced. Many brands and stores have already announced their sales programs for this day. Items undergoing substantial discounts include household goods, kitchen appliances, electronic devices, etc.
Additionally, according to the lunar calendar, December 12 is the anniversary of the founding of the tailoring profession. This day holds special significance for those in the tailoring industry, serving as an important occasion to express gratitude and remembrance to those who have contributed to fostering and passing down the craft. It carries a profound meaning about the Vietnamese moral principle of "When drinking water, remember its source."
Note: Information is for reference purposes only!
Vietnam: What day is December 12? (Image from Internet)
Are promotional goods subject to VAT in Vietnam?
Pursuant to Clause 5, Article 7 of Circular 219/2013/TT-BTC stipulating the calculation of VAT on promotional goods as follows:
Taxable Price
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- For products, goods, and services used for promotion as regulated by the commercial law, the taxable price is determined to be zero (0); if goods and services used for promotion are not conducted in accordance with commercial law, they must be declared and taxed as goods and services used for internal consumption, gifts, presents, and donations.
Specific promotional forms are as follows:
a) For promotional forms such as providing free samples, giving goods to customers, offering free services, the taxable price for sample goods and services is zero.
In case the promotional program in December 2014 is not implemented according to the correct order, procedures per commercial law, Company TNHH P must declare and calculate VAT on the gifted products when purchasing products in December 2014.
b) For the form of selling goods or services at a lower price compared to previous sales, the VAT taxable price is the reduced sales price applied during the registered or notified promotional period.
The VAT taxable price for a recharge card with a value of 100,000 VND during the promotional period is calculated as follows:
c) For promotional forms of sales or service provision that include vouchers or service usage certificates, there is no requirement to declare and calculate VAT on those vouchers or service usage certificates.
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For promotional goods in accordance with commercial law, the taxable price is determined to be zero (0).
In cases where goods and services are used for promotion but not conducted according to commercial law, they must be declared and taxed similarly to goods and services for internal consumption, gifting, and donations.
Therefore, promotional goods are not subject to VAT if complying with the commercial law.
Shall an invoice be issued when selling promotional goods in Vietnam?
According to Clause 1, Article 4 of Decree 123/2020/ND-CP regulating the principles of making, managing, and using invoices and documents as follows:
Principles of Making, Managing, and Using Invoices and Documents
1. When selling goods, providing services, the seller must issue an invoice to the buyer (including cases where goods and services are used for promotions, advertisements, samples; goods and services used for gifts, donations, exchanges, payments instead of wages to employees, and internal consumption (except goods circulated internally for continued production); issuing goods under forms of lending, borrowing, or returning goods) and must fully record the contents as regulated in Article 10 of this Decree. In cases of using electronic invoices, they must adhere to the standard data format from the tax authority as regulated in Article 12 of this Decree.
- When deducting personal income tax, collecting taxes, fees, and charges, the deducting organization must issue a tax deduction certificate, tax receipt, fee receipt to the individual subject to tax deduction, taxpayer, fee payer, and must fully record the contents as regulated in Article 32 of this Decree. In cases of using electronic receipts, they must adhere to the standard data format from the tax authority. In case an individual authorizes the tax finalization, a personal income tax deduction certificate is not issued.
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Thus, according to the above regulation, the seller must issue an invoice to the buyer, including cases where goods and services are used for promotions.
