What is the excise tax rate applying to the dance hall service in Vietnam?

What is the excise tax rate applying to the dance hall service in Vietnam?

Pursuant to the provisions at point a, clause 2, Article 2 of the Law on excise tax 2008, dance hall service are among the services subject to excise tax.

Based on the provisions at clause 1, Section II 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 nightclub services is 40%.

Therefore, the dance hall service will be subject to a excise tax rate of 40%.

How to calculate excise tax for the dance hall service in Vietnam?

To be specific, Article 5 of the Law on excise tax 2008 specifies that the taxable base for excise tax is the taxable price of goods and services subject to tax and the tax rate. The excise tax payable is equal to the taxable price times the excise tax rate.

Thus, the calculation of excise tax for the dance hall service is determined by the following formula:

Dance hall service in Vietnam (Image from Internet)

What is the taxable price for the excise tax for the dance hall service in Vietnam?

The taxable price for the excise tax for the dance hall service is determined in 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 content on exchange rates in determining taxable price abolished by point d, clause 2, Article 6 of the Amended Law on excise tax 2014) as follows:

Taxable Price

The taxable price for excise tax on goods and services is the selling price, service provision price excluding excise tax, excluding environmental protection tax, and excluding value-added tax as prescribed:

1. For domestically produced goods, imported goods is the price set by the production facility, import facility upon sale.

In cases where goods subject to excise tax are sold to a commercial business facility with parent company-subsidiary relationships or related companies within the same parent company as the production facility, import facility, or commercial business facility with affiliated relationships, the taxable price must not be lower than a percentage (%) compared to the average price of commercial business facilities that purchase directly from production facilities, import facilities according to the regulations of the Government of Vietnam;

2. For imported goods at the import stage, the taxable price is the import tax price plus import tax. If import goods are exempted, reduced from import tax, the taxable price does not include the exempted, reduced import tax amount. Imported goods subject to excise tax can be deducted for the excise tax already paid at the import stage when determining the excise tax payable upon sale;

3. For processed goods, the taxable price is the selling price of goods sold by the processing facility or the selling price of equivalent or similar products at the same sales time;

4. For goods sold on an installment or deferred payment basis, the taxable price is the selling price based on one-time payment methods for those goods excluding installment interest, deferred payment interest.

5. For services, it is the service provision price of the business facility. The service provision price for certain cases is specified as follows:

a) For golf business, it is the membership card selling price, the golf playing ticket price including playing fees and deposit fees (if any);

b) For casino and prize-winning electronic game businesses, and betting businesses, it is the revenue from these activities minus the amount paid out as winnings for customers;

c) For nightclub, massage, karaoke businesses, it is the revenue from business activities in nightclubs, massage, karaoke business premises;

6. For goods and services used for exchange, internal consumption, gifting, it is the taxable price of similar or equivalent goods and services at the time these activities occur.

The taxable price for extraordinary items, services prescribed in this Article includes additional charges, receipts (if any) that the business is entitled to.

The taxable price is calculated in Vietnamese Dong. If the taxpayer's revenue is in foreign currencies, it must be converted to Vietnamese Dong based on the average trading exchange rate on the inter-bank foreign exchange market announced by the State Bank of Vietnam at the time of revenue occurrence to determine the taxable price.

The Government of Vietnam details this provision.

Thus, the taxable price for the excise tax for the dance hall service is the service provision price of the business facility.

In which:

+ The service provision price for dance hall servicees is the revenue from business activities in the nightclub.

+ This service provision price excludes excise tax, excludes environmental protection tax, and excludes value-added tax.