Does production of votive gilt papers for export to China have to pay excise tax in Vietnam?

Does production of votive gilt papers for export to China have to pay excise tax in Vietnam?

In Article 2 of the Law on excise tax in 2008, as amended by Clause 1, Article 1 of the Law on excise tax, amended in 2014, there are provisions on taxable objects as follows:

1. Goods:

a/ Cigarettes, cigars and other tobacco preparations used for smoking, inhaling, chewing, sniffing or keeping in mouth;

b/ Liquor;

c/ Beer;

d/ Under-24 seat cars, including cars for both passenger and cargo transportation with two or more rows of seats and fixed partitions between passenger holds and cargo holds;

e/ Two- and three-wheeled motorcycles of a cylinder capacity of over 125 cm³;

f/ Aircraft and yachts;

g/ Gasoline of all kinds, naphtha, reformade components and other components for mixing gasoline;

h/ Air-conditioners of 90,000 BTU or less;

i/ Playing cards;

j/ Votive gilt papers and votive objects.

2. Services:

a/ Dance halls:

b/ Massage parlors and karaoke bars;

c/ Casinos; prize-winning video games, including jackpot and slot games and games on similar machines;

d/ Betting;

e/ Golf business, including the sale of membership cards and golf playing tickets;

f/ Lottery business.

g) Gasoline.

Article 3 of the Law on excise tax 2008 stipulates:

Goods specified in Clause 1, Article 2 of this Law are not subject to excise tax in the following cases:

1. Goods which are directly exported by producers or processors, or which are sold or entrusted by these producers or processors to other business establishments for export;

2. Imported goods, including:

a/ Goods as humanitarian aid or non-refundable aid; gifts for state agencies, political organizations, socio-political organizations, socio-political-professional organizations, social organizations, socio-profcssional organizations or people’s armed forces units; and donations or gifts for individuals in Vietnam within the quotas prescribed by the Government;

b/ Goods transited or transported via Vietnamese border gates or borders, and goods transported to and from border gates under the Government’s regulations;

c/ Goods temporarily imported for re-export and temporarily exported for re-import which are not subject to import duty or export duty within the time limit specified in the law on import duty and export duty;

d/ Personal effects of foreign organizations and individuals within diplomatic immunity quotas; personal belongings within duty-free luggage quotas; and goods imported for duty-free sale under law;

3. Aircraft and yachts used for commercial transportation of cargos, passengers and tourists;

4. Ambulances; prison vans; hearses; cars designed with both seats and standing places for transporting 24 or more people; cars running in recreation, entertainment and spoils areas which neither are registered for circulation nor move on roads;

5. Goods imported from abroad into non-tariff areas, goods sold from the inland into non-tariff areas for use only in non-tariff areas, and goods traded between non-tariff areas, except under-24 seat cars.

According to this Article, for the production of votive gilt papers for export to China, they are considered as goods directly exported by manufacturing or processing establishments. Therefore, in this case, we do not have to pay excise tax in Vietnam.

Who is responsible for paying excise tax in Vietnam?

Article 4 of the Law on excise tax 2008 provides for taxpayers as follows:

Excise taxpayers include producers and importers ofgoods and providers of services which are subject to excise tax.

Exporters that purchase excise tax-liable goods from producers for export and do not export but sell them domestically shall pay excise tax.

Thus, organizations and individuals that produce and import goods and provide services are subject to excise tax in Vietnam.

Best Regards!