Maximum value of promotional product in Vietnam from December 1, 2024

Maximum value of promotional product in Vietnam from December 1, 2024 (Image from the Internet)

On October 10, 2024, the Government of Vietnam issued Decree 128/2024/ND-CP amending several articles of Decree 81/2018/ND-CP which details Commercial Law on trade promote.

Maximum value of promotional product in Vietnam from December 1, 2024

According to Article 6 of Decree 81/2018/ND-CP (amended and supplemented by Decree 128/2024/ND-CP) on maximum value of promotional product in Vietnam:

- The material value used for promotion for a unit of goods or services being promoted cannot exceed 50% of the sale price immediately before the promotion period of that unit of goods or services, except for promotions using the forms stipulated in Clause 8 and Clause 9, Article 92 of the 2005 Commercial Law, Article 8, Clause 2, Article 9, Article 12, Article 13, Article 14 of Decree 81/2018/ND-CP.

- The total value of goods and services used for promotion in a promotional program cannot exceed 50% of the total value of the goods and services being promoted, except for promotions using the forms stipulated in Clause 8 and Clause 9, Article 92 of the 2005 Commercial Law, Article 8 and Clause 2, Article 9 of Decree 81/2018/ND-CP.

- The value of goods and services used for promotion falls into one of the following categories:

+ For traders executing promotions not directly manufacturing or importing goods or not directly providing promotional services, the value is calculated by the payment price of the trader executing the promotion to purchase promotional goods and services or the market price of the goods and services used for promotion at the time of announcement;

+ For goods and services used for promotion that are goods of that trader directly manufacturing, importing, or providing services, the value is calculated by the cost price or import price of the promotional goods and services.

- In cases where a concentrated promotion program is organized, the maximum threshold for the value of goods and services used for promotion is 100%. The maximum threshold of 100% also applies to promotional activities within the framework of programs and commercial promotion activities decided by the Prime Minister of Vietnam.

- Concentrated promotion programs as stated include:

+ Government agencies (central and provincial levels) issuing decisions to organize the execution of concentrated promotion programs to implement national or local economic development goals. The state encourages organizing concentrated promotion programs. All traders have the right to participate in these programs;

+ Promotional periods during holidays and festivals as prescribed by labor laws, including:

++  Lunar  New  Year  period:  30  days  immediately  preceding  the  first  day  of  the  Lunar  New  Year;

++  Other  holiday  periods.  The  promotion  period  for  each  promotional  event  during  holidays  must  not  exceed  the  corresponding  holiday  period  prescribed  by  labor  law.

Promoted product and promotional product in Vietnam

Goods and services promoted, used for promotion, comply with the provisions of the Commercial Law and the following specific regulations:

- Goods and services promoted do not include alcohol, lottery, cigarettes, substitute milk for breastfeeding, human medicine including medicines allowed circulation by the Ministry of Health (except for promotion to pharmaceutical business traders) public medical examination and treatment services, education services of public institutions, public vocational education institutions, goods and services prohibited from circulation in Vietnam, and other goods and services prohibited from promotion by law.

- Goods and services used for promotion do not include alcohol, lottery, cigarettes, human medicine including medicines allowed circulation by the Ministry of Health (except for promotion to pharmaceutical business traders), goods and services prohibited from circulation in Vietnam, and other goods and services prohibited from promotion by law.

- Money can be used as goods or services for promotion except for promotions as stipulated in Articles 8, 10, 11 of Decree 81/2018/ND-CP.

(Article 5 of Decree 81/2018/ND-CP)

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