Are karaoke and F&B services in Karaoke bars in Vietnam subject to excise tax?

 Are karaoke and F&B services in Karaoke bars in Vietnam subject to excise tax? (Image from the Internet)

1. Are karaoke bars in Vietnam subject to excise tax?

According to Article 2 of the Law on excise tax 2008 (amended by Article 1 of the Law on amendments to some Articles of the Law on excise tax), the subjects of excise tax include:

* Goods:

+ Cigarettes, cigars, and other preparations from tobacco used for smoking, sniffing, chewing, sniffing, and sucking;

+ Alcohol;

+ Beer;

+ Automobiles with less than 24 seats, including combined passenger and cargo vehicles with two or more rows of seats and a fixed partition between the passenger and cargo compartments;

+ Motorcycles with engine capacity over 125cc (cubic centimeters);

+ Aircraft, yachts;

+ All types of gasoline;

+ Air conditioners with a capacity of 90,000 BTU or less;

+ Playing cards;

+ Joss paper, imitation paper objects.

* Services:

+ Nightclub business;

+ Massage and karaoke bar;

+ Casino business; prize-winning electronic game business, including jackpot machines, slot machines, and similar types;

+ Betting business;

+ Golf business, including selling golf club memberships, golf tickets;

+ Lottery business.

Thus, the karaoke bar is subject to excise tax.

2. Are F&B services in karaoke bars in Vietnam subject to excise tax?

According to Clause 7 Article 4 of Decree 108/2015/ND-CP, for services, the taxable price for excise tax is the price at which the service is sold by the business.

- For golf businesses, it is the revenue excluding VAT from selling memberships, golf tickets, including ticket sales for golf practice, grass maintenance fees, buggy rental, and caddy services, deposit (if any), and other charges paid by golfers and members to the golf business.

- If the golf business has other business activities not subject to excise tax such as hotels, catering, merchandise sales, or games, those goods and services are not subject to excise tax.

- For casino operations and prize-winning electronic games, the taxable price for excise tax is the revenue from these activities minus (-) the prize payouts to customers;

- For betting business, the taxable price for excise tax is the ticket sales revenue after deducting prize payouts;

- For nightclub, massage, and karaoke bares, the taxable price for excise tax is the revenue from activities in the nightclub, massage, and karaoke establishments, including revenue from F&B servicess and other accompanying services;

- For lottery business, the taxable price for excise tax is the revenue from selling various lottery tickets as per legal regulations.

3. Tax rate for Karaoke-related services in Vietnam

According to Article 7 of the Law on excise tax 2008 (amended by Article 1 of the Law on amendments to some Articles of the Law on excise tax), the tax rate for the Karaoke-related services is 30%.

The formula for calculating excise tax for the Karaoke-related services is as follows: excise tax = taxable price for excise tax (excluding VAT) x 30%.

To Quoc Trinh

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