Hi Lawyer, my brother has a plan to open a winery specializing in selling premium wines. However, on the subject of tax, I have heard that there is an excise tax on alcohol. Why is alcohol subject to an excise tax? How to calculate excise tax on alcohol in Vietnam? Are there any cases where alcohol is not subject to excise tax? Looking forward to helping my counsel. I would like to express my sincere thanks to Lawyer.
Special consumption tax is a tax applied to certain types of luxury goods and services in order to regulate production, import and social consumption. How is the current excise tax calculated on alcohol? Let’s find out this issue with Lawyer X.
Legal grounds
Law on Special Consumption Tax 2008, amended and supplemented 2014
What is excise tax?
Special consumption tax is an indirect tax levied on some special goods produced and consumed by businesses. This tax is paid by the establishments that directly produce the goods, but the consumers are responsible for the tax because the tax is added to the selling price.
What are the characteristics of the excise tax on alcohol?
The taxable audience is narrow. Subjects subject to excise tax include only a number of goods and services that the State needs to regulate.
Regulate once during the circulation of goods and services. Specifically, goods and services subject to excise tax are levied only once at the stage of production; import goods, or trade in services.
It is an indirect tax. The indirect nature of this tax shows: SCT is levied on the income of consumers of goods and services subject to SCT indirectly through the prices of goods and services that that person consumes.
Who is subject to excise tax?
Goods:
a) Cigarettes, cigars and other preparations from tobacco plants used for smoking, inhaling, chewing, smelling and sucking;
b) Alcohol;
c) Beer;
d) Automobiles with less than 24 seats, including both passenger and cargo cars with two or more rows of seats, with a fixed partition design between the passenger compartment and the cargo compartment;
e) Two-wheeled motorcycles, three-wheeled motorcycles with a cylinder capacity of over 125cm3;
f) Aircraft, yacht;
g) Gasoline of all kinds, naphtha, reformed components and other preparations for making gasoline;
h) Air conditioner with capacity of 90,000 BTU or less;
i) Cards;
k) votive paper, votive goods.
Service:
a) Trading in discotheques;
b) Business massage, karaoke;
c) Casino business (casino); prize-winning electronic games, including games with jacks, slots and similar machines;
d) Betting business;
e) Golf business including selling membership cards and golf tickets;
f) Lottery business.
How is the current excise tax calculated on alcohol?
According to Article 5 of the Law on Special Consumption Tax, the basis for calculating excise tax is the taxable price of taxable goods and services and the tax rate.
The payable SCT amount is calculated by the following formula:
SCT amount = SCT calculation price x SCT rate
What is the excise tax rate?
The excise tax rates for goods and services are currently prescribed according to the following SCT Schedule:
| No. | Goods and services | Tax (%) |
| I | Goods | |
| 1 | Cigarettes, cigars and other tobacco preparations | 75 |
| 2 | Wine | |
| a) Alcohol of 20 degrees or more | 65 | |
| b) Alcohol below 20 degrees | 35 | |
| 3 | Beer | 65 |
| 4 | Cars with less than 24 seats | |
| a) Passenger cars with 9 seats or less, except those specified at Points 4d, 4e and 4g of this Tariff. | ||
| – Type with cylinder capacity of 1,500 cm3 or less | 40 | |
| – Type with cylinder capacity over 2,000 cm3 to 2,500 cm3 | 50 | |
| – Type with cylinder capacity over 2,500 cm3 to 3,000 cm3 | 60 | |
| – Type with cylinder capacity over 3,000 cm3 to 4,000 cm3 | 90 | |
| – Type with cylinder capacity over 4,000 cm3 to 5,000 cm3 | 110 | |
| – Type with cylinder capacity over 5,000 cm3 to 6,000 cm3 | 130 | |
| – Type with cylinder capacity over 6,000 cm3 | 150 | |
| b) Passenger cars from 10 to under 16 seats, except those specified at Points 4d, 4e and 4g of this Tariff. | 15 | |
| c) Passenger cars with between 16 and under 24 seats, except those specified at Points 4d, 4e and 4g of this Tariff. | 10 | |
| d) Automobiles that carry both people and goods, except those specified at Points 4d, 4e and 4g of this Tariff. | ||
| – Type with cylinder capacity of 2,500 cm3 or less | 15 |
Subjects are not subject to excise tax in which cases?
Goods specified above are not subject to special consumption tax in the following cases:
Case 1
- Goods directly exported by manufacturing or processing establishments or sold or entrusted to other business establishments for export
Case 2
- Imported goods include:
a) Humanitarian aid, non-refundable aid; gifts for state agencies, political organizations, socio-political organizations, socio-political-professional organizations, social organizations, socio-professional organizations, people’s armed forces units , gifts and gifts for individuals in Vietnam according to the levels prescribed by the Government;
b) Goods transported in transit or borrowed by road through Vietnam’s border gates or borders, goods transshipped according to the Government’s regulations;
c) Goods temporarily imported for re-export and temporarily exported or re-imported are not subject to import tax or export tax within the time limit prescribed by law on export tax and import tax;
d) Furniture of foreign organizations and individuals according to diplomatic immunity standards; carry-on goods in the duty-free baggage allowance; goods imported for tax-free sale as prescribed by law;
Case 3
- Aircraft and yachts used for commercial purposes of transporting goods, passengers, tourists and aircraft used for security and defense purposes;”
Case 4
- Ambulance cars; cars carrying prisoners; funeral cars; cars designed with both seats and standing seats can carry 24 people or more; cars running in amusement parks, entertainment and sports areas without registration for circulation and not participating in traffic;
Case 5
- Goods imported from abroad into non-tariff zones, goods sold from inland into non-tariff zones and used only in non-tariff zones, goods traded between non-tariff zones together, except for passenger cars with less than 24 seats.
Please see more articles:
- Procedures for transferring motorbike name in Vietnam
- Determining the fault factor when a traffic accident occurs in Vietnam
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Frequently asked questions
Pursuant to Article 3 of the Law on Special Consumption Tax 2008 (amended 2014) and Clause 3 of Decree 108/2015/ND-CP, the goods specified above are not subject to excise tax.
Firstly, excise tax is one of the tools to help the State implement management policies for production, business and importation of goods and services; contribute to promoting production and trading of goods and services.
Second, the excise tax is one of the economic tools for the State to regulate the incomes of high-income populations, and guide reasonable consumption.
Third, excise tax is an important tool used to stabilize and increase revenue for the state budget.
Conclusion: So the above is How to calculate excise tax on alcohol in Vietnam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
