Tax is a source of contributions from individuals, households, business households and organizations to promote the construction and development of the country. In which, value added tax, special consumption tax in particular are important sources of state budget revenue. These are all indirect taxes levied on goods and services, however, there are many differences between these two taxes in terms of nature, characteristics and tax bases. LSX Lawfirm will give you an article about: “Distinguish Special Consumption tax and value added tax in Vietnam”, as follows:
Legal grounds
– Law on Value Added Tax No. 13/2008/QH12, amended and supplemented in 2013
– Law on Special Consumption Tax No. 27/2008/QH12, amended and supplemented in 2014
– Law on Tax Administration No. 38/2019/QH14
– Law No. 71/2014/QH13 Amending and supplementing a number of articles of the tax laws
– Law No. 106/2016/QH13 Amending and supplementing a number of articles of the Law on Value Added Tax, Law on Special Consumption Tax and Law on Tax Administration
Definition about distinguish Special Consumption tax and value added tax in Vietnam
So, Special Consumption Tax (SCT) is a tax levied on the consumption of certain special goods and services, which should be strongly regulated to guide production and consumption and increase revenue for the state budget. country.
So Value Added Tax (VAT) is a tax charged on the added value of goods and services arising in the process from production, circulation to consumption. The added value of goods or services is the difference between the selling price of goods and services and the corresponding purchase price in the tax period.
You can also refer to the article about Dossier for registration of personal tax identification for foreigners or Procedures for registration of personal tax identification for foreigners.
Related article: The benefits of registering a personal tax number in Vietnam
Distinguish Special Consumption tax and value added tax in Vietnam
Special Consumption tax
- Taxable objects: Taxable objects are narrower than VAT, only applicable to a number of goods and services of a luxury nature, affecting health or not recommended for use. For example: cigarettes, alcohol, votive paper, discotheque business services, karaoke, lottery
- Taxation stage: SCT is levied only once at the stage of production or import, not at the stage of circulation.
- Taxpayers: SCT payers are organizations and individuals that manufacture and import goods and provide services that are subject to excise tax.
In case an organization or individual engaged in export business buys goods subject to excise tax from a manufacturer for export but does not export but consumes it domestically, such organization or individual shall: export business is the payer of excise tax. - Tax bases: Based on tax calculation prices and tax rates, in which:
- So, the excise taxable price is the selling price and service provision price exclusive of excise tax and exclusive of VAT, including additional revenues, collected (if any) to which business establishments are entitled.
- Tax rate: The tax rate includes many levels, applied to each group of taxable goods and services, with the highest tax rate being 150% and the lowest being 10%.
- Subjects eligible for tax deduction: Subjects eligible for excise tax credit are producers of SCT-liable goods using excise taxable raw materials, if they have legal documents, they may deduct the paid excise tax amounts for their products. raw materials when determining the amount of SCT payable at the production stage.
- Role:
- So, is a tool to help the state manage production and business establishments and import goods and services, contributing to promoting production and business of a number of goods and services.
- So, being an economic tool for the State to regulate the income of high-income population classes, guiding reasonable consumption.
Value added tax
- Taxable objects: Widely applied to goods and services used for production, business and consumption in Vietnam, including:
+) Goods and services are produced and consumed domestically, regardless of the form of consumption
+) Goods and services imported for domestic consumption.
- Firstly Taxation stage: VAT is levied on the entire sales revenue or on the added value of goods at all stages of the production and business process; from production, circulation, to consumption. . At the consumption stage, the consumer will be the one to pay taxes through the payment.
- Then Taxpayers: VAT payers are organizations and individuals that produce and trade in VATable goods and services; and organizations and individuals that import VATable goods.
- Then Tax bases: Based on tax calculation prices and tax rates, in which:
- VAT calculation price is the selling price of goods and services exclusive of VAT
- Tax rate: depends on certain categories of goods. Currently, three tax rates are applied: 0%, 5%, and 10%.
- Then Objects eligible for tax credit: Objects eligible for VAT credit are business establishments that pay VAT by the credit method; fully implement the invoice and voucher accounting regime in accordance with the law on invoice and voucher accounting; and register for tax payment by the tax credit method.
- Role:
In order to contribute to promoting production development; expanding circulation and distribution of goods; encouraging the export of goods; and promoting the accounting and accounting regime, the use of invoices and vouchers; and payment through bank.
Related questions
Accordingly the Law, for transport; loading and unloading is the freight rate; loading and unloading without VAT; regardless of the facility directly transporting; loading or unloading.
Accordingly the Law, for casino services, prize-winning video games; entertainment business with bets; the proceeds from this activity include excise tax minus the amount paid to guests.
Accordingly the Law, for goods processing, it is the processing price accordingly the processing contract excluding VAT, including wages, costs of fuel, motivation, auxiliary materials and other costs for the processing of goods goods industry.
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