Fresh guidelines on special consumption tax

Question: What are the new regulations on the new Decree No. 108/2015/ND-CP detailing and guiding the implementation of some articles of the Special Consumption Tax Law 2008?     

Answer:

Objects subject to the SCT

Decree 108 has further clarified the characteristics of the objects subject to tax as stipulated in the SCT Law such as aircraft and yachts designed for civilian purposes; votive objects excluding children toys and teaching aids; betting businesses including sports and entertainment betting and other forms of bettering as prescribed by law. The Decree also emphasizes the goods subject to SCT shall be finished products excluding sets of components to the very finished products.

Objects outside the SCT

Decree 108 has specifically listed the types of goods outside the SCT stated in the SCT law including:

Aircraft and yachts used by business, security and national defense; or converted to uses other than security and national defense;

Vehicles designed by the manufacturer to be used as ambulances, prisoner transport vehicles, funeral vehicles; vehicles designed for use by both sitting and standing passengers with a capacity of 24 people or more; cars designed for use only in amusement parks, for recreation or sport, and which are not registered or fit to be used on main roads and in traffic;

Imports from abroad into non-tariff areas, domestic goods sold in non-tariff areas and only used therein, goods traded between non-tariff areas, except for the goods brought into the areas which entitled to the status of non-tariff areas, except for the goods brought into the area which entitled to the status of non-tariff areas where people inhabit, and there are no solid fences and passenger cars of less than 24 seat; and

Air conditioning with capacity of 90,000 BTU or less as designed by the manufacturer for installation on transport vehicles.

Price for SCT calculation

Decree 108 also guides how to determine the price for SCT calculation for some commodities as follows:

The price for SCT calculation with regard to imports (excluding gasoline of all types) sold by importer establishments shall apply to the same calculation as domestically produced goods based on the selling price without value added tax or environmental protection taxes (if any);

For the imports at the import stage, the price for SCT calculation is determined by the total for calculating import duty;

For the goods sold on an installment or deferment basis, the price for SCT calculation is the price of goods sold by lump-sum payment, excluding any interest on installment or deferral;

For tobacco products, the price for SCT calculation shall include compulsory contributions and support expenses as provided by the Law on Prevention and Control of Tobacco Harm; and

For the goods subject to the SCT, the price for SCT calculation does not exclude the value of packaging and container bottles.

Decree 108 also emphasizes that the date of the revenue generated from the goods is the date of transferring the ownership or right to use goods by the buyer, regardless of whether or not the sale proceeds are received; for services, that is the date of completing the provision of services or the date of billing for the service, regardless of whether or not the service proceeds are received.

SCT repayment

The repayment occurs when the paid amount of SCT is larger than the tax payable or pursuant to the decision of the competent authority or an international treaty to which Viet Nam is a member.

SCT deduction

Under Decree 108, the tax deduction is made when taxpayers conduct its tax declaration and payment whereby; and

Taxpayers for the imports subject to SCT (except for gasoline of all types) are eligible to deduct the paid tax amount at the import stage upon determining the tax payable for domestic sales.

Decree 108 takes effect from January 1, 2016 replacing Decree 26/2009/ND-CP, dated March 16, 2009 and Decree 113/2011/ND-CP, dated December 8, 2011./.