Special Consumption Tax in Vietnam (2023)
Note: The original version of this article was first published October 8, 2013. It was updated November 1, 2022 to reflect the current special consumption tax rates.
What is Vietnam’s Special Consumption Tax?
Vietnam’s special consumption tax applied to a range of luxury goods and non-essential items. It is sometimes referred to as a ‘sin’ tax or ‘luxury’ tax.
It is codified by the National Assembly’s Law on Special Excise Duty No. 27/2008/QH12 dated November 14, 2008 which came into effect from April 1, 2009.
Two supplementary laws were also passed in 2014. These were:
- The National Assembly’s Law No. 70/2014/QH13 dated November 26, 2014 on amending and supplementing several articles of the Law on Special Excise Duty into effect from January 1, 2016; and
- The National Assembly’s Law No. 71/2014/QH13 dated November 26, 2014 on amending and supplementing several articles of the Law on Tax into effect from January 1, 2015.
What does Vietnam’s Special Consumption Tax apply to?
Vietnam’s special consumption tax applies to a range of goods from cigarettes and tobacco products to luxury cars and playing cards.
What goods are exempt from Vietnam’s Special Consumption Tax?
The following goods are exempt from SCT:
- Goods manufactured and directly exported or sold to authorized agents for export;
- Imported goods including humanitarian aid, non-refundable aid goods; personal belongings of foreign organizations and individuals under diplomatic immunity or duty-free personal belongings; goods which are transshipped, transited or transported through Vietnam’s border; goods temporarily imported for re-export, or temporarily exported for re-import during the tax-free period; and goods imported for duty-free sale under the prescribed regulations;
- Ambulances, hearses and automobiles with more than 24 seats; and
- Goods imported to non-duty areas, or domestic goods sold to non-duty areas (exclusive of automobiles with fewer than 24 seats).
SCT and VAT
Generally, goods and services that are subject to the SCT charges are also subject to VAT charges. The basis of VAT calculation is the selling price plus the SCT. For imported products, VAT is imposed on the dutiable value plus import duties plus SCT.
Tax Refunds and SCT
SCT is levied on each item only once, and SCT refunds are available for exported goods upon request by the taxpayers in certain cases (e.g., goods temporarily imported for re-export).
In the event that items subject to SCT are produced from materials for which the relevant SCT amount was already paid, then the SCT amount already paid will be deducted when calculating the SCT amount for their production.
Current Special Consumption Tax Rates 2022
|No.||Goods or services||Rate (%)|
|1||Cigarettes, cigars and other tobacco preparations||75|
|a) Of 20° proof or higher||65|
|b) Of below 20° proof||35|
|4||Under-24 seat motor vehicles|
|a) Passenger motor vehicles of 9 seats or fewer, except those specified at Points 4e, 4f and 4g of this Article|
|Of a cylinder capacity of 2,000 cm3 or less||45|
|Of a cylinder capacity of between over 2,000 cm3 and 3,000 cm3||50|
|Of a cylinder capacity of over 3,000 cm3||60|
|b) Passenger motor vehicle of between 10 seats and under 16 seats, except those specified at Points 4c, 4f and 4g of this Article||30|
|c) Passenger cars of between 16 seats and under 24 seats, except those specified at Points 4e, 4f and 4g of this Article||15|
|d) Motor vehicles for both passenger and cargo transportation, except those specified at Points 4e, 4f and 4g of this Article||15|
|dd) Motor vehicles powered by gasoline in combination with electricity or bio-fuel, with gasoline accounting for not more than 70% of the used fuel||70% of the tax rate for cars of the same kind as specified at Points 4a, 4b, 4c and 4d of this Article|
|e) Biofuel-powered motor vehicles||50% of the tax rate for cars of the same kind as specified at Points 4a, 4b, 4c and 4d of this Article|
|g) Electrically-operated motor vehicles|
|Passenger motor vehicles of 9 seats or fewer||25|
|Passenger motor vehicles of between 10 seats and under 16 seats||15|
|Passenger motor vehicles of between 16 seats and under 24 seats||10|
|Motor vehicles designed for both passenger and cargo transportation||10|
|5||Two- and three-wheeled motorcycles of a cylinder capacity of over 125 cm3||20|
|8||Gasoline of all kinds|
|9||Air conditioners of 90.000 BTU or less||10|
|11||Votive gilt papers and votive objects||70|
|2||Massage parlors and karaoke bars||30|
|3||Casinos and prize-winning video games||35|
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