Vietnam Issues Decree On Special Consumption Tax

by Mary Swire, Tax-News.com, Hong Kong

10 April 2009

Vietnam's Prime Minister Nguyen Tan Dung has signed Decree No. 26/2009/ND-CP, which provides detailed guidance on the implementation of the law on Special Consumption Tax.

According to Article 3 of the law, there are 5 groups of goods being exempted from the special consumption tax.

Under the Decree, the first group includes humanitarian and non-refundable aids, gifts from foreign organizations and individuals to State-owned agencies, social-political and professional organizations and units of the Vietnam People’s Armed Forces within limits stipulated by law.

The second group includes various types of transit goods.

The third group includes aircrafts and cruise liners that are used for business purposes and transportation of cargo, passengers and tourists. In the event that they are not used for said purposes, they are liable for the tax in accordance with the special consumption tax law.

The fourth group of goods includes ambulances, prison vans, funeral cars, vehicles designed with both seating and standing room for 24 or more passengers and vehicles operating in entertainment, recreational and sport areas which are not registered for road use.

The last group consists of air conditioners with a capacity of 90,000 BTU or less, which in accordance with the manufacturer’s design are only used for installation in transport vehicles such as cars, trains, ships, boats and air planes.

The Decree took effect on April 1, 2009, although the application of regulations on special consumption taxes for alcohol and beer will not take effect until January 1, 2010.

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