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Taxation
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COURSE CONTENT

Chapter 1: Vietnamese tax system

Chapter 2: Customs duty

Chapter 3: Excise tax

Chapter 4: Value-added tax

Chapter 5: Corporate income tax (CIT)

Chapter 6: Personal income tax

5/3/22
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Chapter 3

Excise tax
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Main t o pics
I t ’s w h a t w e d i s c u s s t o d a y

- Excise tax
- Excise tax in Vietnam
(Special Excise tax)
- Excise tax in other
countries
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LEARNING OBJECTIVES

Define excise tax and understand its

characteristics.

Define who is liable to pay excise tax in

Vietnam.

Identify which goods and services are subject to

excise tax in Vietnam.

Define what transactions are exempt from excise

tax in Vietnam.
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LEARNING OBJECTIVES

Understand how to ascertain tax base, tax rate and ways

to define excise tax payable by taxpayers in Vietnam.

Know how to declare excise tax and when to file and

pay tax.

Define who and in what case is exempt from excise tax in

Vietnam.
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Excise tax theory

Definition
The characteristics
The purposes
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DEFINITION

An excise tax is an indirect tax on the sale of a

particular good or service.

à These items receive the excise tax due to

their ability to be harmful or costly to society.
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CHARACTERISTICS

Paying tax
at one time

Indirect tax Consumption tax

High tax rate

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ROLES

+ Raise revenue to finance

government spending
+ Regulate market activity
+ Reducing unequal
distributions of wealth
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Egypt was likely the first civilization to tax beer.

Queen Cleopatra imposed a tax on beer in order,
she claimed, to discourage public drunkenness,
though it is believed that the tax was used to
raise money to fund a war with Rome.

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Excise tax in Vietnam

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LEGAL DOCUMENTS INVOLVED

Law No.
Law on special excise 70/2014/QH13
duty No. dated November 26,
27/2008/QH12 2014 on
dated November 14, amendments to some
2008. Articles of the Law on
special excise duty

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THE SCOPE

Taxable objects, non-taxable objects

Taxpayers

Basis for tax calculation

Time for tax calculation

Tariff schedules

Tax exemption/reduction/refund
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TAXABLE OBJECTS

• 10 items or group of
items of goods

• 6 items of services
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Taxable objects
v Goods
ü Cigarettes, cigars and other tobacco
preparations used for smoking, inhaling,
chewing, sniffing or keeping in mouth;
ü Liquor;
ü Beer;
ü Playing cards
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Taxable objects

ü Under-24 seat cars;

ü Two- and three-wheeled
motorcycles of a cylinder
capacity of over 125 cm3;
ü Aircraft and yachts.
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Taxable objects

ü Gasoline of various kinds

ü Air-conditioners of 90,000 BTU
or less.
ü Votive gilt papers and votive
objects.
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Taxable objects

v Service
ü Dance halls;
ü Massage parlors and karaoke
bars
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Taxable objects

ü Casinos; prize-winning video

games, including jackpot and
slot games and games on
similar machines;

ü Betting;

ü Lottery business.
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Taxable objects

ü Golf business, including the

sale of membership cards and
golf playing tickets.
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Non-taxable objects

Goods specified as taxable

objects of this Law are not
subject to excise tax in the
following cases:
Ø Exports:
- Goods which are directly
exported by producers or
processors, or which are sold
or entrusted by these
producers or processors to
other businesses
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Non-taxable objects

Goods specified as taxable objects

of this Law are not subject to
excise tax in the following cases:
Ø Imports:
- Goods in transits
- Goods as humanitarian aid or non-
refundable aid
- Goods temporarily imported for re-
export
- Duty-free luggage quota;
diplomatic immunity quotas
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Non-taxable objects

Goods specified as taxable objects

of this Law are not subject to
excise tax in the following cases:

Ø Others:
- Free-zone trade cases
- “Special” cars
- “Special” Air-conditioners
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Vietnam’s territory Aboard

TAN THUAN EXPORT

Customs Duties
PROCESSING ZONE

Customs Duties

OTHER EXPORT PROCESSING

ZONE
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Non-taxable objects
Goods specified as taxable objects of this Law are
not subject to excise tax in the following cases :
Exports Imports Others
Directly export In transits Free-zone trade
cases
“Indirectly” humanitarian aid “Special” cars
export temporarily “Special” Air-
imported for re- conditioners
export

Duty-free
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Tax payers

Companies, produce
Individuals Taxable goods

Companies, provide
Individuals Taxable service

Companies, import
Individuals Taxable goods
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TAX CALCULATION METHODS

Domestic manufacturer & service provider

Taxable The tax
Excise tax = Quantity X X
price rate

Importer
Taxable The tax
Excise tax = Quantity X X
price rate
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Taxable price

For domestic manufacturer & service provider:

1
The price as the basis for calculating SET on a commodity or service
(hereinafter referred to as taxable price) is the selling price for the
commodity or service exclusive of SET, environmental protection
tax, (if any), and VAT
3
Selling price exclusive of VAT– environmental tax (if any)
Taxable
price
=
4 1 + Excise duty rate of goods

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Sales Tax
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1
For example: the price exclusive of VAT of a bottle of wine is
VND 125,000. Excise duty rate of wine is 25%. The excise
base price of this bottle of wine is

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Sales Tax
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Taxable price

For domestic manufacturer & service provider:

1 specifit cases:
Ø Some
- For casino, and electronic casino games, taxable prices
are the revenue from the casino or electronic casino
games, exclusive of the prizes given to players, which
equals
3 (=) the amount collected from payers at the
counter before playing minus (-) the amount of prizes
given
4 to players.
- For discotheque, massage, and karaoke business,
taxable prices are the VAT-exclusive revenue from
3
services provided within the discotheque, massage,
and karaoke business, including revenues from food
and drink and associated
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services.
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Sales Tax
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Taxable price

For Importers:
1
The price as the basis for calculating SET on a commodity or service
(hereinafter referred to as taxable price) is the selling price for the
commodity or service exclusive of SET, environmental protection
tax, (if any), and VAT
3
P𝑟𝑖𝑐𝑒 𝑜𝑛 𝑤ℎ𝑖𝑐ℎ
= 𝑖𝑚𝑝𝑜𝑟𝑡 𝑑𝑢𝑡𝑦 +
4
𝑖𝑠 𝑖𝑚𝑝𝑜𝑠𝑒𝑑 (CIF)

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Sales Tax
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For example, an air-conditioner with import base price of

VND110,000,000. Import tax payable is VND 1,000,000. The
excise base price of this air-conditioner is:

VND 10,000,000+ VND1,000,000=VND11,000,000

3

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Sales Tax
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CIF price
1 of an imported car is USD 20,000; import duty
on this model is 70%, SET is 45%, Exchange rate at the
time of importation is 22,500 VND/USD.

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Sales Tax
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Thuế Nhập khẩu

Thuế Tiêu thụ đặc

biệt

Thuế Giá trị gia tăng

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Example
1 3.1 :
We have data of a company engaged in beer production in a tax month as
follows:
- Exported beer: 200,000 cans with FOB price of VND8,000 per can
- Sale
3 of beer in domestic market: 5000,000 cans at price exclusive of
VAT of VND9,000
à Calculate the amount of excise duty pay able by that company. Given
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that, the excise duty rate applicable to beer is 50%

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Sales Tax
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EXAMPLE 3.2:
We have date of a company engaged in trading in a tax month as
1
follows:
Importation of wine with alcoholic content of 120: 100,000 bottles
with CIF price of VND 120,000 per bottle. CIF price was accepted as
import duty base price . Import duty rate applicable to this product
is 40%
3
à Calculate the excise duty amount payable by that company.
4 that the excise duty rate applicable to wine is 25%
Given

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Sales Tax
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EXAMPLE 3.3

Report
1 on dancing hall service as follows:
- The turnover generated by selling beer which is bought from
manufacturer is: VND200,000,000 (at selling price exclusive of VAT)
- The turnover generated by selling liquors which is bought from
manufacturer : VND150,000,000 (at selling price exclusive of VAT)
- Turnover
3 of dancing hall service selling price exclusive of VAT:
VND 450,000,000
à Calculate the excise duty payable by that company. Given that,
the4excise duty rate applicable to dancing hall is 50%

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Excise tax in other countries

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Excise tax in America
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Excise tax in Canada

Both the federal and provincial governments

impose excise taxes on specific goods such
as cigarettes, gasoline, alcohol, vehicle air
conditioners.

Canada has some of the highest rates of taxes

on cigarettes and alcohol in the world.
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