Circular No. 64/2009/TT-BTC of March 27, 2009, guiding the Government’s Decree No. 26/2009/ND-CP of March 16, 2009, which details a number of articles of the law on excise tax

THE MINISTRY OF FINANCE
———-

SOCIALIST REPUBLIC OF VIET NAM
Independence – Freedom – Happiness
———-

No. 64/2009/TT-BTC

Hanoi, March 27, 2009

 

CIRCULAR

GUIDING THE GOVERNMENT’S DECREE No. 26/2009/ND-CP OF MARCH 16, 2009, WHICH DETAILS A NUMBER OF ARTICLES OF THE LAW ON EXCISE TAX

Pursuant to November 14, 2008 Law No. 27/2008/QH12 on Excise Tax;
Pursuant to November 29, 2006 Law No. 78/2006/QH11 on Tax Administration;
Pursuant to the Government’s Decree No. 26/2009/ND-CP of March 16, 2009, detailing a number of articles of the Law on Excise Tax;
Pursuant to the Government’s Decree No. 118/2008/ND-CP of November 27, 2008, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

The Ministry of Finance guides the Government’s Decree No. 26/2009/ND-CP of March 16, 2009, as follows:

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Circular guides the Government’s Decree No. 26/2009/ND-CP of March 16, 2009, detailing a number of articles of the Law on Excise Tax (below referred to as Decree No. 26/2009/ND-CP).

Article 2. Taxable objects

Excise tax-liable objects are specified in Article 2 of Law No. 27/2008/QH12 on Excise Tax and Article 2 of Decree No. 26/2009/ND-CP.

For excise tax-liable air-conditioners of a capacity of 90,000 BTU or less: In case a producer sells or an importer imports outdoor units and indoor units separately, the sold or imported goods (outdoor units and indoor units) are also liable to excise tax like complete products (air-conditioners in complete sets).

Article 3. Non-taxable objects

Goods specified in Article 2 of this Circular are not liable to excise tax in the following cases:

1. Goods directly exported by producers or processors or sold or entrusted to other business establishments for export, including:

1.1. Goods exported abroad directly by producers or processors, including goods sold or processed for export-processing enterprises, except under-24-seat cars sold to export-processing enterprises.

Establishments possessing goods not liable to excise tax as specified at this Point must have dossiers proving that the goods have actually been exported. Such a dossier comprises:

– Goods sale contract or contract on processing for the foreign party.

– Invoice on sale of exported goods or delivery of goods or payment of processing remuneration.

– Exported goods declaration, with the customs office’s certification that the goods have been exported.

– Via-bank payment documents.

Via-bank payment means the transfer of money from the importer’s account into the bank account under the exporter’s name in the form of payment as agreed in the contract and prescribed by the bank. The cash payment document is the exporter bank’s credit note on the sum of money already received from the importer bank’s account. In case of deferred payment, such must be agreed in the export contract. When the payment time becomes due, the business establishment must present via-bank payment documents. In case of entrusted export, the entrusted party must make via-bank payment to the foreign party.

1.2. Within the period during which import or export duty is not required to be paid under regulations, producers of excise tax-liable goods that conduct temporary export for re-import under permits for temporary export for re-import are not obliged to pay excise tax when re-importing but shall pay it when selling these goods.

1.3. Goods sold by producers or entrusted to exporters for export under economic contracts.

Producers possessing goods not liable to excise tax as specified at this Point must have dossiers proving that the goods have been actually exported. Such a dossier comprises:

– Contract on purchase and sale of goods for export or contract on entrusted export, in case of entrusted export, between the producer and exporter.

– Written record of liquidation (whole or partial liquidation) of the contract on sale of goods for export, or written record of liquidation of the contract on entrusted export, indicating names, quantities, types and selling prices of actually exported goods; form of payment; sum of money and serial numbers and dates of documents on via-bank payment for exported goods by the foreign purchaser to the exporter; sum of money and serial numbers and dates of documents of payment between the producer and exporter or entrusted exporter; the serial number and date of the export contract and copies of customs declarations, for exported goods.

For goods purchased or entrusted by exporters for export and not exported but sold in the country, exporters shall declare and pay excise tax when selling the goods in the country.

1.4. Goods brought abroad for sale at overseas fairs or exhibitions.

Establishments possessing goods brought abroad for sale at overseas fairs or exhibitions shall fully produce:

– Written invitation or registration for participation in an overseas fair or exhibition.

– Exported goods declaration, with the customs office’s certification that the goods have been exported.

– List of goods sold at the fair or exhibition.

– Cash payment documents, for goods sold at the fair or exhibition. If the cash value is higher than the prescribed level, such must be declared to the customs office, enclosed with documents of remittance of money into the bank under current regulations.

2. Imported goods in the following cases:

2.1. Goods imported as humanitarian or non-refundable aid; gifts and donations, including:

a/ Goods imported as humanitarian or non­refundable aid, including also goods imported with non-refundable aid as approved by competent agencies; goods provided as humanitarian assistance or emergency relief for victims of wars, natural disasters or epidemics;

b/ Overseas organizations’ or individuals’ gifts for state agencies, political organizations, socio­political organizations, socio-political-professional organizations, social organizations, socio-professional organizations or people’s armed forces units;

c/ Donations or gifts for individuals in Vietnam within law-prescribed quotas.

2.2. Goods transited or transported via Vietnamese border gates or borders and goods transported to and from border gate, including:

a/ Goods transported from exporting countries to importing countries via Vietnamese border gates but procedures for their import into and export from Vietnam are not carried out;

b/ Goods transported from exporting countries to importing countries via Vietnamese border gates and brought into bonded warehouses but procedures for their import into and export from Vietnam are not carried out;

c/ Goods transited or transported via Vietnamese border gates or borders under agreements signed between the Vietnamese Government and foreign governments or between agencies and representatives authorized by the Vietnamese Government and foreign governments;

d/ Goods transported from exporting countries to importing countries not via Vietnamese border gates.

2.3. Goods temporarily imported and actually re-exported within the time limit during which import duty is not required to be paid under the law on import duty and export duty. These goods are not liable to excise tax on the volumes of actually re-exported goods.

Goods temporarily exported and actually re-imported within the time limit during which export duty is not required to be paid under the law on import duty and export duty. These goods are not liable to excise tax on the volumes of actually re-imported goods.

2.4. Goods temporarily imported for display at fairs or exhibitions which have actually been re-exported within the time limit during which import duty is not required to be paid under regulations.

After a fair or exhibition, organizations or individuals that fail to re-export temporarily imported goods shall declare and pay excise tax. If being detected through inspection as failing to make declaration, organizations and individuals shall, apart from paying excise tax, be sanctioned under law.

2.5. Personal effects of foreign organizations and individuals within diplomatic immunity quotas under the law on diplomatic immunities.

2.6. Personal effects within import duty-free luggage quotas of Vietnamese individuals and foreigners upon entry or exit via Vietnamese border gates.

2.7. Goods imported for duty-free sale at duty­-free shops under law.

3. Goods imported from abroad into non-tariff areas, goods sold from inland Vietnam into non-tariff areas and used only in non-tariff areas, and goods traded between non-tariff areas, except under-24-seat cars.

The dossiers, order and competence for excise tax non-collection settlement and excise tax finalization in the cases specified in Clauses 2 and 3 of this Article are similar to those for import duty non-collection or exemption under the law on import duty and export duty.

Importers of the goods not liable to excise tax upon importation under Clauses 2 and 3 of this Article that use these goods for other purposes shall, within 10 days after the goods are delivered for use for other purposes, declare and pay under regulations excise tax at the stage of importation to customs offices where customs declarations are registered. The procedures for excise tax collection in these cases are the same as those for import duty.

4. Aircraft and yachts used for commercial transportation of cargos, passengers and tourists.

If excise tax-free aircraft or yachts are used for purposes other than commercial transportation of cargos, passengers or tourists, they will be liable to excise tax on their value left after subtracting the depreciated value under regulations.

Business establishments possessing the above aircraft or yachts shall declare and pay excise tax to their managing tax agencies.

5. Cars specified in Clause 4. Article 3 of Law No. 27/2008/QH12 on Excise Tax include cars which, according to manufacturer standards, are designed to be used as ambulances, prison vans or hearses; cars designed with both seats and standing places for transporting 24 or more people: and cars operating in recreation, entertainment and sports areas which neither are registered for circulation nor move on roads.

6. Air-conditioners of 90,000 BTU or less which, according to manufacturer standards, are designed only to be fitted aboard means of transport, such as cars, train carriages, ships, boats or aircraft.

Article 4. Taxpayers

1. Excise taxpayers are producers and importers of goods and providers of services liable to excise tax, including:

1.1. Business organizations established and making business registration under the Law on Enterprises, the Law on State Enterprises (now the Law on Enterprises) or the Law on Cooperatives;

1.2. Economic organizations of political organizations, socio-political organizations, social organizations, socio-professional organizations, politico-socio-professional organizations, peoples armed forces units, non-business organizations or other organizations;

1.3. Foreign-invested enterprises and foreign parties to business cooperation contracts under the Law on Foreign Investment in Vietnam (now the Investment Law); foreign organizations and individuals doing business in Vietnam without establishing legal entities in Vietnam;

1.4. Individuals, households, independent business groups and other producers, traders and importers.

2. Exporters that purchase excise tax-liable goods from producers for export and do not export but sell these goods in the country shall pay excise tax. When selling these goods, exporters shall declare and fully pay excise tax.

Chapter II

TAX BASES

Article 5. Excise taxed prices

The excise taxed price of a goods or service is the goods selling price or the service charge set by the production and business establishment, exclusive of excise tax and value-added tax, specifically as follows:

1. For domestically produced goods, the excise taxed price is determined as follows:

Excise taxed price

=

Selling price exclusive of value-added tax

1 + Excise tax rate

The selling price exclusive of value-added tax is determined under the law on value-added tax.

In case an excise tax-liable goods producer has its goods sold by its dependent cost-accounting establishments (affiliates or shops), the price serving as a basis for excise tax calculation is the selling price exclusive of value-added tax set by such an affiliate or shop. For a producer that has its goods sold by agents at prices set by the producer for commissions, the price serving as a basis for determining the excise taxed price is the commission-inclusive selling price exclusive of value-added tax set by that producer.

In case an excise tax-liable goods producer has its goods sold by trading establishments, the price serving as a basis for excise tax calculation is the selling price exclusive of value-added tax set by that producer, which must not be 10 lower than the average selling price set by such a trading establishment.

If the producer’s selling price is lower than the selling price set by the trading establishment by more than 10, the excise taxed price shall be fixed by the tax agency under the Law on Tax Administration and guiding documents.

2. For imported goods, the excise taxed price is determined as follows:

Excise taxed price = Import-duty calculation price + Import duty.

The import-duty calculation price is determined under the Law on Import Duty and Export Duty. For imported goods eligible for import duty exemption or reduction, the taxed price is exclusive of the exempted or reduced import duty amount.

3. For excise tax-liable goods, the excise taxed price is exclusive of value-added tax and excise tax and inclusive of the tare.

For bottled beer, if a deposit is made for bottles, producers and customers shall make quarterly finalization of such deposit and include the deposit sum equivalent to the value of irrecoverable bottles in excise taxed turnover.

Example 1: In 2010, the value-added tax-exclusive selling price of I liter of canned beer is VND 20,000, and the excise tax rate for beer (applicable from January 1, 2010, through December 31, 2012) is 45, then the excise taxed price is determined as follows:

Excise taxed price of 1 liter of canned beer

=

VND 20,000

1 + 45

 

=

VND 20,000

1.45

 

=

VND 13,793

Example 2: In the second quarter of 2010 the value-added tax-exclusive selling price of one box of Hanoi beer bottles is VND 120,000, then the excise taxed price is determined as follows:

Excise taxed price of 1 box of beer bottles

=

VND 20,000

1 + 45

 

=

VND 120,000

1.45

 

=

VND 82,758

Example 3: In the third quarter of 2010, beer company A sells 1,000 bottles of beer to customer B and collects a total deposit for bottles of VND 1,200,000 (VND 1,200/bottle). At the end of the quarter, company A and customer B make finalization: the number of recoverable bottles is 8(X) and the quantity of irrecoverable bottles is 200. Based on the number of recoverable bottles, company A returns to customer B a sum of VND 960,000 and shall include in excise taxed turnover the deposit of VND 240,000 (200 bottles x VND 1,200/bottle) for the number of irrecoverable bottles.

4. For processed goods, the excise taxed price is that of goods sold, set by the processing-ordering establishment or the selling price of products of the same or similar kind at the same time with goods sale, exclusive of value-added tax and excise tax.

5. For goods produced in the form of business cooperation between a producer and an owner of goods trademarks (brands) or production technologies, the excise taxed price is the selling price exclusive of value-added tax set by that owner.

6. For goods sold in installments or on deferred payment, the excise taxed price is the lump-sum selling price of such goods, exclusive of value-added tax and excise tax, and exclusive of the installment or deferred payment interest.

7. For goods and services used for barter, internal consumption, donation or sales promotion, the excised tax price is that of goods or services of the same or similar kind at the time of barter, internal consumption, donation or sales promotion.

8. For exporters that purchase excise tax-liable goods from producers for export then do not export but sell these goods in the country, the excise taxed price in this case is the selling price exclusive of excise tax and value-added tax, as follows:

Excised tax price

=

Domestic selling price exclusive of value-added tax set by the exporter

1 + Excise tax rate

In case an exporter declares a selling price (inclusive of value-added tax and excise tax) as a basis for excise taxed price determination lower than the market selling price by more than 10, the excise taxed price shall be fixed by the tax agency under the Law on Tax Administration and guiding documents.

9. For services, the excise taxed price is the service charge rate set by the service provider, exclusive of value-added tax and excise tax, specifically as follows:

Excised tax price

=

Service charge exclusive of value-added tax

1 + Excise tax rate

The service charge exclusive of value-added tax as a basis for determining excise taxed prices of some services is specified as follows:

a/ For golf business, it is the value-added tax-exclusive turnover from the sale of membership cards or golf-playing tickets, inclusive of golf playing charge paid by golf players or golf club members to the golf business establishment (including also the charge for golf course maintenance) and deposit (if any). In case such deposit is returned to the depositor, the business establishment will have the paid tax amount refunded by deducting it in the subsequent period’s payable tax amount. If no deduction is made, the business establishment will have tax refunded under regulations. In case the golf business establishment trades in other goods or services not liable to excise tax, such goods or services are not liable to excise tax.

Example 4: For a golf business establishment also dealing in hotel, catering, goods sale or game business activities not liable to excise tax, these goods or services are not liable to excise tax.

b/ For casino or prized video game business, it is the turnover from such business minus the prize paid to customers, i.e., the collected sum of money

(exclusive of value-added tax) from the exchange of money at exchange counters for customers before playing or at playing tables or machines, minus the sum of money exchanged back to customers.

c/ For betting business, it is the turnover from the sale of betting tickets minus (-) the prizes paid to customers (at prices exclusive of value-added tax), exclusive of the turnover from the sale of entry tickets to see entertainment performances associated with betting business.

d/ For dance hall, massage parlor and karaoke bar business, it is the value-added tax-exclusive turnover from such business, inclusive of turnover from catering services and other associated services (e.g., bath and sauna in massage service establishments).

Example 5: Value-added tax-exclusive turnover from dance hall business (inclusive of the turnover from catering services) of business establishment A in a tax period is VND 100,000,000.

 

Excise taxed price

=

VND 100,000,000

1 + 40

 

=

VND 100,000,000

1.4

 

=

VND 71,428,571

e/ For lottery business, it is the turnover (exclusive of value-added tax) from the sale of tickets of lotteries permitted for business under law.

10. Excise taxed prices of goods and services specified in Clauses 1 thru 9 of this Article are inclusive of revenues in addition to goods selling prices or service charges (if any) enjoyed by production and business establishments.

Taxed prices are calculated in Vietnam dong. In case taxpayers have foreign currency turnover, such foreign currency turnover must be converted into Vietnam dong at the average inter-bank exchange rate announced by the State Bank of Vietnam at the time of turnover generation, for determination of taxed prices.

For imported goods, the conversion of Vietnam dong into a foreign currency used for determining the taxed value must comply with the law on import duty and export duty.

11. In case a production or business establishment fails to comply with or improperly comply with regulations on invoices and documents, the tax agency shall, based on the practical production or business situation, assess its turnover under the Law on Tax Administration and determine the payable excise tax amount.

12. The time of excise tax determination is specified as follows:

– For goods, the time of turnover generation is the time of transfer of the right to own or to use the goods to the purchaser, regardless of whether or not money has been collected;

– For services, the time of turnover generation is the time of completing service provision or the time of making a service provision invoice, regardless of whether or not money has been collected;

– For imported goods, the time of turnover generation is the time of registration of customs declarations.

13. When trading in goods, providing services and transporting goods under law, producers and importers of goods and providers of services liable to excise tax shall observe regulations on accounting, invoices and documents.

Producers that sell or deliver goods to their affiliates, dependent establishments or agents shall issue invoices. In case an affiliate or shop is located in the same province or city with the production establishment or when goods are ex-warehoused to another warehouse, such production establishment may use the ex-warehousing-cum-­internal transportation bill enclosed with the internal transfer order.

Producers of trademarked goods liable to excise tax shall register trademarks under regulations.

Article 6. Excise tax rates

1. Excise tax rates comply with Article 7 of Law No. 27/2008/QH12 on Excise Tax and Article 5 of Decree No. 26/2009/ND-CP.

2. In case an establishment produces different kinds of goods and provides different kinds of services liable to excise tax at different tax rates, it shall declare and pay excise tax according to each tax rate prescribed for each kind of goods or service. If the establishment cannot determine each tax rate, it shall calculate and pay tax at the highest tax rate applicable to the goods it produces or the services it provides.

Chapter III

EXCISE TAX REFUND. DEDUCTION AND REDUCTION

Article 7. Tax refund

Excise taxpayers may have the paid tax amounts refunded in the following cases:

1. Goods temporarily imported for re-export, including:

a/ Imported goods for which excise tax has been paid but which are still kept in warehouses or yards at border gates, are under customs supervision and will be re-exported abroad;

b/ Imported goods for which excise tax has been paid for delivery or sale abroad through Vietnam-based agents; goods imported for sale to foreign firms’ vehicles operating on international routes via Vietnamese ports or to Vietnamese vehicles operating on international routes under the Government’s regulations;

c/ Goods temporarily imported for re-export by the method of temporary import for re-export. When they are re-exported, the excise tax amounts already paid on the volumes of actually re-exported goods will be refunded;

d/ Imported goods for which excise tax has been paid. When they are re-exported abroad, the excise tax amounts already paid on the volumes of re-­exported goods will be refunded;

e/ Goods temporarily imported for display at fairs, exhibitions or showrooms or for other purposes in a certain period for which excise tax has been paid. When they are re-exported, the paid excise tax amounts will be refunded.

In case goods temporarily imported for re-­export have been actually re-exported within the tax payment time limit specified by the law on import duty and export duty, excise tax needs not to be paid on the volumes of actually re-exported goods.

f/ Imported goods for which excise tax has been paid as declared but the volumes of actually imported goods are smaller than declared; imported goods damaged or lost in the course of importation for plausible reasons for which excise tax has been paid.

g/ For imported goods failing to meet quality or category requirements specified in contracts or import permits (at the fault of foreign goods owners), inspected by competent testing agencies and certified by foreign goods owners, which are permitted to be imported, customs offices shall inspect and re-certify payable excise tax amounts. Overpaid tax amounts, if any, will be refunded, and insufficient tax amounts, if any, will be added to equal the payable amounts.

In case goods are permitted to be re-exported abroad, excise tax amounts already paid on the volumes of re-exported goods will be refunded.

In case goods are returned to foreign parties within the time limit during which import duty is not required to be paid under regulations, customs offices shall conduct examination and will not collect excise tax on the volumes of imported goods returned to foreign parties.

2. For goods which are raw materials imported for export production and processing, the excise tax amounts already paid on the volumes of raw materials used for the production of actually exported goods will be refunded.

The excise tax refund under Clauses 1 and 2 of this Article applies only to actually exported goods, and the procedures, dossiers, order and competence for refunding excise tax on imported goods are similar to those for import duty refund under the law on import duty and export duty.

3. When making tax finalization upon merger, separation, split-up, dissolution, bankruptcy, ownership change, assignment, sale, contracting or lease of state enterprises, production and business establishments that have overpaid excise tax amounts may request tax agencies to refund such amounts.

4. Excise tax will be refunded in the following cases:

a/ Tax refund under competent agencies’ decisions according to law;

b/ Tax refund under treaties to which the Socialist Republic of Vietnam is a contracting party;

c/ Tax refund in case paid excise tax amounts are larger than payable excise tax amounts under regulations.

The procedures, dossiers, order and competence for excise tax refund under Clauses 3 and 4 of this Article must comply with the Law on Tax Administration and guiding documents.

Article 8. Tax deduction

Taxpayers that produce excise tax-liable goods from excise tax-liable raw materials, if having lawful documents, may have excise tax amounts already paid on raw materials deducted upon the determination of excise tax amounts payable at the stage of production. The deductible excise tax amount is equivalent to the excise tax amount on raw materials used for the production of excise tax-liable goods sold.

Excise tax amounts shall be deducted upon excise tax declaration according to the following formula:

Payable excise tax amount

=

Excise tax amount payable on excise tax- liable goods ex-warehoused for sale in a period

Excise tax amount already paid on raw materials purchased which are equivalent to volumes of ex-warehoused goods for sale in the period

Example 6:

In a tax declaration period, establishment A has the following operations:

+ It imports 10,000 liters of liquor and has paid an excise tax amount of VND 250 million upon importation (based on the receipt of excise tax payment at the stage of importation).

+ It ex-warehouses 8.000 liters for producing 12,000 bottles of liquor.

+ It sells 9,000 bottles of liquor; the excise tax amount payable for these 9,000 bottles is VND 350 million.

+ The excise tax amount already paid at the stage of importation of liquid liquor for 9,000 sold bottles of liquor is VND 150 million.

So, the excise tax amount payable by establishment A is this period will be:

VND 350 million – VND 150 million = VND 200 million.

In case the excise tax amount already paid for raw materials equivalent to products sold in the period cannot yet be accurately determined, the previous period’s data may be used to temporarily calculate the deductible excise tax amount. Tax finalization shall be made based on actual data at the end of a month or quarter. In all cases, the deductible excise amount must not exceed the excise tax amount calculated for raw materials according to econo-technical norms of products. The production establishment shall register econo-technical norms of products with its managing tax agency.

Article 9. Tax reduction

Excise tax reduction complies with Article 9 of Law No. 27/2008/QH12 on Excise Tax.

Tax reduction procedures and dossiers comply with the Law on Tax Administration and guiding documents.

Chapter IV

IMPLEMENTATION PROVISIONS

Article 10. Effect

1. This Circular takes effect on April 1, 2009; this Circular’s excise tax-related provisions applicable to liquor and beer will take effect on January 1, 2010.

2. This Circular replaces:

– The Finance Ministry’s Circular No. 119/2003/TT-BTC of December 12, 2003, guiding the Government’s Decree No. 149/2003/ND-CP of December 4, 2003, which details the Law on Excise Tax and the Law Amending and Supplementing a Number of Articles of the Law on Excise Tax.

– The Finance Ministry’s Circular No. 18/2005/TT-BTC of March 8, 2005, amending and supplementing a number of points of the Finance Ministry’s Circular No. 119/2003/TT-BTC of December 12, 2003, guiding the Government’s Decree No. 149/2003/ND-CP of December 4, 2003, which details the Law on Excise Tax and the Law Amending and Supplementing a Number of Articles of the Law on Excise Tax.

Part A of the Finance Ministry’s Circular No. 115/2005/TT-BTC of December 16, 2005. guiding the Government’s Decree No. 156/2005/ND-CP of December 16. 2005. which amends and supplements the Decrees detailing the Law on

Excise Tax and the Law on Value-Added Tax.

Particularly, the provisions applicable to liquor and beer remain effective through December 31. 2009.

Article 11. Organization of implementation

1. Tax agencies shall manage excise tax collection, refund and reduction for business establishments.

2. Customs offices shall manage excise tax collection and refund for imported goods.

3. In the course of implementation, units and business establishments should promptly report any difficulties or problems to the Ministry of Finance for timely settlement.

 

 

FOR THE MINISTER OF FINANCE
VICE MINISTER

Do Hoang Anh Tuan

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