NATIONAL ASSEMBLY        SOCIALIST REPUBLIC Of VIETNAM
                         Independent-freedom-Happiness

                                   Hanoi, 30 June 1990
                                as amended 5 July 1993

LAW ON SPECIAL SALES TAX

In order to give direction to production and consumption, to impose a tax on consumption as a source of revenue for the State and to enhance management of production and business in relation to a number of particular goods;

Pursuant to articles 80 and 83 of the Constitution of the Socialist Republic of Vietnam;

Pursuant to article 84 of the 1992 Constitution.

This Law provides for a special sales tax.

CHAPTER I

General Provisions

Article 1

Economic organizations which, and individuals who are of different economic sectors and manufacture the taxable goods referred to in article 9 of this Law shall pay special sales tax.

Article 2

Special sales tax shall be paid once only in respect of each item of goods.

Production establishments which produce goods which are subject to special sales tax shall not be liable to pay turnover tax when the goods are sold.

Special sales tax levied during the production or processing of goods shall be credited in the calculation of special sales tax due in respect of subsequent sales involving those goods provided that documentation has been maintained in compliance with the regulations.

Goods which are for export, shall be exempt from special sales tax.

Article 3

Production establishments which manufacture goods subject to special sales tax shall declare and make full payment of tax in accordance with this Law.

Article 4

All acts of tax evasion including delay in tax payment and other breaches of the provisions of this Law are strictly prohibited.

Article 5

All State bodies, social organizations, units of the armed forces and citizens shall be responsible for assisting the tax office and tax officers in carrying out their duties.

CHAPTER II

The Basis for Calculation of

Special Sales Tax and Special Sales Tax Tariff

Article 6

The basis for calculating special sales tax shall be the quantity of taxable goods sold, their taxable value and the applicable tax rates.

Article 7

The taxable value of goods subject to special sales tax shall be their sale prices as fixed by the establishments which produced them at the place of manufacturing where there is no special sales tax.

Article 8

Where a production establishment barters goods or uses them for internal consumption or as gifts those goods shall be subject to special sales tax in accordance with the provisions of this Law.

Article 9

Taxable goods and applicable tax rates are set out in the following tariff:

Order                   Goods Tax Rate (%)
Number

  1                     Tobacco products:
  (a)                   filtered cigarettes produced mainly
                        from imported raw materials      70
  (b)                   filtered cigarettes produced mainly
                        from domestic raw materials      52
  (c)                   Cigarettes without filter,cigars 32

   2                    Spirits:
  (a)                   Traditional alcohol medicine     15
  (b)                   Other 
                        - over 40 degrees proof          90
                        - from 30 to 40 degrees proof    75
                        - under 30 degrees proof         25

   3                    All beers                        90
                        except canned beer               75

   4                     firecrackers                   100

Where necessary the Standing Committee of the National Assembly shall make decisions on amendments to and additions of the goods and tax rates in the special sales tax tariff. Such amendments and additions shall be submitted to the National Assembly for approval at its next session.

CHAPTER III

Tax Registration and Payment and

Transportation of Goods

Article 10

A production establishment which produces goods subject to special sales tax shall:

1. Register with the tax office and make a declaration of its capital, labour, goods produced, location of production and nature of business no less than five days before commencement of operation, merger or change of location. Dissolution or change of business shall be reported to the tax office no less than five days prior to commencement of the dissolution or change of business.

2. Strictly comply with regulations of the State on standards of accounting records and vouchers.

3. Make declarations in relation to special sales tax in the standard form provided by the Ministry of finance.

4. Provide the necessary documents requested by the tax office for auditing of books of account, records and vouchers, and goods and materials in warehouses, factories and processing workshops, and shops.

5. Pay taxes in full and in time.

Article 11

Establishments which produce goods subject to special sales tax shall be obliged to:

1. Submit a monthly report on the special sales tax to the tax office within the first five days of the month following that in respect of which the report has been made including reports in respect of months where no special sales tax is generated.

2. Make full payment of special sales tax after allowing for tax which was provisionally paid in the previous month or already paid in the current month. Payment shall be made in accordance with the time schedule stipulated by the tax office which s hall require full payment no later than the 15th day of the month following the month in respect of which the tax is paid.

Article 12

Any establishment which is to apply a trade mark to goods which are subject to special sales tax shall report the trade mark to the tax office. Changes to the trade mark shall also be reported. Reports shall be made five days before the trademark is use d or changed.

Article 13

Any establishment which produces goods which are subject to special sales tax shall, if production is to be suspended for one month or more, report the number of goods in stock at the time of the suspension to the tax office. Recommencement of production shall also be reported. Reports shall be made five days before the suspension or recommencement.

Article 14

Special sales tax shall be paid by the production establishment at the time of sale of the goods or of delivery of the processed products.

The special sales tax on tobacco leaves and shredded tobacco, shall be paid by the purchaser at the place of purchase prior to their transportation.

Article 15

Payment of special sales tax shall be as follows:

1. Small establishments contracted to produce goods shall pay tax periodically on the 10th, 20th and final day of each month.

2. Where, large establishments fail to collect to full tax payable, the time for tax payment may be extended provided that it does not exceed fifteen (15) days as from the date of sale of the goods or of delivery of the processed products.

Article 16

When transported, goods subject to special sales tax shall be accompanied by the following relevant documents:

1. Evidence of payment of tax:

(a) A receipt for tax paid or tax stamp issued by the tax office.

(b) A transportation permit issued by the tax office or a receipt for transport issued by a State owned enterprise which is registered at the tax office.

2. A transportation permit for goods in respect of which special sales tax has not yet been paid is a document issued directly by the tax office when the goods concerned are moved to another place.

Article 17

The tax office shall have the following powers and duties:

1. To guide, assist, and supervise business establishments to comply strictly with the regulations relating to the standards of accounting, records and vouchers, and the procedures for declaration and payment of special sales tax.

2. To examine, in relation to special sales tax, the books of account, records and vouchers, materials, goods, work in progress and stock which is in shops or being transported.

3. In necessary cases, to require any organization or individual to provide documents relating to the calculation and payment of special sales tax.

4. To calculate tax, prepare and approve the tax book, notify the amount of the special sales tax to be paid to the State Treasury, issue permits for the transportation of goods, and in collecting tax to issue to the taxpayer a receipt of the Ministr y of finance for tax paid.

5. In relation to any breaches of the Law on Special Sales Tax, to prepare reports, impose administrative penalties within its authority, and propose prosecution for criminal responsibility.

6. To consider and resolve complaints and accusations relating to the special sales tax.

Article 18

The tax office is entitled to determine the quantity of taxable goods sold, the taxable values of such goods, and the quantity of internal consumption in cases where the business establishment has not:

1. Registered with the tax office or made a declaration in accordance with the stipulations governing determination of the quantity of taxable goods sold or their taxable values.

2. Submitted at all, or in time, a declaration of monthly sales and the selling price of goods.

3. Strictly complied with regulations relating to standards of accounting, records and vouchers.

4. Provided the books of account, records and vouchers required by the tax office, or has not provided sufficient documents necessary for the determination of the quantity and taxable values of taxable goods sold.

The tax office shall determine the amount of tax to be paid on the basis of the results of its investigation.

If the production establishment disagrees with the amount of tax levied, it may complain to the immediately superior tax office. Pending resolution of the complaint the business establishment shall pay the amount of tax levied.

CHAPTER IV

Reduction of and Exemption from Special Sales Tax

Article 19

Cases of exemption from and reduction of tax are as follows:

1. Where the establishment which produces goods subject to special sales tax is adversely affected by natural disaster, war or other contingencies.

2. Where the establishment, which has just established or has just expanded and applied new manufacturing technology, makes a loss as a result of paying all its special sales tax due, it shall be considered for a reduction of tax, provided that the l evel of reduction is not more than thirty (30) per cent of the tax due within a period of two years.

The Government shall provide provisions on the basic of exemption from and reduction of tax in this article.

CHAPTER V

Breaches and Rewards

Article 20

1. Breaches of the Law on Special Sales Tax shall be dealt with as follows:

(a) Any organization which, or individual who, breaches the stipulations relating to registration and declaration, or the establishment of books of account, or the keeping of records and vouchers as stated in articles 10, 11 and 12 of this Law, shall, depending on the seriousness of the breach, be subject to a warning or a fine of up to five hundred thousand (500,000) dong.

(b) Any organization which, or individual who, produces, processes, purchases or engages in trading of goods subject to special sales tax and who evades paying tax, or transports goods without the required accompanying documentation, shall, in additio n to making full payment of the special sales tax stipulated in this Law, be fined an amount of up to three times the amount of tax evaded:

- for the first offense: once;

- for the second offense: twice;

- for the third offense: three times.

If the first offense is very serious it may be the subject of a fine of twice or three times the tax evaded.

(c) Any organization which, or individual who, makes late payment of tax due, or of a fine imposed as a penalty, shall, in addition to paying the tax or fine as stipulated by this Law, pay in respect of each day of late payment a fine of one fifth (0. 2) of one per cent of the amount of tax paid late.

(d) Any organization which, or individual who, delays payment of tax or a fine shall be dealt with as follows:

- the amount of the tax or fine shall be transferred as a priority by the bank concerned from the credit balance of a bank account of the organization or individual to the State Revenue in accordance with any order for execution made by the tax office;

- its goods and chattels shall be impounded as security for the full payment of the tax payable or fine; and

- its assets shall be withheld in accordance with the stipulations of the law as security for the full payment of the outstanding tax or fine.

2. Any individual who evades paying a large amount of tax or who has been previously subjected to administrative penalty due to a failure to comply with any of sub-clauses (a), (b), (c) or (d) of clause 1 of this article and who again commits either of those offenses or a serious crime shall be subject to criminal prosecution in accordance with the stipulations of article 169 of the Criminal Code.

Article 21

The power to deal with the breaches referred to in clause 1 of article 20 as follows:

1. for the breaches referred to in sub-clause (a):

(a) The head of the local tax office has power to impose a fine of up to fifty thousand (50,000) dong.

(b) The head of a tax office in a district, township, provincial capital or district under provincial authority has power to impose fines of up to five hundred thousand (500,000) dong.

2. for the breaches referred to in sub-clause (b):

(a) The head of a district or equivalent level tax office has power to impose a fine equal to the amount of evaded tax.

(b) The head of a provincial or equivalent level tax office has power to impose a fine of up to three times the amount of evaded tax.

3. The head of the tax office directly responsible for the establishment producing the goods which are subject to special sales tax has the power to impose the penalty stipulated in articles 20(1)(c) and (d) of this Law for delay in making a tax paym ent.

Article 22

Any individual who obstructs or incites others to obstruct the implementation of this Law on Special Sales Tax or the investigation of and dealing with any breaches of this Law, shall, depending on the seriousness of the offense, be subject to administrat ive penalty or to prosecution for criminal responsibility in accordance with the provisions of the law.

Article 23

Any tax officer or individual who takes advantage of his position to appropriate or embezzle tax paid shall repay to the State all moneys appropriated or embezzled, and, depending on the seriousness of the offense, be subject to administrative penalty or prosecution for criminal responsibility in accordance with the provisions of the law.

Any tax officer or individual who takes advantage of his position and ability to protect those who breach the provisions of this Law on Special Sales Tax, who behaves in a manner which is contrary to the provisions of this Law or who is irresponsible in h is or her implementation of it, shall, depending on the seriousness of the offense, be subject to administrative penalty or prosecution for criminal responsibility in accordance with the provisions of the law.

Any tax officer who is irresponsible or intentionally deals with a case in an unlawful manner which results in damage being suffered by the taxpayer or other person shall pay compensation to the person affected.

Article 24

The Government shall make rules for the reward of:

1. Tax offices which and tax officers who satisfactorily carry out their assigned duties.

2. Persons who discover breaches of this Law on Special Sales Tax.

CHAPTER VI

Complaints and Time Limits

Article 25

Organizations and individuals may lodge complaints in respect of incorrect application of this Law on Special Sales Tax.

A complaint shall be lodged at the tax office which issued the notice to pay tax or the relevant decision, within thirty (30) days from the date of receipt of the notice or decision.

Pending resolution of the complaint, the complainant shall pay in full and in time the amount of tax payable or fines imposed.

The office which receives the complaint shall consider and resolve it within fifteen (15) days from the date of receipt. In more complicated cases, the period may be extended up to thirty (30) days from the date of receipt.

Article 26

In the event that the complainant disagrees with the decision of the office which deals with the complaint, or the time limited for its resolution expires without it being resolved, the complainant may petition the office immediately superior to that at w hich the complaint was first lodged.

Article 27

The tax office shall refund any amount wrongly collected and pay compensation if any, within fifteen (15) days from the date on which the superior office's decision on the complaint is received.

Article 28

In the event that a fraudulent statement, tax evasion or mistake in relation to taxation is discovered within three years of its occurring, the tax office shall have the power and responsibility to collect or repay the tax, as the case may be.

CHAPTER VII

Organization of Implementation

Article 29

The Government shall be responsible for the organization of tax collection throughout Vietnam.

Article 30

The Ministry of finance shall be responsible for the organization of the collection of special sales tax throughout Vietnam, and for the resolution within its power of all complaints and petitions.

Article 31

The chairmen of the people's committees at all levels shall in their respective localities supervise the implementation and examination of, and compliance with, this Law on Special Sales Tax.

CHAPTER VIII

final Provisions

Article 32

Exports and imports which were not exempt from export or import duty were previously subject to export and import duty on the basis of their individual listing in the relevant tariff. Export and import duty shall now be applied on the basis of the group of goods to which the exports or imports belong and at the rate stated in the tariff issued under the Law on Export and Import Duties on Commercial Goods.

The Government shall stipulate the taxable value for special sales tax purposes of duty free exports and imports, criteria for exemption of such goods from special sales tax and the tax rate to be applied to duty free imports which are to be re-exported.

Article 33

In the event that a market price fluctuates more than twenty (20) per cent, the Government may, in accordance with current prices, adjust all money amounts previously referred to in this Law.

Article 34

This Law on Special Sales Tax shall be of full force and effect as of 1 October 1990.

All previous provisions inconsistent with this Law are hereby repealed.

This Law was approved by Legislature VIII of the National Assembly of the Socialist Republic of Vietnam at its 7th Session, on 30 June 1990.

President of the National Assembly

LE QUANG DAO (Signed)

Provisions of amending Law not included above:

Article 2

The Government shall provide amendments and additions to all promulgated provisions on details for the implementation of the Law on Special Sales Tax, in order for consistency with this Law.

Article 3

This Law shall be of full force and effect as from 1 September, 1993.

This Law was passed by legislature IX of the National Assembly of the Socialist Republic of Vietnam as its 3rd session on 5 July 1993.

Chairman of the National Assembly

NONG DUC MANH