Special consumption tax (SCT) is a type of excise tax that applies to the production or importation of specific goods and the provision of certain services.
This tax is paid by the enterprises directly producing the goods but the consumers are taxpayers because the tax is added to the selling price. 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.
Under the current regulations, the special consumption tax on imported goods is calculated keeping in mind their cost, insurance, and freight (CIF) value plus current import tariff.
Goods and services bearing SCT in Vietnam are:
- Goods: cigarette 65% ; alcohol (level < 20 degree: 25% ; level > 20 degree: 50%); car; Air conditioners of 90,000 BTU or less; Leaves, Code.
- Service: Discotheque business; Business massage (massage), karaoke (karaoke); Casinos; Award-winning electronic games include jackpot games, slots and similar machines; Business betting; Golf business includes the sale of membership cards, golf tickets; Lottery business.
The imported tax on automobiles and air conditioners would be lower to zero under the country’s commitment to international integration.
Goods are exempt from SCT:
- Goods manufactured 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;
- Airplanes and yachts for sale and transport of passenger and goods;
- Ambulances, hearses and automobiles with more than 24 seats;
- Goods imported to non-duty areas, or domestic goods sold to non-duty areas (exclusive of automobiles with fewer than 24 seats).
In case that the 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.