CHAPTER 1.

AN OVERVIEW ABOUT TAXATION

1.1. Concept and characteristics of tax
*Concept of Tax
- Taxes are compulsory levies (khoản thu bắt buộc) made by public authorities for which
nothing is received directly in return. They are used in part to provided public goods.
(Milan Dictionary of Accounting)
-Tax as a payment of money legally demaded by a government authority to meet public
expenses.
(The Longman Dictionary of Business English)
- Tax is a part of income which is legally stipulated and compulsorily paid by citizens to the
government in order to finance the public expenditures.
- Nature of tax:
+ Economic aspects: monetary relations between the State and legal entities and natural
persons.
+ Social aspects: the transfer of income is compulsory
+ Legal aspects: prescribed by law
*Characteristics of tax
- Compulsory payment
+ Firstly, the voluntary mode cannot be applied.
+ Secondly, mandatory is not criminal.
+ Thirdly, it is necessary to ensure financial resources for the State to provide public goods.
+ Fourthly, all entities and individuals are to pay taxes to the State Budget.
- Indirect compens ation: chi trả gián tiếp
+ The State indrectly returns taxpayers via public services.
- High legality
+ The State uses political power to form a legal basis for taxation to force citizens to
“voluntarily” pay taxes.
-Law and ordinances (National Assembly); Decree, decision (Government)
-Circulars and Decisions (Ministry of Finance)
-Decision, dispatch (General Department of Taxation, General Department of
Customs)
+ The State uses administrative enforcement to organize and ensure legal compliance with
taxes in society.
+ Taxpayers do not have the right to refuse to pay taxes, self-agreement but only the right to
comply with tax law.
1.2. The role of taxes
*Mobilizing financial resources for the State Budget
-Taxes and mobilized financial resources of the State
-Taxes make up an increasing proportion of the State Budget.
+ Proportion of collection revenue form tax.
+ Create regular and relatively stable revenues for the State budget
-Wide range of adjustment
-Taxes mobilized from a part of GDP
- Simply, a few conditions bound for the State.
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- Through tax collection, the State obtained feedback of the economy in the management
process.
*Macroeconomic adjustment
-Tax is a tool of fiscal policy to stabilize prices and control inflation.
-Tax is a tool of fiscal policy to stimulate economic growth and create jobs.
- Tax is a tool of fiscal policy that contributes to the regulation of the nation’s balance of
payments.
- Tax is a tool of fiscal policy to redistribute income in society, improve equity in society.
1.3. Tax system
* Concept
The modern view states that tax system is a complex of all taxes and the system of tax
administration of a state which have interactive relations.
* Tax classification
- Classification by taxable subjects: đối tượng thuế
+ Consumption tax: the subject is the part of income used for consumption in the current
period
-Value added tax, excise tax, environmental protection tax
+ Income tax: the taxable object is the income level
-Corporate income tax, personal income tax
+ Property tax: the taxable subject of tax is the value of a property kept or transferred.
- Classification by taxation method
+ Direct taxes: thuế trực thu: The State collects taxes directly from income-generating
organizations and individuals.
+ Indirect taxes: thuế gián thu: The state collects taxes from organizations and individuals
that earn income through the price of goods and services in commercial transactions.
- Classification according to the scope of tax authority
+ Central tax: issued by the central level and uniformly managed. (Do trung ương ban hành)
+ Local taxes: issued by the local authorities and uniformly managed. (Do địa phương ban
hành)
*The standards to build the tax system
- Standard of Equity
+ Horizontal equity
+ Vertical equity
- Standard of Efficiency
The efficiency of intervention on the economy is greatest
+ Minimize the negative effects of taxes on mobilization and allocation of economic
resources.
+ Efficiency in Tax collection organization is greatest
- Direct costs of tax authorities (cost for tax collection)
- Indirect costs (compliance costs of taxpayers)
- Tax revenue is best collected on the basis of the lowest administrative cost.
- Standard of Adaptability
+Adaptation easily to changes in the economic situation.
-Adjusted mechanism of legal basis.
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 -Mechanism in performing the tax collection structure.
- Standard of Transparency
+The legal basis for taxation must be easy to understand and not to have multiple meanings.
+Collecting taxes must be specified in a process.
+The legal basis and produce for collecting taxes must be disclosed (published) to the public.
1.4. Basic elements of tax law
- Name of a tax: each tax has a unique name and is passed by the National Assembly in the
corresponding tax law.
- Taxpayer: are legal entities or natural persons covered by the tax law are responsible for
paying taxes to the state.
- Taxable object: Specify the basis for taxation, including: goods, services, or income or
assets.
- Tax base: the criteria on which the tax amount can be determined.
- Tax rate: show the level of State encouragement compared to the tax base. Classification
by form of values and value trend.
+ Absolute tax rate (tax rate): the tax rate is calculated y the absolute number per unit of
taxable object.
+ Relative tax: Calculated by the percentage on the basis of tax calculation.
- Tax Rate: value orientation
+ Uniform tax rates: fixed tax rates are the same for all taxable subjects, regardless of the
tax base.
+ Stable tax rates: tax rates are prescribed according to a certain percentage equally on the
basis of tax calculation.
+ Progressive tax rates: the payable tax rates increase gradually according to the increase
of tax establishments.
-Simple progressive taxable: dividing the tax calculation basis into different taxable
levels, for each taxable level, the tax amount must be specified with absolute
numbers.
-Apart of progressive tax tariff: Tax rate increases on each increase of the tax base.
-Full progressive tax tariff: Tax rates increase on the whole increase in the tax base.
-Tax level of regressive tax rates: is the tax rate to be reduced gradually according to
the increase of the tax calculation establishment
- Incentives
- Tax exemption, tax reduction:
+ Tax exemption: Non taxable object to tax or 0% tax rate.
+ Tax reduction: Reducing the payable tax amount against the general provisions of tax
law.

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4
 CHAPTER 2. CUSTOMS DUTY – THUẾ QUAN
*TLTK: Thue 2024, nghi dinh 134…
*ICC: international commercial contract
*Ng chịu thuế: ng tiêu dùng cuối cùng (buyer)
Ng nộp thuế: ng bán hàng (seller)
=> phát sinh khi có giao dịch thương mại
1. CONCEPT AND CHARACTERISTICS OF CUSTOMS DUTY
*CONCEPT: Import and export duty is the tax imposed on export or import goods in
international trade relations.
*CHARACRETISTICS:
- Indirect tax: Customs duty is levied on imported and exported goods. Taxpayers are
importers or exporters but the burden of customs duty falls on the consumers. In most cases,
taxpayers (traders or companies) are not coincided with consumers of goods. In some rare
cases, importers are also consumers. Being an indirect tax, customs duty of course is
regressive
+ Example:
When Vietnam imports electronic goods such as smartphones, the customs duty is
imposed on the importing companies (e.g., Samsung Vietnam). However, these
companies pass on the cost of the customs duty to consumers by incorporating it into
the final retail price.
=> Result: The burden of the customs duty is ultimately borne by the end consumers,
not the importing company, making customs duty an indirect tax. In some rare cases, if
a company imports goods for its own use (e.g., a car imported by an individual or a
company for personal use), the importer and the consumer are the same.
- A tax that is directly influenced by international factors: In a global integration era, each
country has many relations to the rest of the world. These relations are mainly concerning to
economic issues among which many are related to customs duty. A bilateral or multilateral
agreement often requires a country to comply with many commitments and these often deal
with customs duty such as import duty rate, customs procedures, and defining of taxable price
of imported goods.
Example:
 Vietnam's WTO Membership: When Vietnam joined the World Trade Organization
(WTO), it had to reduce import duty rates on certain goods (e.g., textiles, agricultural
products, machinery) from WTO member countries as part of its trade commitments.
 Similarly, under the ASEAN Free Trade Agreement (AFTA), Vietnam lowered import
tariffs on goods from other ASEAN countries to promote regional trade.
 Impact: These international agreements directly influenced Vietnam's customs tax
policies, including tax rates, valuation methods, and customs procedures.
- A tax related with foreign trade activities: Customs duty has a considerable impact on the
turnover of imported or exported goods. High tax on certain imported goods may discourage
importation. Foreign trade can also affect customs duty. The more of the goods are imported
or exported, the more of tax revenue a country gets. The more complicated and diversified the
foreign activities are, the more detailed and stricter the law on customs duty is.
Example:

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  High Customs Duty Discourages Importation: Vietnam imposes high customs duties
on luxury items such as cars and wine to discourage excessive importation of non-
essential goods. This reduces the turnover of these imported goods.
 Impact of Foreign Trade Growth on Revenue: As Vietnam’s foreign trade activities
grow (e.g., more imports of machinery for manufacturing and more exports of
agricultural products), the customs duty revenue for the government also increases
significantly.
 For instance, increased exports of rice to the Philippines or imports of electronic
components from China directly affect the volume of customs duties collected.
- customs duty is a consumption tax: The base of this tax normally is the value of
commodities imported or exported. This means that its base is the income used for
consumption. it is applied to imported goods when they are brought into the domestic market
for consumption. The primary purpose of this tax is to target the end consumers of the goods,
increasing the final price and thereby encouraging the consumption of domestically produced
goods. Initially, the importer is responsible for paying the customs duty when the goods are
cleared through customs. However, this cost is typically passed on to the end consumers
through the final selling price of the product.
Example: A company imports cars from abroad into Vietnam. Upon customs clearance, the
company must pay customs duty, for instance, 30% of the import value of the car. If the car's
import value is USD 20,000, the customs duty would amount to USD 6,000. The company
then sells the car in the domestic market at a price that includes the customs duty. As a result,
the end consumer has to pay a higher price to own the car, effectively making customs duty a
type of consumption tax levied on them.

*ROLES:
- An important tool of the state of control foreign trade activities: Customs duty serves as
a vital tool for governments to control the flow of imported and exported goods, helping to
regulate trade balances and ensure economic security. High import duties can restrict the
importation of non-essential goods or protect national resources. Conversely, low or zero
import duties can encourage the importation of essential raw materials, machinery, or
promote the export of strategic goods.
Example:
+ Controlling Luxury Imports: Vietnam imposes high import duties on luxury goods like cars
(70-75%) and foreign wines (45-50%, including special consumption tax) to ease trade
balance pressure and curb excessive consumption. In 2022, customs duties on imported cars
contributed significantly to the national revenue while controlling the influx of high-end
vehicles from Europe and Japan.
+ Encouraging Essential Imports: Low import duties (0-5%) on production materials such as
textiles help businesses reduce costs and improve export competitiveness. Vietnam's textile
and garment sector, for instance, leveraged this policy to achieve $44 billion in export
turnover in 2022.
According to Vietnam Customs, the country's total import-export turnover in 2022 was
$732.5 billion, with effective customs policies contributing to a trade surplus of $11.2 billion.
- Tool of a domestic production protection: Customs duty acts as a shield to protect
domestic industries from unfair competition posed by cheap imported goods. This is
particularly crucial for developing or vulnerable industries. Higher import duties on specific

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goods provide domestic businesses with time and conditions to improve production capacity
and market competitiveness.
Example:
+ Steel Industry: To protect the domestic steel industry from the influx of cheap Chinese
steel, Vietnam imposed anti-dumping duties ranging from 10-25% on cold-rolled and sheet
steel products. As a result, companies like Hoa Phat and Nam Kim maintained stable
production and increased revenue. Specifically, Hoa Phat Group recorded a revenue of $6.3
billion in 2022, a 10% increase compared to the previous year.
+ Agricultural Products: The government levies high import duties on fruits and vegetables,
such as apples and grapes (40%), to support local farmers. This helps domestic fruits like
dragon fruit and mango retain their position in the domestic market.
- A revenue of state budget: Customs duty is one of the primary sources of national revenue,
particularly in developing countries where domestic tax systems are not yet robust. The
revenue is used to fund national development programs, including infrastructure, healthcare,
education, and public services.
Example:
+ Vietnam's Revenue Contribution: In 2022, customs duty contributed $18.8 billion (440
trillion VND) to Vietnam's national budget, accounting for 16% of total national revenue.
Major contributing items included:
o Imported cars: With import duties ranging from 70-75%, this is one of the
largest contributors to customs revenue.
o Petroleum: Import duties on petroleum products (5-10%) generated significant
revenue amid rising global energy prices.
o Electronics: Imported electronic components and manufacturing equipment also
contributed substantially to the budget.

2. BASIC CONTENT OF THE CURRENT IMPORT AND EXPORT DUTY LAWS IN

VIETNAM
2.1. SCOPE OF APPLICATION
*TAXABLE OBJECTS (luật thuế xuất nhập khẩu 2016) (Đối tượng chịu thuế)
1.Goods exported and imported through Vietnam’s border gates include: Goods
exported and imported through land, river, seaports, airports, international intermodal
railways, international post offices and other customs clearance places established under
decisions of competent state agencies.
Example:
 Imported goods: A company imports electronic components from China through the
Hữu Nghị Border Gate in Lạng Sơn Province. The shipment includes microchips used
in manufacturing consumer electronics in Vietnam. When the goods are brought into
Vietnam, customs duties are applied based on the value and type of the imported
components.
 Exported goods: A Vietnamese coffee producer exports roasted coffee beans to Europe
through the Hải Phòng Port. These coffee beans are subject to customs regulations,
and while export duties may not apply in some cases, other fees or charges could be
assessed depending on trade agreements and product classifications.
2. Goods brought from the domestic market into the non-tariff zone and from the non-
tariff zone to the domestic market: Non-tariff zones include: export processing zones,
export processing enterprises, tax suspension warehouses, tax suspension areas, bonded
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warehouses, special economic and commercial zones, trade - industrial zones and other
economic areas. established under the Prime Minister's Decision, having an exchange of
goods trading between this zone and the outside is an export and import relationship.
3. Other trade
1. Hàng hóa xuất khẩu, nhập khẩu qua cửa khẩu Việt Nam bao gồm: Hàng hóa xuất
khẩu, nhập khẩu qua đường bộ, đường sông, cảng biển, sân bay, đường sắt liên vận
quốc tế, bưu điện quốc tế và các địa điểm làm thủ tục hải quan khác được thành lập
theo quyết định của cơ quan nhà nước có thẩm quyền.
2. Hàng hoá từ thị trường trong nước đưa vào khu phi thuế quan và từ khu phi thuế
quan vào thị trường trong nước: Khu phi thuế quan bao gồm: khu chế xuất, doanh
nghiệp chế xuất, kho bảo thuế, khu bảo thuế, kho ngoại quan , khu kinh tế - thương
mại đặc biệt, khu thương mại - công nghiệp và các khu kinh tế khác. được thành lập
theo Quyết định của Thủ tướng Chính phủ, có hoạt động trao đổi mua bán hàng hóa
giữa khu này với bên ngoài là quan hệ xuất nhập khẩu.
3. Thương mại khác
*Non taxable objects (Đối tượng ko chịu thuế)
1. Goods transported in transit or transited through Vietnamese border gates according to law
provisions
2. Goods are part of petroleum belonging to the State's royalty when exported.
3. Humanitarian aid goods, non-refundable aid goods of the Governments, United Nations
organizations, intergovernmental organizations, international organizations and foreign non-
governmental organizations (NGO), foreign economic organizations or individuals for
Vietnam and vice versa:
- for socio-economic development, or for other humanitarian purposes, to be carried out
through official instruments between the Parties, approved by competent authorities;
- humanitarian assistance and emergency relief to remedy consequences of wars, natural
disasters and epidemics.
4. Goods exported from non-tariff areas to foreign countries; goods imported from abroad
into non-tariff areas and only used in non-tariff areas; goods brought from one non-tariff area
to another.
1. Hàng hóa vận chuyển quá cảnh, quá cảnh cửa khẩu Việt Nam theo quy định của
pháp luật
2. Hàng hóa là một phần xăng dầu thuộc thuế nhà nước khi xuất khẩu.
3. Hàng viện trợ nhân đạo, hàng viện trợ không hoàn lại của Chính phủ, tổ chức Liên
hợp quốc, tổ chức liên chính phủ, tổ chức quốc tế, tổ chức phi chính phủ (NGO) nước
ngoài, tổ chức kinh tế, cá nhân nước ngoài cho Việt Nam và ngược lại:
- để phát triển kinh tế - xã hội hoặc vì các mục đích nhân đạo khác, được thực hiện
thông qua các văn kiện chính thức giữa các Bên, được cơ quan có thẩm quyền phê
duyệt;
- Hỗ trợ nhân đạo, cứu trợ khẩn cấp khắc phục hậu quả chiến tranh, thiên tai, dịch
bệnh.

8
 4. Hàng hóa từ khu phi thuế quan xuất khẩu ra nước ngoài; hàng hóa từ nước ngoài
nhập khẩu vào khu phi thuế quan và chỉ sử dụng trong khu phi thuế quan; hàng hóa
được đưa từ khu phi thuế quan này sang khu phi thuế quan khác.
*Taxpayer
- Owner of export and import goods
- Organizations entrusted to export of import goods
- Individuals who have export or import goods upon exit or entry; send or entry; send or
receive goods via Vietnam’s border gates.

2.2. BASES FOR CALCULATING IMPORT AND EXPORT TAXES

2.2.1. GOODS APPLY TO A TAX RATE OF PERCENTAGE
Customs duty = quantity x customs value x rate of customs duty x foreign currency
rates
- Quantity of import and export goods: The quantity of each actual import and export item
stated in the customs declaration.
Taxable price of each item
+ For exports: The selling price at the export border gate (FOB: Free On Board, DAF:
Delivered At Frontier)
+ For imported goods: The actual price to be paid is calculated up to the first import border
gate and sequentially determined according to 6 methods of customs value determination.
Six valuation methods
 Method is transaction value of goods
 Method is transaction value of identical goods
 Method is transaction value of similar goods
 Method is deductive value
 Method is computed value
 Residual or fallback method
* RATE OF TAX
- Rules for rate of tax: Goods that need to encourage export, so application of low tax rates
and vice versa.
- Tax rates for exported goods are specified for each item in the Export Tariff.
- Tax rates for imported goods are specified for each item, including:
+ Preferential tax rates: applied to imported goods originating from countries, groups of
countries or territories which have most favored nation treatment in trade relations with
Vietnam. Preferential tax rates are specified for each item in the Preferential Import Tariff.
Example: A company in Vietnam imports steel from South Korea. Since both Vietnam and
South Korea are members of the WTO, the imported steel qualifies for the preferential tax
rate of 10% under Vietnam's tariff schedule.
+ Thuế suất ưu đãi: áp dụng đối với hàng hóa nhập khẩu có xuất xứ từ nước, nhóm
nước hoặc vùng lãnh thổ có đối xử tối huệ quốc trong quan hệ thương mại với Việt
Nam. Thuế suất ưu đãi được quy định cụ thể cho từng mặt hàng tại Biểu thuế nhập
khẩu ưu đãi.
+ Special preferential tax rates: applicable to imported goods originating from countries,
groups of countries or territories which carry out most-favored nation treatment in trade
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relations with Vietnam according to the rules of the free trade region, customs union or to
facilitate border trade and other special offers;
Conditions for applying special preferential tax rates:
 Must be the items specified in an agreement signed between Vietnam and a country,
group of countries or territories that apply special tax incentives and must fully meet
the conditions stated in the agreement;
 Must be goods originating from a country, group of countries or territories to which
Vietnam is a party to special tax preferential agreements.
Example: A Vietnamese company imports fruit from Thailand under the ATIGA. Since both
Vietnam and Thailand are ASEAN members and meet the rules of origin requirements, the
fruit is subject to a special preferential tax rate of 0% instead of the regular preferential tax
rate of 5%.
+ Thuế suất ưu đãi đặc biệt: áp dụng đối với hàng hóa nhập khẩu có xuất xứ từ nước,
nhóm nước, vùng lãnh thổ thực hiện đối xử tối huệ quốc trong quan hệ thương mại với
Việt Nam theo quy định của khu vực mậu dịch tự do, liên minh thuế quan hoặc nhằm tạo
thuận lợi cho thương mại biên giới và ưu đãi đặc biệt khác;
Điều kiện áp dụng thuế suất ưu đãi đặc biệt:
• Phải là các mặt hàng được quy định tại Hiệp định ký kết giữa Việt Nam với một nước,
nhóm nước hoặc vùng lãnh thổ áp dụng ưu đãi đặc biệt về thuế và phải đáp ứng đầy đủ
các điều kiện nêu tại Hiệp định;
• Phải là hàng hóa có xuất xứ từ nước, nhóm nước hoặc vùng lãnh thổ mà Việt Nam là
thành viên của Hiệp định ưu đãi thuế đặc biệt.
+ Normal tax rates (Ordinary tax rate): applied to goods imported from countries, groups of
countries or territories which do not apply most favored nation treatment and do not apply
special preferences on import tax to Vietnam.
The uniformly applied ordinary tax rate is 150% of the preferential tax rate of each goods
item specified in the Preferential Import Tariff.
Example: A company in Vietnam imports textiles from a non-WTO member country, such as
North Korea. Since there is no trade agreement or MFN status between Vietnam and North
Korea, the imported textiles are subject to a normal tax rate, which is typically 150% of the
preferential tax rate. If the preferential rate is 10%, the normal rate would be 15%.
+ Thuế suất thông thường (Thuế suất thông thường): áp dụng đối với hàng hóa nhập
khẩu từ nước, nhóm nước hoặc vùng lãnh thổ không áp dụng Đối xử tối huệ quốc và
không áp dụng ưu đãi đặc biệt về thuế nhập khẩu vào Việt Nam.
Thuế suất thông thường áp dụng thống nhất là 150% mức thuế suất ưu đãi của từng
mặt hàng quy định tại Biểu thuế nhập khẩu ưu đãi.

2.2.2. GOODS APPLY TO ABSOLUTE TAX

Customs duty = quantity x absolute tax are specified on a tie unit

2.3. TAX REFUND, TAX DEDUCTION, IMPORT AND EXPORT TAX REDUCTION
2.3.1. TAX EXEMPTION: CÁC TH MIỄN THUẾ
Điều 16, luật thuế xuất nhập khẩu 2016
Nghị định 134, 2016. Điều 5 đến 32
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 1. Goods temporarily imported for re-export or temporarily exported for re-import for
participation in fairs, exhibitions or product launches; machinery, equipment and
professional tools temporarily imported for re-export or temporarily exported for re-
import in service of work within a certain period of time.
+ After the expiration of the exhibition, product introduction or end of work as
prescribed by law, temporarily exported goods must be re-imported into Vietnam and
temporarily imported goods must be re-exported to foreign.
2. Goods being movable assets of Vietnamese or foreign organizations and individuals
brought into Vietnam or brought abroad within the prescribed limits.
3. Imported and exported goods of foreign organizations and individuals enjoying
diplomatic privileges and immunities in Vietnam.
4. Goods imported for processing for foreign parties are exempt from import tax and
when returning products to foreign parties are exempt from export tax.
2.3.2. CONSIDERATION OF TAX EXEMPTION
1. Imported goods being special-use goods directly serving national defense, security,
education, training and scientific research (except for the case specified in Clause 13, Article
12 of the Decree) are considered for import tax exemption. password.
2. Goods being presents, gifts and sample goods of foreign organizations and individuals to
Vietnamese organizations and individuals or vice versa are considered for tax exemption
within the norms.
3. If exported or imported goods being under the supervision of customs offices are damaged
or lost, which are assessed and certified by competent agencies or organizations, they shall be
considered for tax reduction corresponding to billion actual loss of goods.
The customs office shall base itself on the amount of lost goods and the actual loss rate of the
goods inspected and certified for tax reduction.

2.3.3. TAX REDUCTION

20. Imports directly serving education that cannot be domestically produced.
21. Imported goods dedicated machinery, equipment, components, supplies that cannot be
domestically produced, scientific materials serving scientific research, technological
development, technological cultivation, cultivation of science and technology enterprises and
technological innovation.
22. Imported goods dedicated products directly serving national defense and security, the
vehicles among which must be those that cannot be domestically produced. 23. Exported and
imported goods serving assurance of social security, recovery from disasters, epidemics, and
other special situations

2.3.4 REFUND OF CUSTOMS DUTY

1. Import goods for which import tax has been paid but which are still stored and stored at the
border gate and are under the supervision of the customs office, are re-exported to foreign
countries.
2. Export and import goods for which export tax and import tax have been paid but not
exported or imported.

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3. Goods for which export or import tax has been paid but which are actually exported or
imported less.
4. If goods imported for production of export goods or exported into non-tariff areas are
already paid import tax, they shall be refunded tax in proportion to the actual percentage of
products actually exported and not subject to export tax for Exported goods are eligible to be
determined to be processed from all imported raw materials.
5. Goods for which import tax has been paid and which are then exported in the following
cases:
+ Goods imported for delivery and sale to foreign countries through agents in Vietnam;
+ Goods imported for sale to vehicles of foreign firms operating on international routes via
Vietnamese ports and Vietnamese vehicles operating on international routes according to the
Government's regulations.
6. Goods that have been exported but must be imported back to Vietnam shall be considered
for refund of the paid export tax and not the import tax.
7. Goods imported but must be re-exported to foreign goods owners or re-exported to third
countries or exported into non-tariff areas will be considered for refund of the paid import tax
corresponding to the actually re-exported quantity and Do not pay export tax.

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 CHAPTER 3. EXCISE TAX: THUẾ TIÊU THỤ ĐẶC BIỆT
3.1.GENERAL INTRODUCTION OF EXCISE TAX
*Concept
Excise tax is a tax imposed on a number of special goods and services on the list of state
regulations.
Thuế tiêu thụ đặc biệt là sắc thuế đánh vào một số hàng hóa, dịch vụ đặc biệt nằm trong
danh mục nhà nước quy định.
*CHARACTERISTICS
- The production and consumption of goods and services do not really facilitate in social
life. (Việc sản xuất và tiêu dùng hàng hóa, dịch vụ chưa thực sự thuận lợi trong đời sống xã
hội.)
Excise tax is typically imposed on goods and services that are non-essential or have negative
societal impacts. These products, though popular, do not contribute positively to social
development.
+ Goods: Alcohol, beer, tobacco, luxury cars, gasoline.
+ Services: Casinos, karaoke, and gambling activities.
hese goods often have negative impacts on public health, the environment, or social order. As
such, excise tax serves as a mechanism to regulate consumption behaviors, encouraging
individuals to make choices that are more beneficial for society and the environment. The
high tax rates aim to limit the production and consumption of these goods, reducing their
negative impacts such as addiction, environmental pollution, and social issues.
Example: In Vietnam, passenger cars with engines larger than 2.5L are subject to excise tax
rates ranging from 50% to 150%. This policy seeks to limit the use of large, fuel-intensive
vehicles that contribute to environmental pollution.
- Demand for these goods usually fluctuates with income and less with price.
Goods subject to excise tax generally have low price elasticity of demand. This means that
even when prices increase (due to taxation), consumption levels only decrease slightly,
particularly among high-income groups. However, demand is more sensitive to changes in
income: as income increases, so does the consumption of these goods.
+ High-income consumers are more likely to continue using highly taxed products (such as
imported liquor or luxury cars), regardless of price increases.
+ Low-income consumers may reduce consumption when prices rise significantly.
Example: In Vietnam, despite an increase in excise tax on beer from 55% (2015) to 65%
(2018), consumption levels remained high. According to the WHO, in 2020, Vietnam led
Southeast Asia in beer consumption, averaging 8.3 liters per person per year.
- These goods and services need to be restricted from consumption because of health,
environmental and social reasons.
Excise tax serves as a policy tool to regulate consumption and mitigate negative impacts.
These reasons include:
+ Health: Alcohol, beer, and tobacco are major contributors to diseases such as cancer,
cardiovascular, and lung illnesses.
+ Environment: Gasoline and fuel-intensive cars contribute to air pollution.
+ Social: Services such as casinos and karaoke can lead to social issues like gambling
addiction.
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These goods often have negative impacts on public health, the environment, or social order.
As such, excise tax serves as a mechanism to regulate consumption behaviors, encouraging
individuals to make choices that are more beneficial for society and the
environment.Governments often use excise tax revenue to fund health and environmental
protection programs.
Example: In Europe, carbon taxes, a form of excise tax, are applied to gasoline to reduce
greenhouse gas emissions.
- As a consumption tax, it is an indirect tax: là thuế gián thu
Excise tax is an indirect tax, meaning the final consumer bears the tax burden through higher
prices, but businesses (producers or importers) are responsible for paying the tax directly to
the government.
+ Impact on prices: Businesses pass the tax cost to consumers by increasing product prices.
+ Ease of tax management: Collecting tax from producers or importers reduces
administrative costs for tax authorities.
This simplifies the tax collection process, as it is levied at a single point rather than being
collected from individual consumers.
Example: When purchasing a bottle of liquor, the price includes excise tax. Consumers pay a
higher price, but the producer or importer directly submits the tax to the government.
- Collected at one time in the production or importation of goods or services business:
Được thu một lần vào khâu sản xuất hay nhập khẩu hàng hóa hoặc kinh doanh dịch vụ
Excise tax is collected only once, either at the production or importation stage. This prevents
"tax-on-tax" situations across intermediate stages and ensures stable revenue at the source.
The excise tax is imposed at a single point in the supply chain, typically during production or
importation. This reduces administrative complexity by concentrating the collection process
on manufacturers or importers rather than retailers or individual consumers. This streamlined
approach ensures efficiency in tax administration and reduces potential gaps in compliance.
Example: In Vietnam, domestic alcohol producers pay excise tax at the production stage with
a tax rate of 65%.
- A high level of collection revenue through high excise taxed rates: Mức thu cao thông
qua thuế suất thuế tiêu thụ đặc biệt cao
Excise tax rates are typically higher than other types of taxes, such as value-added tax (VAT).
The purpose is to increase product prices, thereby discouraging consumption and generating
significant government revenue. This feature makes it an important source of funding for
public services and infrastructure development. By targeting goods with inelastic demand,
such as alcohol or tobacco, governments can achieve both fiscal objectives and policy goals,
such as discouraging consumption.
Example: In Vietnam, luxury cars are subject to excise tax rates ranging from 90% to 150%,
making their prices significantly higher.
- The list of goods and services imposed is limited and varies depending on socio-
economic development conditions and living standards of the citizens: Danh mục hàng
hóa, dịch vụ chịu thuế TTĐB không nhiều và thay đổi tùy thuộc vào điều kiện phát triển kinh
tế -xã hội và mức sống của dân cư.
The list of goods and services subject to excise tax is periodically revised to align with socio-
economic goals. As living standards rise, new items may be added to the list, particularly

14
those that pose new health or environmental challenges. The scope of excise tax is typically
restricted to specific goods and services, with the selection based on each country's socio-
economic priorities and development levels. This flexibility allows governments to tailor
excise tax policies to address current challenges, such as public health concerns or
environmental sustainability, while ensuring the tax aligns with the population's living
standards and consumption habits.
Example: Many countries are considering imposing excise tax on single-use plastics and
sugary beverages due to their harmful effects on the environment and public health.

*ROLE
- An important source of consumption tax and a huge revenue for the State budget. Là
nguồn thu quan trọng của thuế tiêu dùng, tạo ra nguồn thu rất lớn cho ngân sách nhà nước.
+ Excise tax serves as a critical source of government revenue, particularly in economies that
rely heavily on consumption taxes. By targeting specific goods and services—often those
with inelastic demand—excise tax ensures a steady and reliable income stream for public
expenditures. These products, including alcohol, tobacco, fuel, and luxury goods, are
consumed regularly, even when their prices rise due to taxation. This makes excise tax an
effective tool for stabilizing government budgets, particularly during economic downturns
when income tax revenues may decline.
For instance, in Vietnam, excise tax on petroleum products, alcohol, and tobacco contributed
approximately 15% of the total state budget in 2022, amounting to billions of U.S. dollars.
This revenue funds critical sectors such as healthcare, education, and infrastructure
development. Similarly, in the United States, excise taxes on gasoline and aviation fuel help
finance transportation infrastructure, including highway construction and airport
maintenance. These funds are essential for maintaining public services and ensuring the
sustainable growth of national economies.
+ Moreover, excise taxes provide governments with a flexible source of revenue that can be
adjusted to meet specific fiscal needs. In times of budget deficits, increasing excise tax rates
on luxury goods or harmful products can quickly generate additional income without
requiring complex administrative changes. For example, during the COVID-19 pandemic,
several countries, including India and South Africa, raised excise taxes on tobacco and
alcohol to offset declining revenues from other sectors.
- An important tool for the purpose of guiding the production and consumption of
specific goods and services. Là công cụ quan trọng thực hiện mục đích hướng dẫn sản xuất,
tiêu dùng hàng hóa được coi là đặc biệt.
Excise tax is a powerful regulatory tool used by governments to influence production and
consumption patterns. By imposing higher taxes on harmful or socially undesirable products,
policymakers can discourage their use and encourage healthier, more sustainable alternatives.
This role is particularly significant in addressing public health issues, environmental
concerns, and social challenges.
+ Public health: One of the primary targets of excise tax is products that pose significant
health risks, such as tobacco, alcohol, and sugary beverages. High excise taxes on these
goods aim to reduce their affordability and, consequently, their consumption. For example, in
Nordic countries like Norway and Sweden, excise tax on alcohol is among the highest in the
world, leading to significantly lower per capita alcohol consumption compared to other
European nations. Similarly, Mexico introduced a tax on sugary drinks in 2014, resulting in a

15
7.6% decrease in soda consumption in the first year and contributing to efforts to combat
obesity and related health issues.
+ Environmental Protection: Excise tax is also a key instrument for addressing environmental
concerns. Taxes on carbon emissions, fossil fuels, and plastic products incentivize businesses
and consumers to adopt environmentally friendly practices. In the European Union, excise
taxes on diesel fuel and carbon emissions have led to a reduction in greenhouse gas emissions
from transportation. Additionally, several countries, including Kenya and Rwanda, have
implemented excise taxes on single-use plastics, significantly reducing plastic waste and
environmental degradation.
+ Social behaviour: Excise tax can also influence social behavior by discouraging activities
associated with societal harm, such as gambling and luxury consumption. High taxes on
casino operations, for example, aim to limit the proliferation of gambling-related issues while
generating revenue to address its social costs. In Singapore, the excise tax on luxury cars
discourages excessive car ownership and promotes the use of public transportation,
alleviating traffic congestion and reducing urban air pollution.
- An important tool of the income redistribution in society. Góp phần quan trọng trong
việc tái phân phối thu nhập của người có thu nhập cao, đảm bảo công bằng xã hội.
+ Excise tax plays an essential role in promoting income equity by redistributing wealth
across different socioeconomic groups. By targeting luxury goods and services that are
primarily consumed by high-income individuals, excise tax ensures that the wealthier
segments of society contribute proportionally more to government revenues. This revenue is
then used to fund programs that benefit lower-income groups, such as healthcare, education,
and social welfare.
For instance, in Vietnam, luxury cars with engine capacities above 3.0 liters are subject to
excise tax rates as high as 150%, making them significantly more expensive and limiting
their accessibility to affluent consumers. The tax revenue generated is channeled into public
projects, such as building schools and hospitals in rural and underprivileged areas. Similarly,
in the United Kingdom, the tax on private jet flights ensures that high-income individuals
contribute more to environmental and social funds, promoting fairness in taxation.
+ This redistributive effect is particularly important in addressing income inequality, which
has become a pressing issue in many countries. By taxing luxury consumption, governments
can ensure that wealthier individuals bear a greater share of the fiscal burden, enabling
broader social investments that uplift the economically disadvantaged.
For example, in Brazil, excise tax revenue has been used to fund conditional cash transfer
programs like Bolsa Família, which provide financial support to low-income families and
reduce poverty levels.

*DEVELOPMENT OF EXCISE TAX IN VN

- ET was in to force on October 1, 1990 instead of commodity tax. There were 6 items were
imposed: cigarettes, alcohol, beer, firecrackers, playing cards, votive papers sold by
production establishments.
- The excise tax law was amended in 1993. There were 4 types of imposed goods: cigarettes,
alcohol, beer, firecrackers.
- The excise tax law also imposed on imported goods as well from 1995.
- In 1999, the subject expanded include 8 groups of goods and 4 types of services:

16
- Cigarettes, cigars, alcohol, beer, cars of less than 24 seats, gasoline of all kinds, napta,
recombined preparations, other preparations for mixing gasoline, air conditioners with a
capacity of 90000 BTU or less, Playing cards, votive papers.
- Dancing club business (1); Massage, karaoke business (2);
Betting business, horse racing, racing (3); Golf business, sale of membership, golf playing
tickets (4).
• High excise tax rates, the goals of consumption guidelines and adjustments.
• In 1990, the tariff bracket was from 20% to 70%
• In 1999, the tariff bracket was more detailed, from 10% to 75%.
• In 2008, the tariff bracket was more detailed, from 10% to 70%0.
- In 2014, the tariff bracket was more detailed, from 7% to 75%.

3.2. BASIC CONTENT OF EXCISE TAX LAW IN VN

3.2.1. SCOPE OF APPLICATION
* TAXABLE OBJECTS: ĐỐI TƯỢNG CHỊU THUẾ
 Goods：
1. Cigarettes, cigars, and other products derived from tobacco plants
2. Alcohol
3. Beer
4. Cars having fewer than 24 seats
5. Motorcycles, motor tricycles of a cylinder capacity exceeding 125 cm3
6. Aircraft (máy bay riêng)
7. Yachts
8. Gasoline of all kinds, naphtha, reformade components and other components for mixing
gasoline
9. Air conditioners not exceeding 90,000 BTU
10. Playing cards
11. Votive papers: tiền vàng mã
 Services:
1. Dancing club business;
2. Massage, karaoke business;
3. Casino business, electronic casino game business (Casinos; prize-winning video games,
including jackpot and slot games and games on similar machines);
4. Betting business: cá cược
5. Golf course business (Golf business, including the sale of membership cards and golf
playing tickets);
6. Lottery business.
* NON-TAXABLE OBJECTS: ĐỐI TƯỢNG KHONG PHAI CHỊU THUẾ
- Goods which are directly exported by producers or processors or which are sold or
entrusted by these producers or processors to other business establishments for export.
Hàng hóa do người sản xuất, gia công trực tiếp xuất khẩu hoặc do người sản xuất, gia công
bán hoặc ủy thác cho cơ sở kinh doanh khác để xuất khẩu;
- Imported goods, including:

17
 a/ Goods as humanitarian aid or non-refundable aid; gifts for state agencies, political
organizations, socio-political organizations, socio-political-professional organizations, social
organizations, socio-professional organizations or people's armed forces units; and donations
or gifts for individuals in Vietnam within the quotas prescribed by the Government;
b/ Goods transited or transported via Vietnamese border gates or borders, and goods
transported to and from border gates under the Government's regulations:
c/ Goods temporarily imported for re-export and temporarily exported for reimport
which are not subject to import duty or export duty within the time limit specified in the law
on import duty and export duty;
d/ Personal effects of foreign organizations and individuals within diplomatic
immunity quotas; personal belongings within duty-free luggage quotas; and goods imported
for duty-free sale under law;
Hàng hóa nhập khẩu bao gồm:
a) Hàng viện trợ nhân đạo, viện trợ không hoàn lại; quà tặng cho cơ quan nhà nước, tổ chức
chính trị, tổ chức chính trị - xã hội, tổ chức chính trị xã hội - nghề nghiệp, tổ chức xã hội, tổ
chức xã hội - nghề nghiệp, đơn vị vũ trang nhân dân, quà biếu, quà tặng cho cá nhân tại Việt
Nam theo mức quy định của Chính phủ;
b) Hàng hóa vận chuyển quá cảnh hoặc mượn đường qua cửa khẩu, biên giới Việt Nam, hàng
hóa chuyển khẩu theo quy định của Chính phủ;
c) Hàng tạm nhập khẩu, tái xuất khẩu và tạm xuất khẩu, tái nhập khẩu không phải nộp thuế
nhập khẩu, thuế xuất khẩu trong thời hạn theo quy định của pháp luật về thuế xuất khẩu, thuế
nhập khẩu;
d) Đồ dùng của tổ chức, cá nhân nước ngoài theo tiêu chuẩn miễn trừ ngoại giao; hàng
mang theo người trong tiêu chuẩn hành lý miễn thuế; hàng nhập khẩu để bán miễn thuế theo
quy định của pháp luật;
- Aircraft and yachts used for commercial transportation of cargos, passengers and tourists;
Tàu bay, du thuyền sử dụng cho mục đích kinh doanh vận chuyển hàng hoá, hành khách,
khách du lịch
- Ambulances; prison vans; hearses; cars designed with both seats and standing places for
transporting 24 or more people; cars running in recreation, entertainment and spoils areas
which neither are registered for circulation nor move on roads;
Xe ô tô cứu thương; xe ô tô chở phạm nhân; xe ô tô tang lễ; xe ô tô thiết kế vừa có chỗ ngồi,
vừa có chỗ đứng chở được từ 24 người trở lên; xe ô tô chạy trong khu vui chơi, giải trí, thể
thao không đăng ký lưu hành và không tham gia giao thông
- Goods imported from abroad into non-tariff zones, goods sold from the inland into non-
tariff zones for use only in non-tariff zones, and goods traded between non-tariff zones,
except under-24 seat cars.
Hàng hoá nhập khẩu từ nước ngoài vào khu phi thuế quan, hàng hoá từ nội địa bán vào khu
phi thuế quan và chỉ sử dụng trong khu phi thuế quan, hàng hoá được mua bán giữa các khu
phi thuế quan với nhau, trừ xe ô tô chở người dưới 24 chỗ.
* TAXPEYERS: NGƯỜI NỘP THUẾ
- Excise taxpayers include producers and importers of goods and providers of services
which are subject to excise tax.

18
- Exporters that purchase excise tax-liable goods from producers for export and do not
export but sell them domestically shall pay excise tax.
Người nộp thuế tiêu thụ đặc biệt là tổ chức, cá nhân sản xuất, nhập khẩu hàng hóa và kinh
doanh dịch vụ thuộc đối tượng chịu thuế tiêu thụ đặc biệt.
Trường hợp tổ chức, cá nhân có hoạt động kinh doanh xuất khẩu mua hàng hoá thuộc diện
chịu thuế tiêu thụ đặc biệt của cơ sở sản xuất để xuất khẩu nhưng không xuất khẩu mà tiêu
thụ trong nước thì tổ chức, cá nhân có hoạt động kinh doanh xuất khẩu là người nộp thuế
tiêu thụ đặc biệt.

3.2.2. TAX BASES

* TAXED PRICE: The excise taxed price of a goods or service is the goods selling price or
the service charge, exclusive of excise tax, environmental protection tax and value-added tax:
1. For domestically produced goods, it is the selling price set by the producer;
2. For imported goods, it is the import-duty calculation price plus the import duty. For
imported goods eligible for import duty exemption or reduction, it is exclusive of the
exempted or reduced import duty amount;
1. Đối với hàng hóa sản xuất trong nước là giá do cơ sở sản xuất bán ra;
2. Đối với hàng hóa nhập khẩu là giá tính thuế nhập khẩu cộng với thuế nhập khẩu.
Trường hợp hàng hóa nhập khẩu được miễn, giảm thuế nhập khẩu thì giá tính thuế
không bao gồm số thuế nhập khẩu được miễn, giảm;
Tax calculation
Excise tax = taxed price of excise tax x rates of tax
Price exclusive of value added tax−environmental protection tax
Taxed price of ET =
1+ Rate of excise tax(%)
3. For processed goods, it is the taxed price of the goods sold by processing-ordering trader or
the selling price of the product of the same or similar kind at the same time with the time of
goods sale; (Đối với hàng hóa gia công là giá tính thuế của hàng hóa bán ra của cơ sở giao
gia công hoặc giá bán của sản phẩm cùng loại hoặc tương đương tại cùng thời điểm bán
hàng)
4. For goods sold on installment or deferred payment, it is the one-off selling price of such
goods, exclusive of the installment or deferred payment interest; (Đối với hàng hóa bán theo
phương thức trả góp, trả chậm là giá bán theo phương thức bán trả tiền một lần của hàng
hóa đó không bao gồm khoản lãi trả góp, lãi trả chậm)
5. For services, it is the service charge set by the service provider. The service provision in a
number of cases is specified as follows:
o a/ For golf business, it is the selling price of the membership card or golf-playing
ticket, inclusive of the golf playing charge and deposit (if any);
o b/ For casino, prize-winning video game and betting business, it is the turnover
from such business minus the prize already paid to customers;
o c/ For dance hall, massage parlor and karaoke bar business, it is the turnover from
such business.
Đối với dịch vụ là giá cung ứng dịch vụ của cơ sở kinh doanh. Giá cung ứng dịch vụ đối với
một số trường hợp được quy định như sau:

19
a) Đối với kinh doanh gôn là giá bán thẻ hội viên, giá bán vé chơi gôn bao gồm cả tiền phí
chơi gôn và tiền ký quỹ (nếu có);
b) Đối với kinh doanh ca-si-nô, trò chơi điện tử có thưởng, kinh doanh đặt cược là doanh thu
từ hoạt động này trừ số tiền đã trả thưởng cho khách;
c) Đối với kinh doanh vũ trường, mát-xa, ka-ra-ô-kê là doanh thu của các hoạt động kinh
doanh trong vũ trường, cơ sở kinh doanh mát-xa, ka-ra-ô-kê;
6. For goods and services used for barter, internal consumption or donation, it is the excise
taxed price of the goods or service of the same or similar kind at the time of barter, internal
consumption or donation.
 Excise taxed prices of goods and services are inclusive of additional charges and
revenues (if any) enjoyed by business establishments.
 Taxed prices are calculated in Vietnam dong. In case taxpayers have foreign-currency
turnover, foreign-currency amounts must be converted into Vietnam (long at the
average exchange rate on the inter-bank foreign currency market, announced by the
State Bank of Vietnam at the time of turnover generation, for determination of taxed
prices.
Đối với hàng hóa, dịch vụ dùng để trao đổi hoặc tiêu dùng nội bộ, biếu, tặng cho là giá tính
thuế tiêu thụ đặc biệt của hàng hóa, dịch vụ cùng loại hoặc tương đương tại thời điểm phát
sinh các hoạt động này.
 Giá tính thuế tiêu thụ đặc biệt đối với hàng hóa, dịch vụ quy định tại Điều này bao
gồm cả khoản thu thêm, được thu (nếu có) mà cơ sở kinh doanh được hưởng.
 Giá tính thuế được tính bằng Đồng Việt Nam. Trường hợp người nộp thuế có doanh
thu bằng ngoại tệ thì phải quy đổi ngoại tệ ra Đồng Việt Nam theo tỷ giá giao dịch
bình quân trên thị trường ngoại tệ liên ngân hàng do Ngân hàng nhà nước Việt Nam
công bố tại thời điểm phát sinh doanh thu để xác định giá tính thuế.
 Chính phủ quy định cụ thể Điều này.
*TIME OF TAX DETERMINATION
- For goods: The time when a turnover arises for goods (ownership transfer)
- For services: The time when a service generates revenue (service provision completion or
service provision invoice)
- For imported goods: the time of registration of customs declarations
Đối với hàng hóa: Thời điểm phát sinh doanh thu đối với hàng hóa (chuyển giao quyền sở
hữu)
Đối với dịch vụ: Thời điểm phát sinh doanh thu đối với dịch vụ (hoàn thành cung ứng dịch vụ
hoặc thời điểm lập hóa đơn cung ứng dịch vụ)
Đối với hàng hóa nhập khẩu: thời điểm đăng ký tờ khai hải quan
*RATE OF EXCISE TAX
- The excise tax rates for goods and services are specified in the Excise Tax Tariff
- Tax rates vary from 10% to 75%
o The lowest level is 10% (Gasoline of all kinds, air conditioner)
o Average tax rate for services (27.5%), goods (33.4%)
o Common tax rates at (30-40%)
o The highest tax rate at 75% (Tobacco, cigars)

20
Thuế suất thuế tiêu thụ đặc biệt đối với hàng hoá, dịch vụ được quy định theo Biểu thuế tiêu
thụ đặc biệt:
 Thuế suất thay đổi trong khung từ 10% đến 75%
 Mức thấp nhất là 10% (Xăng các loại, điều hòa nhiệt độ)
 Thuế suất trung bình dịch vụ (27,5%), hàng hóa (33,4%)
 Thuế suất phổ biến ở mức (30-40%)
 Thuế suất cao nhất ở mức 75 % (Thuốc lá, xì gà)

3.2.3. TAX REFUND, DEDUCTION AND REDUCTION OF EXCISE TAX

* TAX REFUND
Excise taxpayers may have the paid tax amounts refunded in the following cases:
a/ Goods temporarily imported for re-export:
Goods temporarily imported for re-export are items brought into Vietnam not for domestic
consumption but for re-export to other countries. Since they are not consumed domestically,
these goods are not subject to SCT under domestic tax principles. Refunds in this case
prevent double taxation, ensure fairness, and encourage international trade activities.
For example, a company importing luxury cars for exhibition in Vietnam and subsequently
re-exporting them overseas would be eligible for an SCT refund.
b/ Goods which are raw materials imported for export production and processing;
Raw materials imported for the production or processing of export goods are not subject to
SCT, as the final products are not consumed in the domestic market but exported abroad.
Refunds in this case help reduce production costs and enhance the competitiveness of export
businesses.
For instance, a company importing alcohol as a raw material to blend and produce alcoholic
beverages for export to international markets would be eligible for an SCT refund on the
imported alcohol.
c/ Finalization of overpaid tax amounts upon merger, consolidation, separation, split-up,
dissolution, bankruptcy, ownership change, enterprise transformation or operation
termination;
In cases where businesses undergo legal events such as mergers, consolidations, splits,
dissolutions, or ownership changes, SCT already paid but not fully utilized will be refunded.
This ensures financial rights for businesses and prevents the loss of overpaid taxes during
organizational restructuring or operational termination.
For example, a brewery that dissolves while having overpaid SCT would receive a refund for
the excess amount.
d/ Upon issuance of tax refund decisions by competent agencies under law. and cases of
excise tax refund under treaties to which the Socialist Republic of Vietnam is a
contracting party.
Tax authorities or other competent agencies may issue SCT refund decisions if businesses
meet legal conditions. Additionally, as Vietnam is a party to various trade agreements and
international treaties, SCT refunds in accordance with these agreements ensure compliance
with international commitments, fostering a favorable business environment and international
cooperation.
Người nộp thuế TTĐB được hoàn thuế đã nộp trong các trường hợp sau:
21
a/Hàng tạm nhập khẩu, tái xuất khẩu;
b/Hàng hóa là nguyên liệu nhập khẩu để sản xuất, gia công hàng xuất khẩu; (chỉ thực hiện
đối với hàng hoá thực tế xuất khẩu)
c/Quyết toán thuế khi sáp nhập, hợp nhất, chia, tách, giải thể, phá sản, chuyển đổi sở hữu,
chuyển đổi doanh nghiệp, chấm dứt hoạt động có số thuế nộp thừa;
d/Có quyết định hoàn thuế của cơ quan có thẩm quyền theo quy định của pháp luật và trường
hợp hoàn thuế tiêu thụ đặc biệt theo điều ước quốc tế mà Cộng hòa xã hội chủ nghĩa Việt
Nam là thành viên.

* EXCISE TAX DEDUCTION

Taxpayers that produce excise taxable goods from raw materials for which excise tax has
been paid and that can produce lawful documents on tax payment may have the tax amounts
paid for raw materials deducted upon the determination of payable excise tax amounts at the
stage of production.
Người nộp thuế sản xuất hàng hóa thuộc đối tượng chịu thuế tiêu thụ đặc biệt bằng nguyên
liệu đã nộp thuế tiêu thụ đặc biệt nếu có chứng từ hợp pháp thì được khấu trừ số thuế đã nộp
đối với nguyên liệu khi xác định số thuế tiêu thụ đặc biệt phải nộp ở khâu sản xuất.

*CONDITION OF DEDUCTION
- Receipt of ET payment at the import stage for imported raw materials
- For cases of purchasing raw materials directly from domestic manufacturers:
o Commodity trading contracts; Copy of business certificate of the sales
establishment (signed and sealed)
o Payment vouchers via bank
o Vouchers used as a basis for ET deduction are VAT invoices upon purchase.
-Chứng từ nộp thuế TTĐB khâu nhập khẩu đối với nguyên liệu nhập khẩu
- Đối với trường hợp mua nguyên liệu trực tiếp của nhà sản xuất trong nước:
 Hợp đồng mua bán hàng hóa; bản sao giấy chứng nhận kinh doanh của cơ sở bán
hàng (có chữ ký và đóng dấu)
 Chứng từ thanh toán qua ngân hàng
 Chứng từ để làm căn cứ khấu trừ thuế TTĐB là hóa đơn GTGT khi mua hàng.

*REDUCTION
 Taxpayers that produce excise taxable goods and face difficulties caused by natural
disasters or unexpected accidents are entitled to tax reduction.
 The tax reduction level shall be determined based on the actual extent of damage caused
by natural disasters or unexpected accidents but must neither exceed 30% of the payable
tax amount in the year the damage occurs nor exceed the balance between the value of
damaged assets and the received compensation (if any).
Người nộp thuế sản xuất hàng hoá thuộc diện chịu thuế tiêu thụ đặc biệt gặp khó khăn do
thiên tai, tai nạn bất ngờ được giảm thuế.
Mức giảm thuế được xác định trên cơ sở tổn thất thực tế do thiên tai, tai nạn bất ngờ gây ra
nhưng không quá 30% số thuế phải nộp của năm xảy ra thiệt hại và không vượt quá giá trị
tài sản bị thiệt hại sau khi được bồi thường (nếu có).
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23
 CHAPTER 4. VALUE ADDED TAX
4.1. General introduction of VAT
*CONCEPT:
VAT is a tax calculated on the added value of goods and services arising at each stage of the
process from production, circulation to consumption.
*CHARACTERISTICS OF VAT
- Indirect tax
Legally, VAT payers are those who supply products or provide services, but tax burden is
born by consumers, because VAT is shifted onto buyers via the price of goods and services.
Value-added tax (VAT) is classified as an indirect tax because it is not paid directly by
consumers to the government but is instead collected by businesses at each stage of the
production and distribution process. The tax is embedded in the price of goods and services,
and the end consumer ultimately bears the cost. Businesses act as intermediaries, remitting
the collected VAT to the government while deducting the tax they paid on their inputs (input
VAT). This mechanism simplifies tax collection and ensures a broader tax base, as it is
applied at multiple stages of the supply chain. The indirect nature of VAT allows it to be
seamlessly integrated into pricing, making it less noticeable to consumers, but it ensures that
all taxable transactions contribute to government revenue.
Example: When you buy a TV for 11 million VND, of which 1 million VND is VAT, the
consumer must pay the entire amount, but the selling business will submit a VAT account to
the tax authority. .
- VAT is regressive tax compared to income
+ Consumers of goods or services pay taxes with Flat-tax rate. Regardless of whether the
income is high or low. They pay the same tax rate.
+ Calculated ratio: Payable tax/ Income.
=> Therefore, VAT has less effect on the rich/high income group than on the poor/low income
group.
VAT is often considered a regressive tax when compared to income because it imposes a
uniform tax rate on consumption, regardless of the buyer’s income level. Lower-income
households tend to spend a larger proportion of their income on goods and services subject to
VAT, meaning they effectively pay a higher percentage of their income in VAT than higher-
income households. For instance, a family with a modest income spends most of it on
necessities, which are often taxed, whereas wealthier households save or invest a significant
portion of their income, which is not subject to VAT. This regressive effect can exacerbate
income inequality if no mitigating measures, such as exemptions or reduced rates for
essential goods, are in place. While VAT is an efficient and reliable source of revenue for
governments, its regressive nature highlights the need for complementary policies to protect
low-income groups, such as social assistance programs or tax exemptions for basic goods and
services.
For example: A person with an income of 5 million VND/month buying an item for 1 million
VND (of which VAT is 100 thousand VND) will spend 2% of his income on VAT.
Meanwhile, a person with an income of 50 million VND/month buying the same item only
takes 0.2% of their income to pay VAT.
- VAT is a tax on multiple stages
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+ VAT is imposed on all stages of the production and business process, but only on the value
added part of each stage.
+ The total tax collected for all periods is exactly the same as the tax on the final consumer
price.
VAT is imposed on all phases of production, distribution, but it is only charged on added
value of each phase. It is a consumption tax because it is borne ultimately by the end
consumer. It is not a charge on the supplier. The supplier must add the VAT to the price of
commodities and the buyer pays the total.
Added value is the new value generated in the process production and business activities. It
may be calculated by addition or deduction method. Under the addition method, added value
is determined by summing the profit and wages. According to the deduction method, added
value can be defined as the difference between the selling price and the purchase price of
goods and services.
Total added value of all phases is equal to the final price at the last phase. Therefore, the total
amount of VAT collected from all phases is equal to the amount of VAT which is computed on
the selling price to the end consumer.
For example: A company imports raw materials for 10 million VND and incurs VAT of 1
million VND. After that, the company produces goods and sells them for 20 million VND,
including VAT of 2 million VND. The company only paid an additional 1 million VND to the
tax authority (2 million VND output minus 1 million VND input).
For example: A product imported from abroad is subject to 10% VAT, similar to a
domestically produced product. Therefore, consumers choose products based on quality and
value instead of different tax rates.
-VAT has high economic neutrality
+ Not directly affected by the taxpayer’s business results.
+ Not affected by the organization and division of economic cycles.
+ The goal of VATdoes not directly adjust differences in income or assets.
VAT is not a cost to a seller. It is only a charge counted on the price of commodity and is paid
by the buyer. VAT is charged as a percentage of the selling price, which means that the actual
tax burden visible at each stage of production and distribution chain is born by the buyer and
of course falls on the end consumer. It is collected via a deduction system where a taxable
person (i.e.
VAT-registered business) must calculate the output tax at each stage of production and
distribution but he is allowed to offset against the input tax, i.e. tax charged to him by his
supplier. This mechanism ensures that the tax is neutral regardless of how many transactions
are involved.
Example: In the UK, the standard VAT rate of 20% applies uniformly to most goods and
services, whether they are domestically produced or imported. For instance, if a UK business
imports machinery worth £10,000, it pays £2,000 in VAT, which it can reclaim as input VAT.
When the business sells a product using that machinery for £20,000, it charges £4,000 in VAT
but deducts the £2,000 input VAT and remits £2,000 to the government. This consistent
application of VAT ensures economic neutrality, as it does not favor domestic over imported
goods or distort business decisions.
- VAT related to territorial characteristics
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+ VAT taxpayer is final consumer of goods and services in national territory or country: VAT
is designed to tax consumption within a specific territorial jurisdiction. This means that the
tax is applied only to goods and services consumed within the borders of the country. The
final consumer, whether an individual or a business using goods or services for non-
production purposes, bears the burden of VAT. Producers and intermediaries in the supply
chain collect VAT but can claim refunds for the VAT paid on their inputs, ensuring the tax is
only applied to the value added at each stage of production or distribution.
+ Why do they impose VAT to imported goods?: VAT is imposed on imported goods to
ensure that domestic and foreign products are treated equally in the market and to prevent tax
avoidance. Without VAT on imports, foreign goods might become cheaper than domestically
produced ones, giving imports an unfair competitive advantage. Applying VAT to imported
goods ensures that all goods consumed within the country contribute to the national tax
revenue, regardless of their origin.
 Mechanism of VAT on imports:
o When goods are imported into a country, VAT is calculated on the CIF value
(cost, insurance, and freight) of the goods, plus any applicable customs duties.
o Importers must pay VAT upon clearing the goods through customs. This VAT
is often treated as input tax, which businesses can deduct if they resell the
goods or use them in production.
For example: A shoe manufacturing company in Vietnam that exports products abroad is not
subject to output VAT, but is still reimbursed for VAT paid on input materials during the
production process.
* IN THE ADDITION METHOD: the value of the components of added value, including
wages and profits.
*BY DEDUCTION METHOD: the difference between total value of production and
consumption minus total value goods and services purchased respectively.

4.2. BASIC CONTENT OF VAT LAW IN VN

1. SCOPE OF APPLICATION
*TAXABLE OBJECTS:
All goods and services used for production, business and consumption in Vietnam (including
goods and services purchased from foreign organizations and individuals), except for non
taxable objects.
*NON-TAXABLE OBJECTS
1. Cultivation and husbandry products, and reared and fished aquatic products which have not
yet been processed into other products or have been just preliminarily processed and sold by
producing and fishing organizations and individuals, and products at the stage of importation.
2. Products which are animal breeds and plant varieties, including breeding eggs, breeding
animals, seedlings, seeds, sperms, embryos and genetic materials
3. Irrigation and drainage; soil ploughing and harrowing; dredging of intra-field canals and
ditches for agricultural production; services of harvesting farm produce.
4. Salt products made of seawater, natural rock salt, refined salt and iodized salt.
5. State-owned residential houses sold by the State to current tenants.
7. Life insurance, student insurance, insurance on domestic animals, insurance on plants and
reinsurance.
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8. Services of credit; securities trading – chứng khoán; capital transfer; derivative financial
services, including interest-rate swap contracts, forward contracts, futures contracts, call or
put options, foreign currency sales, and other derivative financial services as prescribed by
law.
*TAXPAYER
- Organizations and individuals carry out production and trading of goods and services
imposed to VAT in VN (production and business establishments).
- Organizations and individuals that import goods or purchase services from abroad imposed
to VAT (importers).
- Vietnamese organizations and individuals that purchase services from abroad (including
services attached to goods) of foreign organizations without permanent establishments in
Vietnam or foreign individuals being non-residents Vietnam.
2. BASIS FOR VAT CALCULATION
*TAXABLE PRICE
VAT price is the selling price without VAT stated on the sale invoice of the seller for goods
and services or on the import documents.
1. Taxed prices are applied for the following specific goods
 Import goods:
Taxed price = customs value + customs duty + excise tax + EPT (If any..)
-The price for import goods at the import border gate is determined by the method of customs
value.
- For goods and services sold by a production or business establishment, it is the selling price
without VAT.
- For goods and services used for barter, interna consumption or donation, the taxable price is
the price for calculating value-added tax on goods and services of the same or equivalent
kinds at the time of barter,
- For asset lease, the taxable price is the rent exclusive of value-added tax;
+ In case of asset lease for which rents are paid periodically or in advance for a certain lease
duration, the taxable price is the rent paid periodically or in advance, exclusive of value-
added tax;
+ In case of hiring foreign machinery, equipment or means of transport which cannot be
manufactured at home for sublease, the taxable price excludes the rent payable to the foreign
party;
-For goods sold by mode of installment or deferred payment, the taxable price is the lump-
sum selling price of such goods, exclusive of value-added tax, excluding the interest on
installment or deferred payment
- For goods processing, the taxble price is the processing remuneration exclusive of VAT.
- For real estate trading, the taxable price is the real estate-selling price exclusive of value-
added tax, excluding the charge for transferring land use rights or the land rent remittable into
the state budget;
- For commission-enjoying goods or service trading agency and brokerage, the taxable price
is the commission on these activities, exclusive of value-added tax;
- For goods and services for which payable documents indicating payable prices inclusive of
value-added tax are used, the taxable price is determined according to the following formula:

27
Price exclusive of value-added tax = Payment price/ 1 + goods or service tax rate (%)
*Taxable prices are determined in Vietnam dong. In case taxpayers have foreign currency
turnover, such turnover must be converted into Vietnam dong at the average exchange rate on
the inter-bank foreign currency market, announced by the State Bank of Vietnam at the time
turnover is generated, for the determination of taxable prices.
Time to determine taxable price
1. The time of determining value-added tax on goods is the time of transferring the right to
own or use goods to the buyer, regardless of whether money has been collected or not.
2. The time of determining value-added tax on services is the time of completing the
provision of services or the time of making service provision invoices, regardless of whether
payment has been made or not.
3. For import goods, it is the time of registration of customs declarations
4. For electricity and clean water supply activities (the date of recording electricity and water
consumption readings on the meter to be shown on the bill).
5.For construction and installation (the time of pre-acceptance test and handover of works,
work items, completed construction and installation volumes, regardless of whether money
has been collected or not).
6. For real estate business activities, infrastructure construction, construction of houses for
sale, transfer or lease (the time of collecting money according to the project implementation
schedule or the fee collection schedule inscribed in the contract).
*RATE OF VAT TAX
1.Rate of 0%
Applies to exported goods and services, international transportation and goods and services
not liable to value-added tax specified in Article 5 of this Law upon exportation.
 except cases of transfer of technologies or intellectual property rights abroad; offshore
reinsurance services; credit provision, capital transfer and derivative financial services; post
and telecommunications services; and exported products which are unprocessed mined
resources and minerals specified in Clause 23, Article 5 of this Law.
Explain:
+ Encouraging exports and enhancing international competitiveness:
Applying a 0% VAT rate to exported goods and services reduces costs for businesses and
encourages them to increase exports. This makes exported products more competitive in the
international market, contributing to national economic growth.
 Example: A garment manufacturing company in Vietnam exports clothing to the
European market. With a 0% VAT rate, the company does not have to pay VAT on
exported products but can still claim refunds for VAT paid on inputs like fabric,
thread, and equipment.
+ Avoiding double taxation and ensuring the "destination principle":
The 0% VAT rate aligns with the destination principle, which states that taxes should only be
applied in the country where goods and services are consumed. This prevents double taxation
—once in the exporting country and once in the importing country—ensuring fairness in
international trade.
 Example: If an exported product from Vietnam were subject to VAT and the
importing country also imposed VAT on its consumption, the final consumer would
bear a higher tax burden.
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+ Supporting international transportation and export-related services:
International transportation services and activities related to exports are also subject to the 0%
VAT rate to reduce logistics and operating costs for businesses. This policy promotes
international trade and facilitates cross-border goods movement.
 Example: A transport company providing container shipping services from a
Vietnamese port to Japan will not be subject to VAT on international transportation
services. This reduces service costs and enhances competitiveness in the market.
+ Ensuring consistency with the VAT Law:
Under Article 5 of the VAT Law in Vietnam, certain goods and services are not subject to
VAT. When these items are exported, the application of a 0% VAT rate ensures that
businesses do not have to pay output VAT but can still claim refunds for input VAT paid in
earlier stages.
 Example: Goods exempt from VAT domestically, such as unprocessed agricultural
products, also benefit from the 0% VAT rate upon export to avoid disadvantaging
export businesses.
2.Rate of 5% (thong tu 219)
* The tax rate of 5% applies to the following goods and services:
a/ Clean water for production and daily life;
b/ Fertilizers; ores for fertilizer production; insecticides, pesticides and plant and animal
growth stimulators;
c/ Feeds for cattle, poultry and other domestic animals;
d/ Services of digging, embanking and dredging canals, ditches, ponds and lakes for
agricultural production; growing, tending, and preventing pests and insects for, plants;
preliminary processing and preservation of agricultural products;
e/Unprocessed cultivation, husbandry and fishery products, except products specified in
Clause 1, Article 5 of this Law;
f/ Preliminarily processed rubber latex; preliminarily processed turpentine; nets, main ropes
and fibers for making fishing-nets;
g/ Fresh and live food; unprocessed forest products, except timber, bamboo shoots and
products specified in Clause 1, Article 5 of this Law;
h/ Sugar; by-products in sugar production, including molasses, bagasse and sludge; i/
Products made of jute, rush, bamboo, leaf, straw, coconut husks and shells and Eichhornia
crassipes, and other handicrafts made of agricultural raw materials; preliminarily processed
cotton; paper for newspaper printing; j/ Special-purpose machinery and equipment for
agricultural production, including ploughing machines, harrowing machines, rice-planting
machines, seeding machines, rice-plucking machines, reaping machines, combine harvesters,
agricultural product harvesters, insecticide or pesticide pumps or sprayers;
k/ Medical equipment and instruments; medical cotton and bandage; preventive and curative
medicines; pharmaco-chemistry products and pharmaceuticals used as raw materials for the
production of curative and preventive medicines;
1/ Teaching and learning aids, including models, figures, boards, chalk, rulers, compasses,
and equipment and tools exclusively used for teaching, research and scientific experiments;
m/ Cultural, exhibition, physical training and sports activities; art performances; film
production; film import, distribution and screening;

29
n/ Children toys; books of all kinds, except books specified in Clause 15, Article 5 of this
Law;
o/ Scientific and technological services under the Law on Science and Technology.
ÁP DỤNG CHO CÁC SẢN PHẨM NÀY VÌ:
+ Support for Basic Needs and Essential Goods
Many of the goods and services, such as clean water, fresh food, fertilizers, and animal feeds,
are essential for daily life and production. A reduced tax rate makes these items more
affordable, especially for lower-income households and small-scale producers, ensuring that
basic needs are met without imposing a heavy financial burden.
+ Promotion of Agricultural Development
Items like fertilizers, agricultural machinery, and services related to agriculture are taxed at
5% to encourage agricultural production. This supports rural economies, increases food
security, and helps stabilize the supply of agricultural products.
+ Encouragement of Public Welfare and Health
Reduced VAT rates for medical equipment, medicines, and teaching aids promote
accessibility to healthcare and education. This aligns with broader social policies to improve
public health and education standards, which are critical for national development.
+ Preservation of Cultural and Social Values
Cultural, sports, and educational activities, as well as the production and distribution of books
and children’s toys, are included in the 5% rate to support cultural enrichment and social
well-being. This encourages participation in cultural and educational activities while
preserving traditional crafts and knowledge.
+ Support for Scientific and Technological Advancement
Scientific and technological services are taxed at 5% to promote research and innovation. By
making these services more affordable, the government incentivizes development in science
and technology, which is crucial for economic growth and competitiveness.
+ Environmental and Economic Sustainability
The reduced VAT rate for goods like fishing nets, handicrafts made from natural materials,
and unprocessed forest products supports sustainable practices. It incentivizes the use of
renewable resources and helps preserve traditional industries that rely on local,
environmentally friendly raw materials.
3.Rate of 8%
Value-added tax reduction for groups of goods and services currently being applied at the tax
rate of 10%, except for the following groups of goods and services:
a) Telecommunications, financial activities banking, banking, securities, insurance, real estate
trading, metals and prefabricated products, mining products (excluding coal mining), coke,
refined petroleum products, chemistry. Details are in Appendix I promulgated together with
Decree n015/2022/ND-CP).
b) Products, goods and services are object of excise tax. Details are in Appendix Il issued
together with Decree 15/2022/ND-CP.
c) Information technology according to the law on information technology. Details are in
Appendix III issued together with Decree no 15/2022/ND-CP.
d) The reduction of value-added tax for each type of goods and services specified above shall
be applied uniformly at the stages of import, production, processing, business and trade. For
30
the sold coal products (including the case of coal mined and then screened, classified
according to a closed process, then sold) subject to value-added tax reduction.
Coal products included in the Appendix I issued with the Decree are not eligible for value-
added tax reduction at stages other than mining and selling.
4. Rate of 10%
The tax rate of 10% applies to goods and services not listed in tax rate of 0%, 5% and 8%.

3. VAT CALCULATION METHOD

1. Deduction method (Tax credit method)
* Subject of application
a. business establishments fully implementing the regime of accounting, invoices, and
vouchers according to the provisions of law on accounting and invoice vouchers
b. Register to pay taxes by the tax credit method (except those who are subject to the tax
calculation method calculated directly on the basis of added value).
- Business establishments operating with annual revenue from goods sale and service
provision of VND1billion or more and fully comply with the accounting, invoice and voucher
regimes according to the provisions of the accounting law. payment, invoices, documents,
except for business households and individuals that pay taxes by the method of direct
calculation.
- Business establishments that register voluntarily apply the tax deductionmethod, except
business households and individuals that pay tax by the method of direct calculation.
- Foreign organizations and individuals that supply goods and services to conduct oil and gas
search, exploration, development and exploitation pay tax by the deduction method, which is
declared and deducted by the Vietnamese partner.
Payable VAT amount = Output of VAT amount – Creditable input of VAT amount
a/The payable value-added tax amount according to the tax credit method is the output value-
added tax amount minus the creditable input value-added tax amount;
b/ The output value-added tax amount is the total amount of value-added tax on sold goods
and services indicated in the added-value invoice;
 Value added tax inscribed onVAT invoice = Taxable price subject to sales tax (x) VAT rate
of goods and services.
 Incase the invoice isused to record that the payment price is inclusive of VAT, the output
VAT = Payment price (-) taxable price
*Creditable input VAT amount
- The creditable input value – added tax amount is the total value-added tax amount indicated
in the added value invoice on goods or service purchase and the document proving the
payment of value-added tax on imported goods, and must satisfy the conditions specified.
1. Business establishments which pay value-added tax according to the tax credit method are
entitled to input value-added tax credit as follows:
a/ Input value-added tax on goods or services used for the production or trading of goods or
services subject to value-added tax may be wholly credited.
b/ For goods or services used for the production and trading of goods or services both subject
and not subject to value-added tax, only the amount of input value-added tax on goods or

31
services used for the production and trading of goods or services subject to value-added tax is
creditable.
The in put value-added tax on fixed assets used for the production and trading of goods or
services both subject and not subject to value-added taxmay be wholly credited.
c/The input value-added tax on goods or services sold to organizations or individuals that use
humanitarian or non refundable aid capital may be wholly credited;
d/ The input value-added tax arising in a month shall be declared and credited upon the
determination of the payable tax amount of that month.
- In case a business establishment detects errors in the declared or credited input
value-added tax amount, additional declaration and credit may be conducted; the maximum
time limit for additional declaration and credit is 6 months from the time of detecting errors.
*Conditions to be entitled to input value-added tax credit
Conditions on a business establishment to been titled to input value-added tax credit are
specified as follows:
(1) Having an added-value invoice on goods or service purchase or a document proving
the payment of value added tax at the stage of importation;
(2) Having a via-bank payment document of purchased goods or services, except goods or
services valued at under 20millionVietnamdong upon each time of purchase;
(3) For exported goods and services, apart from the conditions, the business establishment
must also have a contract signed with a foreign party on goods sale or processing orser
vice provision, a goods or service sale invoice, a via-bankpayment document and a
customs declaration.
 Payment for exported goods or services by clearing between exported goods or
services and imported goods or services or paying debts on behalf of the State is
regarded as via-bank payment.
*Conditions of Invoices and documents
 Goods and service purchase and sale must be accompanied by invoices and documents
according to law and the followin gregulations:
(1) Business establishments which pay value-added tax according to the tax credit
method shall use added-value invoices; such an invoice must be filled in fully and
properly, displaying all surcharges and additional charges (ifany). In case value-
added tax-subject goods or services are sold with added-value invoices that do not
indicate value-added tax amounts, the out put value-added tax shall be determined
to be the payment price indicated in the invoice multiplied by the value-added tax
rate.
(2) Business establishments which pay tax according to the method of calculation of
tax based directly on added value shall use sale invoices.
 For stamps and tickets which are payment documents pre-printed with payment prices,
those prices are inclusive of value-added tax.
*Principle of inout VAT deduction
1. Only input VAT on goods and services used for production and business may be deducted
to create goods and services sold that are subject to VAT.

32
2. The input VAT on deductible goods and services arising in a month may be declared for
deduction when determining the payable tax amount of that month, regardless of whether the
goods have been used or left in stock.
*Some special deductions
Case 1: Fix asset
- Input VAT on goods and services forming fixed assets such as mid-shift motels, free houses,
changing rooms, water tanks for workers in production and business areas, and for houses,
clinics For ... employees in industrial zones are deducted in full.
- For fixed assets used for welfare purposes, offices and exclusively used for credit activities
of credit institutions, etc., VAT shall be calculated into the historical cost of fixed assets (not
deductible).
- Fixed assets being cars with people of 9 seats or less (except for cars used in transportation
of goods, passengers, tourist and hotel businesses) valued at over VND 1.6 billion, the VAT
amount Inputs exceeding VND 1.6 billion are not deductible.
Case 2: Raw materials
Purchase of materials using a mixture that cannot be separately accounted: It must be
allocated according to the turn over rate
Creditable input of VAT amount = VAT taxable turnover/ (total turnover in period) x
Total input of VAT amount in period
*Case eligible for tax refund
1.Business establishments which pay value-added tax according to the tax credit method are
entitled to value-added tax refund if, for three or more consecutive months, they have some
input value-added tax amount not yet fully credited.
 Business establishments having registered to pay value-added tax according to the tax
credit method are entitled to tax refund if they have new investment projects and some
amount of value added tax on purchased goods or services used for investment not yet fully
credited and the remaining tax amount of two hundred million VND or more.
2.Business establishments which export goods or services in amonth are entitled to value-
added tax refund on a monthly basis if they have a non-credited input value-added tax
amount of two hundred million VND or more.
3.Business establishments which pay value-added tax according to the tax credit method are
entitled to value added tax refund if upon ownership transformation, enterprise
transformation, merger, consolidation, separation, split, dissolution, bankruptcy or operation
termination, they have an over paid value added tax amount or have some input value-added
tax amount not yet fully credited.
4.Business establishments possessing value-added tax refund decisions issued by competent
agencies as provided for by law, and cases eligible for value-added tax refund under treaties
to which the Socialist Republic of Vietnam is a contracting party
2. Direct method

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 CHAP 5. PERSONAL INCOME TAX
1.Definition and characteristics of personal income tax
*DEFINITION: PIT is a tax imposed on taxable income of an individual arising in a tax
period.
*CHARACTERISTICS
- PIT is a direct tax levied on income of a person who has a taxable income for a
relevant tax period. So that, it is difficult to transfer the tax burden to another.
Legally, income taxpayers are those who really pay tax. The base is the income of the
taxpayers, not the price of goods or services. It is difficult, if not impossible, to shift the tax
burden onto the consumers of goods or services. Being a direct tax, corporate income tax is in
general proportional or progressive and this is a strength of corporate income tax. However,
the payers of corporate income tax as a direct tax are inclined towards fraud and evasion. Of
course, this is a weakness of corporate income tax.
 Example: An employee with a taxable income of 30 million VND per month is
required to pay PIT directly from their salary and cannot shift this tax burden to their
employer or others.
- PIT is a highly sensitive tax comparison with other taxes.
PIT is highly sensitive because it directly affects an individual’s disposable income and
standard of living. Any changes in tax rates, exemptions, or related policies can quickly
trigger reactions from taxpayers. Since PIT is deducted from an individual's income,
increases in tax rates are felt more acutely than changes in corporate or indirect taxes.
 Example: If the government raises the PIT rate from 10% to 15% for middle-income
earners, those affected may feel significant financial pressure, potentially leading to
dissatisfaction or reduced motivation to work.
- PIT is a highly progressive tax.
PIT is typically structured as a progressive tax, meaning the tax rate increases as income
levels rise. This ensures that higher-income individuals contribute more to the national
budget, helping reduce income inequality and redistributing wealth within society.
 Example: An individual earning 10 million VND per month is subject to a lower tax
rate (e.g., 10%) than someone earning 100 million VND per month (e.g., 20%). This
ensures that those with greater financial capacity contribute more to the tax system.
- PIT aims to ensure fairness in horizontal and vertical term.
PIT is designed to ensure fairness both horizontally and vertically. Horizontal fairness means
individuals with similar income levels pay similar amounts of tax. Vertical fairness ensures
that individuals with higher incomes pay more taxes, both in absolute terms and as a
percentage of their income.
 Example:
o Horizontal fairness: Two employees earning the same salary of 20 million
VND per month, after allowable deductions, are required to pay the same
amount of PIT.
o Vertical fairness: An individual earning 200 million VND per month not only
pays more tax in absolute terms but also at a higher rate compared to someone
earning 20 million VND per month.
- PIT is a tax that does not distort the price of goods and services.

34
PIT does not directly impact the prices of goods and services in the market because it is not
applied to commercial transactions but rather to individual income. This makes PIT a neutral
tax in terms of market prices, as it does not influence competition or consumer behavior.
 Example: When an individual earns income and pays PIT, the tax does not affect the
prices of products they purchase, such as food or services. In contrast, value-added tax
(VAT) increases the price of goods and services, directly impacting consumer
behavior.

*ROLES
- PIT is a tool to ensure fairness in income distribution.
Personal Income Tax (PIT) ensures fairness by requiring individuals with higher earnings to
contribute a greater share of their income to the state. This is achieved through progressive
tax rates, where higher income brackets are taxed at higher rates. By redistributing income
from the wealthy to fund public services such as healthcare, education, and social welfare
programs, PIT helps narrow income inequality.
Example: In many countries, individuals earning above a certain threshold (e.g., $100,000
annually) are subject to a higher tax rate, ensuring that those who can afford to pay more
contribute proportionally to societal needs.
- PIT is an important tool to mobilize revenues for the state budget.
PIT is a significant source of government revenue, contributing to the state budget for public
goods and services such as infrastructure, education, and national defense. Since PIT is
collected from individuals based on their income, it provides a stable and predictable revenue
stream, especially in economies with a large working population.
Example: In the United States, PIT accounts for a substantial portion of federal revenue,
funding programs like Medicare, Social Security, and public infrastructure projects.
- PIT is a macro-adjusting tool that stimulates savings and investment in the direction of
enchancing social efficiency.
PIT can be structured to encourage savings and investments by offering deductions,
exemptions, or reduced tax rates on certain income types, such as savings account interest or
investments in specific sectors. This incentivizes individuals to allocate income toward
productive activities, thereby enhancing social and economic efficiency.
Example: Some countries allow tax deductions for contributions to retirement accounts, like
401(k) plans in the U.S., or provide tax incentives for investments in green energy projects,
promoting long-term economic growth and sustainability.
- PIT is a progressive tax that will offset the depletion of consumer taxes (customs duty,
VAT, excise tax, environmental protection tax).
PIT functions as a progressive tax mechanism that helps balance the regressive nature of
other consumer taxes, such as VAT, excise taxes, and customs duties. These consumption
taxes tend to disproportionately affect lower-income individuals since they pay a higher
percentage of their income on taxed goods and services. PIT, being progressive, ensures that
individuals with higher incomes contribute more in taxes, effectively offsetting the burden on
those with lower incomes.
Example: In countries where the VAT rate is high (e.g., 20%), lower-income households
spend a significant portion of their income on taxed goods like food and clothing. To mitigate

35
this, a progressive PIT system ensures that those with higher earnings are taxed at higher
rates, helping to redistribute wealth and reduce the regressive effects of consumption taxes.

*History of development for PIT

- PIT was first introduced in 1799 in the U.K and in 1803 this tax was extended to all
individuals and were completed in 1842.
- Applied in Japan in 1887, in USA in 1913 and in France in 1914 and now applied in the
most of countries.
- PIT rate in some countries: USA (41%), UK (35%), Denmark (50%).
2. Basic content of personal income tax
2.1. Taxpayers
• Personal income taxpayers include residents who earn taxable incomes specified in Article 3
of this Law inside and outside the Vietnamese territory and non-residents who earn taxable
incomes specified in Article 3 of this Law inside the Vietnamese territory.
• Resident means a person who satisfies one of the following conditions:
- Being present in Vietnam for 183 days or more in a calendar year or 12 consecutive
months counting from the first date of their presence in Vietnam;
- Having a place of habitual residence in Vietnam, which is a registered place of
permanent residence or a rented house for dwelling in Vietnam under a term rent
contract.
• Non-resident means a person who does not satisfy any of the conditions specified in
resident.
2.2. Assessable income
Income liable to personal income tax include the following kinds of income:
1. Incomes from salaries and wages
2. Incomes from capital investment
3. Incomes from capital transfer
4. Incomes from transfer of real estate
5. Incomes from won prizes
6. Incomes from copyright
7. Incomes from commercial franchising
8. Incomes from inheritances that are securities, capital holdings in economic organizations,
or business establishments, real estate and other assets subject to ownership or use
registration.
9. Incomes from gifts that are securities, capital holdings in economic organizations or
business establishments, real estate and other assets subject to ownership or use registration.
10. Incomes from business activities
*Tax-exempt incomes: miễn thuế
1. Incomes from transfer of real estate between spouses; parents and their children; adoptive
parents and their adopted children; fathers-in-law or mothers-in-law and daughters-in-law or
sons-in-law; grandparents and their grandchildren; or among blood siblings.
2. Incomes from transfer of residential houses, rights to use residential land and assets
attached to residential land received by individuals who have only one residential house or
land.
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3. Incomes from the value of land use rights of individuals who are allocated land by the
State.
4. Incomes from receipt of inheritances or gifts that are real estate between spouses, parents
and their children; adoptive parents and their adopted children; fathers-in-law or mothers-in-
law and daughters-in-law or sons-in-law; grandparents and their grandchildren; or among
blood siblings.
5. Incomes of households and individuals directly engaged in agricultural or forest
production, salt making, aquaculture, fishing and trading of aquatic resources not yet
processed into other products or preliminarily processed aquatic products.
6. Incomes from conversion of agricultural land allocated by the State to households and
individuals for production.
7. Incomes from interests on deposits at credit institutions or interests from life insurance
policies.
8. Incomes from foreign exchange remittances.
9. Wages paid for night shift or overtime work, which are higher than those paid for day shifts
or prescribed working hours in accordance with law.
10. Retirement pensions paid by the Social Insurance.
11. Incomes from scholarships, including:
- Scholarships granted from the state budget;
- Scholarships granted by domestic and foreign organizations under their study promotion
programs.
12. Incomes from indemnities paid under life insurance policies, non-life insurance policies,
compensations for labor accidents, compensations paid by the State and other compensations
as provided for by law.
13. Incomes received from charity funds licensed or recognized by competent state agencies
and operating for charity, humanitarian or non-profit purposes.
14. Incomes received from governmental or non-governmental foreign aid for charity or
humanitarian purposes approved by competent state agencies.

2.3 TAX BASE AND TAX RATE

+ Incomes from wages and remunerations
Incomes from wages and remunerations are incomes paid to employees from employers,
including:
1. Wkages, remunerations, and the other amounts paid as wages or remunerations in cash or
not in cash.
2. Allowances and benefits, except for: 11 types
- Allowances and subsidies of monthly preferential treatment
- National defense and security allowances; subsidies appliable to armed forces
- Allowances for attraction of laborers to work in certain branches or in certain regions...
3. The received remunerations under forms as: brokerage commissions, payments for
participation in schemes or projects, royalties, and other commissions, others remunerations;
4. Sums of money earned from participation in business associations, boards of directors,
control boards, management boards, associations, professional clubs and other organizations.

37
5. Other monetary or non-monetary benefits other than salaries and wages paid by employers
and taxpayers are beneficiaries in any form:
- House rents, charges for electricity, water and associated services (if any);
- Accumulation premiums from life insurance, other non-compulsory insurances,
accumulation amount of contribution in the voluntary retirement fund, which are bought or
paid for employees by the employers.
- Membership fees and charges for other services provided for individuals at the request, such
as: Healthcare, entertainment, sports, recreation, beauty care;
6. Monetary or non-monetary bonuses or rewards in any form, including also bonus
securities, + except for the following bonuses or rewards:
- Rewards accompanying honorary titles conferred by the State, including also those
accompanying emulation titles and other commendation and reward forms under the law on
emulation and commendation;
- Rewards accompanying international or national prizes recognized by the Vietnamese State;
- Rewards for technical renovations, innovations or inventions recognized by competent state
agencies;
- Rewards for detection of and reporting on illegal acts to competent state agencies..
*Not count in taxable incomes for the following amounts:
• The support amounts of the employers for the employees and the employees' relatives
(parents, spouses, and children) so as to pay for medical examination and treatment involving
dangerous diseases;
• The received amounts under the regime involving use of travel means in state agencies,
public non-business units, party's organizations, mass associations;
• The received amounts under the regime of official-duty houses as prescribed by law;
• The received amounts other than wages, salaries because of participation in or serving for
activities of the Party, Union, National Assembly or elaborating legal documents of the State.
• Amounts for shift meals for employees paid by the employers not exceeding the level set by
the Minister of Labor, Invalids and Social Affairs.
• Amount of buying the round-trip flight tickets paid on behalf (or paid) by the employers for
employees being foreigners, employees beingVietnameses working abroad to go back home
country for once annual leave;
• Study charges for children of foreign employees tostudy in Vietnam, children of the
Vietnamese employees working abroad to study in foreign country at the education grade
from early childhood education to upper secondary education paid on behalf by the
employers.
*Reduction based on family circumstances
1. Levels of reduction based on family circumstances
- Level of reduction for a taxpayer himself/herself is 11 million VND/ month (which is 132
million VND/ year)
- Level of reduction for each dependant of a taxpayer is 4.4 million VND/ month (52.8
million VND/ year) given from the month the taxpayer’s obligation to nurutre the dependant
arises.
+Each dependant may be counted only once for tax reduction for a taxpayer in a tax year.

38
- Persons and grounds to be identified as dependants of taxpayers to have the nurture
obligation specified in are as follows:
+ Under-18 children (including blood children, legally adopted children, step children of
spouse);
+ Disabled children (including blood children, legally adopted children, step children of
spouse) who are aged 18 years or older and incapable of working;
- Children (including blood children legally adopted children, step children of spouse) who
are studying at universities, colleges, professional secondary schools or job-training schools,
including children who are aged 18 years or older and are studying at general education level
and have no income or have incomes not exceeding the level VND 1 milion/month.
- Persons who are beyond the working age or persons who are at the working age prescribed
by law but are disabled and incapable of working or have no income or have incomes not
exceeding the level specified, including:
+ Spouses of taxpayers;
+ Blood parents or stepfather, stepmother, legally adopted parents, spouse's parents of
taxpayers;
+ Other helpless individuals whom taxpayers are obliged to directly nurture.
2.Deductions for insurance premiums and contributions to the voluntary pension fund
• Deductions for insurance premiums and contributions to the voluntary pension fund:
- Insurance premiums include premiums for social insurance, health insurance,
unemployment insurance and professional liability insurance, which is compulsory for some
professions.
• Contributions to the voluntary pension fund are deducted from the taxable income, but the
deduction shall not exceed 01 million VND/month (12 million VND/year) when the
employee participates in voluntary pension plans, even the employee participates in multiple
pension funds.
+The basis for determining deductible income is photocopies of payment bills given by
the voluntary pension fund.
3. Deductible charitable donations.
1. Resident individuals who earn incomes from business activities, salaries or wages enjoy
their charity or humanitarian donations deductible from their taxable incomes, including:
- Donations to organizations or establishments that care for or nurture children in special
plights, disabled people and helpless elderly people;
- Donations to charity funds, humanitarian funds or study promotion funds.
2.Charity or humanitarian donations made in a year are deductible from taxable incomes of
that year and must not be carried forward for deduction from taxable incomes of the
subsequent tax year.
*Taxed income
1. Incomes from capital transfer
- Taxed incomes from transfer of contributed capital amounts
- Taxed incomes from securities transfer
-Tax rates
+ The tax rate for incomes from transfer of contributed capital is 20% of taxed income from
each transfer.
39
+ The tax rate for incomes from securities transfer is 20% of taxed income of a whole year
and applies only to tax payers that have documents.
+ For taxpayers other than those specified above, the applicable tax rate is 0.l% of the price
of each securities transfer.
- Taxed incomes from transfer of contributed capital amounts is determined to be equal to the
transfer price minus (-) the buying price of the contributed capital amount and reasonable
expenses related to the generation of capital transfer income.
+ Transfer price means a sum of money receivable by an individual under a capital transfer
contract.
+ Buying price of a transferred capital amount means the value of that contributed capital
amount at the time of capital transfer to be equal total value of the initial contributed capital
and value of the contribution or supplementation purchase times.
+ Reasonable expenses related to the generation of capital transfer incom eare actually paid
expenses with lawful invoices and vouchers, including: Expenses for completion of legal
procedures necessary for the transfer; Charges and fees paid by the transfer or into the state
budget under law; Other expenses.
- Taxed incomes from securities transfer is determined to be equal to the selling price minus
(-) the buying price of securities and expenses related to the transfer.
- Selling prices of securities are determined as follows:
+Selling prices of securities allowed trading at the Stock Exchanges are price so factual
transfers at the Stock Exchanges;
+ Selling prices of securities not falling in case specified in point a this clause are prices of
actual transfers inscribed in transfer contract or prices according to accounting books of units
possessing the transferred securities at time of transfer.
- Buying prices of securities are determined as follows:
+ Buying prices of securities allowed trading at the Stock Exchanges are prices of actual
purchases at the Stock Exchanges;
+ Buying prices of securities not falling in case specified in point a this clause are prices of
actual purchases inscribed in transfer contract or prices according to accounting books of
units possessing the transferred securities at time of purchase.
- Expenses related to the securities transfer are actually paid expenses with lawful invoices
and vouchers, including:
+ Charges for securities transfer and receipt of transferred securities;
+ Securities trust expense;
+ Otherexpenses.
2.Incomes from inheritances of gifts
- Time of determination of taxed incomes
+ Time of determination of taxed incomes from inheritances is the time when individuals do
procedures for register of the rights to own and use the inheritance assets which they have
received.
+ Time of determination of taxed incomes from gifts is the time when individuals do
procedures for register of the rights to own and use assets being gifts which they have
received.
- The tax rate applicable to incomes from inheritances or gifts is 10% of taxed incomes.
40
- The determination of taxed incomes from various inherited assets or gifts must be based on
the conformity with market prices of these assets at the time of income generation, of which:
+ For securities being the inherited assets or gifts
+ For capital holdings in economic organizations or business establishments
+ For real estate
+ For othe assets.
3.Incomes from real estate transfer
3.1. Taxed incomes from land use rights transfer
Taxed income is determined to be equal to the price of a land use right transfer minus (-) the
cost price and related reasonable expenses.
- Transfer prices are actual prices stated in transfer contracts at the time of transfer.
- Land use rights transfer cost prices are determined:
+ The state: based on receipts of land use levy collected by the State.
+ Organizations and individuals: based on transfer contracts at time of receiving land use
right transfer (upon buying).
- Reasonable expenses related to the transfer of land use rights are actually paid expenses
with lawful invoices and vouchers, including:
+ Charges and fees prescribed by law and related to the grant of land use rights.
+ Expenses for land revamp and ground leveling (if any)
+ Othe expenses directly related to the transfer of land use rights.
3.2. Taxed incomes from transfer of real estate being land use rights associated with
construction works on land, including construction works formed in future
Taxed income is determined to be equal to the transfer price minus (-) the cost price and
related reasonable expenses.
- Transfer prices are specifically determined:
+Actual prices stated in transfer contracts at the time of transfer;
+ Land price brackets set by provincial-level People's Committees at the time of transfer;
+ The value of houses, infrastructure works and architectures attached to land is determined
under the prices to calculate the registration fees of houses that are set by provincial level
People's Committees.
- Cost prices are determined to be prices stated in transfer contracts at the time of purchase.
- Reasonableexpensesareactuallypaidexpenseswith lawfulinvoicesandvouchers:
+ Charges and fees prescribed by lawand related to the grant of land use rights;
+ Expenses for land revamp and ground leveling;
+ Expenses for repair or renovation of construction works on land;
+ Other expenses directly related to the transfer.
3.3. Taxed incomes from transfer of the right to own or use residential houses
Taxed income is determined to be equal to the selling price minus (-) the buying price and
related reasonable expenses.
- Selling prices are actual transfer prices determined according to market prices and stated in
transfer contracts
- Buying prices are determined to be those stated in purchased contracts.
- Reasonable expenses are actually paid expenses with lawful invoices and vouchers
+ Charges and fees prescribed by law and related to the grant of house ownership
41
+ Expenses for house repair, renovation and upgrading
+ Other expenses directly related to the transfer of residential house.
*Tax rates
- The tax rate for incomes from transfer of real estate is 25% of taxed income.
- In case taxpayers fail to identify or fail to have dossier to determine cost prices and lawful
documents for determining related expenses, which serve as a basis for determining taxed
incomes, the tax rate of 2% of transfer prices is applied.
4. Incomes from won prizes
Taxable incomes from business activities
1.Tax calculation methods applied by business people paying flat tax
– If the revenue subject to PIT earned by a flat taxpayer who does not do business for the
whole year (less than 12 months of a calendar year) is VND 100 million per year or lower,
such person shall not pay VAT and PIT
– If the revenue subject to PIT earned by a flat taxpayer who does not do business for the
whole year (less than 12 months of a calendar year) is more higher than VND 100 million per
year such person shall not pay VAT and PIT.
- If Revenue subject to PIT < VND 100 million per year or lower , such person shall not pay
VAT and PIT.
- If Revenue subject to PIT > VND 100 million per year, such person shall pay VAT and PIT.

PIT rate and VAT rate: is calculated through table of flat tax rare.

2. Tax calculation methods applied by business people paying tax every time it is incurred
3. Tax accounting method applied by persons leasing property
4. Tax calculation method applied by persons who directly sign lottery, insurance, multi-level
marketing agent contracts

ADMINISTRATION OF PERSONAL INCOME TAX

1.Tax registration and grant of tax identification numbers
– Individuals having taxable incomes shall make tax registration with tax offices in order to
be granted tax identification numbers for themselves andf or each dependant person from
whom they enjoy reduction based on family circumstances.
– Organizations and individuals paying taxable incomes shall make tax registration with tax
offices in order to be granted tax identification numbers.
2.Declaration, payment and finalization of personal income tax
- Monthly tax declaration and tax payment are applicable to organizations and individuals
paying the incomes and implemented tax with holding for incomes amount under each type
of declaration is VND 50 million or more;
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- Quarterly tax declaration and tax payment.
- Tax declaration and tax payment upon each time of income generation are applied to:
+ Incomes from real estate transfer
+ Incomes from capital transfer of resident individuals
+ Incomes from inheritances or gifts
+ Incomes from goods production and business, and service provision of business individuals
and individuals groups which have been issued retail invoices by tax offices
+ Incomes generated aboard of resident individuals, exclusive of incomes from wages or
salaries
+ Incomes generated in Vietnam but received abroad of non-resident individuals, exclusive of
incomes from wages or salaries.

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