Chapter 3 special sales tax

CHAPTER 3 SPEACIAL SALES TAXPrepared by: INVESTMENT DEPARTMENT TON DUC THANG UNIVERSITY THE FACULTY OF FINANCE AND BANKING INVESTMENT DEPARTMENT 3/25/2017 B02033 – Chapter 3: Special S

CHAPTER 3 SPEACIAL SALES TAX

Prepared by: INVESTMENT DEPARTMENT

TON DUC THANG UNIVERSITY THE FACULTY OF FINANCE AND BANKING

INVESTMENT DEPARTMENT

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LEARNING OBJECTIVES

Determine base price, tax rate and ways to calculate Special Sales Tax payable by a taxpayer in Vietnam

Know how to complete an Special Sales Tax declaration and when to file and pay tax.

Know who and in what case is exempt from Special Sales Tax in Vietnam

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• The rates of Special Sales Tax are often higher than those of other sales taxes

Legal documents involved

• LAW ON EXCISE TAX (No 27/2008/QH12 of

November 14, 2008).

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The scope

Taxable objects Non-taxable objects Taxpayers

Taxable objects

1.

• 11 items/group of items of goods

2 • 6 items of services

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Taxable objects

• 11 items/group of items of goods

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Gasoline of various kinds, naphtha;

Air conditioners

<= 90,000 BTU

Playing cards Votive gilt paper, votive objects

Motors with cylinder capacity

Non-taxable objects

Directly exported by producers/processors

• Humanitarian aid or non- refundable aid goods.

through Vietnam’s border;

• Goods temporarily imported for for re-export, or

temporarily exported for re-import during the

import or export duty-free period;

• Goods imported for duty-free sale under the

prescribed regulations

Imported goods, including:

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Producers

Importers of

goods Providers of

Excise tax payers

Tax calculation bases

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Price exclusive of tax – environmental tax (if any)

1 + Special Sales Tax rate of goods

The base price is the import tax base price

+ the import tax

Before – VAT price of service

1 + Special Sales Tax rate of service

• For example the price exclusive of VAT of a bottle of wine is VND 125,000 Special Sales Tax rate of wine is 25%

• The excise base price of this bottle of wine is :

• For example, an air-conditioner with import base price of VND 10,000,000 Import tax payable is VND 1,000,000

• The excise base price of this air-conditioner is:

10,000,000+

1,000,000=11,000,000 VND

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Tax calculation methods

The amount of Special Sales Tax is determined

by the following formula:

TAX = goods/service Base price of X Tax rate (%)

 We have data of a company engaged in beer production

in a tax month as follows:

- Exported beer: 200,000 cans with FOB price of VND8,000 per can

- Sale of beer in domestic market: 5000,000 cans at price exclusive of VAT of VND9,000

Required: Calculate the amount of Special Sales Tax

pay able by that company Given that, the Special Sales Tax rate applicable to beer is 50%

EXAMPLE

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• REQUIRED:

Calculate the Special Sales Tax amount payable by that company Given that the Special Sales Tax rate applicable to wine is 25%

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• Report on dancing hall service as follows:

• Turnover of beer at before- VAT price: VND200,000,000

• Turnover of liquors at before- VAT price: VND420,000,000

• Turnover of fruit juice at sales of a company providing

before VAT price: VND 130,000,000

• Turnover of other goods at before-VAT price:

• Total turnover exclusive of VAT is:

200,000,000 + 420,000,000 + 130,000,000+

90,000,000 = 720,000,000

• Special Sales Tax payable for the tax month by

this company is:

720,000 (1+40%) X 40% = 240,000,000

Tax refund and deduction

Refund in 4cases:

• Goods temporarily imported for re-export

• Raw materials imported for export production and processing;

• Finalization of overpaid tax amounts upon

merger, consolidation,

• Upon issuance of tax refund decisions by

competent agencies under law

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TAX REDUCTION AND EXEMPTION

Tax reduction

or exemption

Natural disasters

Enemy sabotage

The amount

<=30%