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Vietnam Special Consumption Tax 2024: Quick Read

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There are a number of taxes that foreign business owners in Vietnam should be aware of. One of these taxes is Vietnam’s special consumption tax which is particularly important for foreign proprietors of businesses like bars and nightclubs, hotels, and retail businesses broadly. With this in mind, this article runs through what this tax is, what it applies, and the key elements that apply to foreign business persons.

What is SCT in Vietnam?

Vietnam’s Special Consumption Tax–or SCT–though sometimes called an excise tax or Special Sales Tax is an indirect tax on luxury goods or goods that are harmful to people or the environment. For example, cigarettes or alcohol. It is codified in the Law on Special Consumption Tax issued in 2014.

How is the SCT applied in Vietnam?

For domestically produced goods the SCT rate is applied to the price of the item when it leaves the factory. For imported goods, it is calculated on the cost, insurance, and freight price–the CIF–plus an import duty if one is applicable.

What is the SCT rate in Vietnam?

According to the Law on Special Consumption Tax the current SCT rates are as follows. Note that rates on motor vehicles were increased as part of Law 106/2016/QH13 passed by the National Assembly on April 6, 2016. 

Cigarettes, cigars and other tobacco products75 
Greater than 20° proof65 
Less than 20° proof35
Beer 65
Petrol, diesel cars of 9 seats or less with a cylinder capacity of 
1,500 cm3 or less35 
Between 1,500 cm3 and 2,000 cm340
Between 2,000 cm3 and 2,500 cm350
Between 2,500 cm3 and 3,000 cm360
Between 3,000 cm3 and 4,000 cm390
Between 4,000 cm3 and 5,000 cm3110
Between 5,000 cm3 and 6,000 cm3130
Over 6,000 cm3150
ICE passenger vehicles of 10 to 16 seats15
ICE passenger vehicles of 17 to 24 seats10
Other fuels
Hybrid vehicles (percent of ICE rates)70
Biofuel-powered motor vehicles (percent of ICE rates)50
Electric passenger vehicles of 9 seats or fewer15
Electric passenger vehicles of 10 to 16 seats10
Electric passenger vehicles of 16 to 24 seats5
Electric vehicles designed to carry people and cargo10
Aircraft 30
E10 7
Air conditioners of 90,000 British thermal units (BTU) or less10
Playing cards 40
Votive papers and objects 70
Dance halls40
Massage parlours and karaoke bars30
Casinos and prize-winning video games35
Golf  20
Lottery 15

^ICE: Internal Combustion Engine

Items exempt from SCT

Broadly speaking the SCT applies to goods consumed within Vietnam–so goods that are imported solely to be made into something else and then reexported are not taxed under the SCT.

That said, there are a few products that when consumed in Vietnam, are SCT-free. These include aircraft and yachts for business or security and defence purposes; ambulances, prisoner transport vehicles; funeral cars; vehicles that can carry 24 people or more; cars for entertainment purposes, for example, race cars.

What’s next?

There has been some debate about raising the SCT in Vietnam, however, this move has struggled to gain legs in the context of the current economic challenges the country is facing. That said, big organisations like the World Health Organisation are pushing for greater taxation of cigarettes in Vietnam and there is talk of adding sugary drinks and vapes to the list of items that attract the special consumption tax. With this in mind, foreign firms operating in these sectors can best keep abreast of the latest developments by subscribing to the-shiv.


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