DECREE

DETAILING A NUMBER OF ARTICLES OF THE LAW ON EXCISE TAX

THE GOVERNMENT

Pursuant to the December 25, 2001 Law on Organization of the Government;
Pursuant to the November 14, 2008 Law on Excise Tax;
Pursuant to the November 29, 2006 Law on Tax Administration;
At the proposal of the Minister of Finance, DECREES:

Chapter I

SCOPE AND OBJECTS OF APPLICATION

Article 1. Scope of regulation

This Decree details and guides a number of articles of the Law on Excise Tax.

Article 2. Taxable objects

1. Excise tax-liable objects are specified in Article 2 of the Law on Excise Tax.

a) Aircraft and yachts specified at Point f, Clause 1, Article 2 of the Law on Excise Tax are those for civil use.

b) Gasoline of all kinds, naphtha, reformade components and other components for mixing gasoline, specified at Point g. Clause 1, Article 2 of the Law on Excise Tax, includes also condensates.

c) Votive gilt papers and votive objects specified at Point j. Clause 1, Article 2 of the Law on Excise Tax exclude those which are children's toys, teaching aids and decorative objects.

d) Betting business specified at Point d. Clause 2, Article 2 of the Law on Excise Tax covers betting for sports and entertainment activities and other forms of betting as prescribed by law.

2. Excise tax-liable goods specified in Clause 1, Article 2 of the Law on Excise Tax are complete commodities, excluding component sets used for assembling these commodities.

Article 3. Non-taxable objects

Objects not liable to excise tax are specified in Article 3 of the Law on Excise Tax.

1. Imported goods not liable to excise tax mentioned at Point a. Clause 2, Article 3 of the Law on Excise tax include:

a) Goods imported as humanitarian aid or non­refundable aid, including also goods imported with non-refundable aid as approved by competent agencies; goods provided as humanitarian assistance or urgent relief for overcoming consequences of wars, natural disasters or epidemics;

b) Overseas organizations' or individuals' gifts for state agencies, political organizations, socio­political organizations, socio-political-professional organizations, social organizations, socio-professional organizations or people's armed forces units;

c) Donations or gifts for individuals in Vietnam within the law-prescribed quotas.

2. Goods transited or transported via Vietnamese border gates or borders and goods transported to and from border gate as specified at Point b. Clause 2, Article 3 of the Law on Excise Tax include:

a) Goods transported from exporting countries to importing countries via Vietnamese border gates but procedures for their import into and export from Vietnam are not carried out;

b) Goods transported from exporting countries to importing countries via Vietnamese border gates and brought into bonded warehouses but procedures for their import into and export from Vietnam are not carried out;

c) Goods transited or transported via Vietnamese border gates or borders under agreements signed between the Vietnamese Government and foreign governments or between agencies and representatives authorized by the Vietnamese Government and foreign governments;

d) Goods transported from exporting countries to importing countries not via Vietnamese border gates.

3. Aircraft and yachts are those used for commercial transportation of cargos, passengers and tourists.

Aircraft and yachts not used for commercial transportation of cargos, passengers and tourists are liable to excise tax under the Law on Excise Tax and the Finance Ministry's guidance.

4. Cars specified in Clause 4, Article 3 of the Law on Excise Tax include cars which, according to manufacturer standards, are designed to be used as ambulances, prison vans or hearses; cars designed with both seats and standing places for transporting 24 or more people; and cars operating in recreation, entertainment and sports areas which neither are registered for circulation nor move on roads.

5. Air-conditioners are those of a capacity of 90,000 BTU or less which, according to manufacturer standards, are designed only to be fitted aboard means of transport, such as cars, train carriages, ships, boats or aircraft.

Chapter II

TAX BASES

Article 4. Excise taxed prices

Excise taxed prices of excise tax-liable goods and services are specified in Article 6 of the Law on Excise Tax.

1. For domestically produced goods, the excise taxed price is determined as follows:

Of which, the selling price exclusive of value-added tax is determined under the law on value-added tax.

a) In case an excise tax-liable goods producer sells goods via its dependent cost-accounting establishments, the price serving as a basis for excise tax calculation is the selling price set by such an establishment. For a producer that sells goods via its agents selling goods at prices set by the producer for commissions only, the price serving as a basis for determining the excise taxed price is the commission-inclusive selling price set by that producer.

b) In case an excise tax-liable goods producer sells goods via trading establishments, the price serving as a basis for excise tax calculation is the selling price set by that producer, which must not be 10% lower than the average selling price set by such a trading establishment.

If the producer's selling price is 10% lower than the selling price set by the trading establishment, the excise taxed price shall be fixed by the tax agency.

2. For imported goods, the excise taxed price is determined as follows:

Excise taxed price = Import-duty calculation price + Import duty.

The import-duty calculation price is determined under the law on import duty and export duty. For imported goods eligible for import duty exemption or reduction, the taxed price is exclusive of the exempted or reduced import duty amount.

3. For excise tax-liable goods, the taxed price is inclusive of the tare value.

For bottled beer, if a deposit is made for bottles, producers and customers shall make quarterly finalization of such deposit and include the deposit sum equivalent to the value of irrecoverable bottles in excise taxed turnover.

4. For excise tax-liable processed goods, the taxed price is the selling price set by the processing-ordering establishment or the selling price of products of the same or similar kind at the time of goods sale.

5. For goods produced in the form of business cooperation between a producer and an owner of goods trademarks (brands) or production technologies, the excise taxed price is the selling price set by that owner.

6. For goods sold on installment or deferred payment, the excise taxed price is the one-off selling price of such goods, exclusive of the installment or deferred payment interest.

7. For services, the excise taxed price is the service charge set by the service provider.

a) For golf business, it is the selling price of membership cards or golf-playing tickets, inclusive of golf playing charge and deposit (if any). In case of trading in other goods or services not liable to excise tax, such goods or services are not liable to excise tax.

b) For casino or prized video game business, it is the turnover from such business minus (-) the prize paid to customers.

c) For betting business, it is the turnover from the sale of betting tickets minus the prizes.

d) For dance hall, massage parlor and karaoke bar business, it is the turnover from such business, inclusive of turnover from catering services and other associated services.

e) For lottery business, it is the turnover from the sale of tickets of lotteries permitted for business under law.

8. For goods and services used for barter, internal consumption, donation or sales promotion, their excised tax price is the excise taxed price of goods or services of the same or similar kind at the time of barter, internal consumption, donation or sales promotion.

9. Excise taxed prices of goods and services specified in this Article are inclusive of revenues in addition to goods selling prices or service charges (if any) enjoyed by production and business establishments.

a) Taxed prices are calculated in Vietnam dong. In case taxpayers have foreign currency turnover, such foreign currency 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 of turnover generation, for determination of taxed prices.

b) For goods, the time of turnover generation is the time of transfer of the right to own or use the goods to the purchaser, regardless of whether or not money has been collected; for services, the time of turnover generation is the time of completing service provision or the time of making a service provision invoice, regardless of whether or not money has been collected.

Article 5. Tax rates

Excise tax rates comply with the Excise Tariff specified in Article 7 of the Law on Excise Tax.

1. Cars designed for both passenger and cargo transportation as specified at Points 4d and 4g of the Excise Tariff are those designed with 2 or more rows of seats and fixed partitions between passenger compartments and cargo holds.

2. Cars running on gasoline in combination with bio-fuel or electricity as specified at Point 4e of the Excise Tariff are those which, according to manufacturer standards, are designed to have a mixed gasoline ratio not exceeding 70% of the total used fuel, and hybrid cars which, according to manufacturer standards, are designed to have a consumed gasoline ratio not exceeding 70% of the consumed fuel against the most gasoline-saving cars with the same seats and cylinder capacity on the Vietnamese market.

3. Cars running on bio-fuel or electricity as specified at Points 4f and 4g of the Excise Tariff are those which, according to manufacturer standards, are designed to run wholly on bio-fuel or electricity.

Chapter III

EXCISE TAX REFUND AND DEDUCTION

Article 6. Tax Refund

Excise tax refund complies with Article 8 of the Law on Excise Tax.

1. Goods temporarily imported for re-export as specified at Point a. Clause 1, Article 8 of the Law on Excise Tax include:

a) Imported goods for which excise tax has been paid but which are still kept in warehouses or yards at border gates, are under customs supervision and will be re-exported abroad;

b) Imported goods for which excise tax has been paid for transfer or sale abroad through Vietnam-based agents; goods imported for sale to foreign firms' vehicles on routes via Vietnamese seaports or to Vietnamese vehicles operating on international routes as prescribed by law;

c) Goods temporarily imported for re-export by the method of temporary import for re-export. When they are re-exported, the excise tax amounts have been paid on the volumes of actually exported goods will be refunded;

d) Imported goods for which excise tax has been paid. When they are re-exported abroad, the excise tax amounts already paid on the volumes of re­-exported goods will be refunded;

e) Goods temporarily imported for display at fairs, exhibitions or showrooms or for other purposes in a certain period under law for which excise tax has been paid. When they are re-­exported, the paid excise tax amounts will be refunded.

In case goods temporarily imported for re-­export are actually re-exported within the tax payment time limit specified by the law on import duty and export duty, excise tax needs not to be paid on the volumes of actually re-exported goods.

2. For goods which are raw materials imported for export production and processing, the excise tax amounts already paid on the volumes of raw materials used for the production of actually exported goods will be refunded.

3. Excise tax refund procedures, dossiers, order and competence for imported goods in cases specified in Clauses 1 and 2 of this Article are similar to those for import duty refund under the law on import duty and export duty.

4. Production and business establishments shall make tax finalization of overpaid excise tax amounts upon merger, separation, split-up, dissolution, bankruptcy, ownership change, assignment, sale, contracting or lease of state enterprises.

5. Tax refund specified at Point d. Clause 1, Article 8 of the Law on Excise Tax includes:

a) Tax refund under competent agencies' decisions according to law;

b) Tax refund under treaties to which the Socialist Republic of Vietnam is a contracting partv:

c) Tax refund in case paid excise tax amounts are larger than payable excise tax amounts as prescribed by law.

Article 7. Tax deduction

1. Taxpayers that produce excise tax-liable goods from excise tax-liable raw materials may have excise tax amounts paid for raw materials deducted upon the determination of excise tax amounts payable at the stage of production. The deductible excise tax amounts are equal to amounts of excise tax on raw materials used for the production of goods sold.

2. Excise tax amounts will be refunded upon declaration for excise tax payment.

Chapter V

ORGANIZATION OF IMPLEMENTATION

Article 8. Effect

1. This Decree takes effect on April 1, 2009; this Decree's excise tax-related provisions applicable to liquor and beer take effect on January 1, 2010.

2. This Decree replaces the Government's Decree No. 149/2003/ND-CP of December 4, 2003, and Article 1 of Decree No. 156/2005/ND-CP of December 15,2005, except excise tax-related provisions applicable to liquor and beer which remain effective through December 31, 2009.

Article 9. Implementation guidance

1. The Ministry of Finance shall guide the implementation of this Decree.

2. Ministers, heads of ministerial-level agencies, heads of government-attached agencies and presidents of provincial-level People's Committees shall implement this Decree.