Subscription 52 (2/2003) 31 July 2003

NATIONAL ASSEMBLY SOCIALIST REPUBLIC OF VIETNAM

Independence - Freedom - Happiness
No. 08-2003-QH11

LAW
ON
AMENDMENT OF AND ADDITION TO
A NUMBER OF ARTICLES OF THE
LAW ON SPECIAL SALES TAX

Pursuant to the 1992 Constitution of the Socialist Republic of Vietnam as

amended by Resolution 51-2001-QH10 of Legislature X of the National
Assembly at its 10th session on 25 December 2001;

This Law amends and adds to a number of articles of the Law on Special Sales
Tax dated 20 May 1998.

Article 1

To amend and add to a number of articles of the Law on Special Sales Tax:

1. Article 1 shall be amended and added to as follows:

"Article 1 Goods subject to special sales tax

The following goods and services shall be subject to special sales tax:

1. Goods:

(a) Cigarettes, cigars;

(b) Spirits;

(c) Beers;

(d) Automobiles of less than 24 seats;

(dd) Assorted types of petrol, naphtha, reformate components, and

other components to be mixed in petrol;

(e) Airconditioners with capacity of 90,000 BTU or less;

(g) Playing cards;

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(h) Votive paper.

2. Services:

(a) Operating dancehalls, massage lounges, karaoke parlours;

(b) Operating casinos, offering jackpot games;

(c) Operating betting entertainments;

(d) Golf: selling memberships and tickets for playing golf;

(dd) Operating lotteries."

2. Clause 6 of article 6 shall be amended and added to as follows:

"6. In the case of domestically produced spirits and beer and

businesses being casinos, jackpot games or golf, the Government
shall provide specific regulations on the prices to be used for
calculating special sales tax.

The prices used for calculating special sales tax in respect of goods
and services provided for in this article shall include any additional
charges which business establishments are permitted to collect.

When taxpayers have revenue from purchases or sales in foreign

currency, they shall be required to convert their revenue in foreign
currency into Vietnamese dong at the foreign exchange rate
published by the State Bank of Vietnam at the time such revenue
arises for the purpose of determining the prices to be used for
calculating special sales tax."

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Subscription 52 (2/2003) 31 July 2003

3. Article 7 shall be amended and added to as follows:

"Article 7 Tax rates

Special sales tax rates applicable to goods and services shall be provided
for in accordance with the following Special Sales Tax Tariff:

SPECIAL SALES TAX TARIFF

No. Goods and Services Tax Rate (%)

I. Goods:
1. Cigarettes and cigars:
(a) Filtered cigarettes produced mainly from imported raw 65
materials, cigars
(b) Filtered cigarettes produced mainly from domestically 45
produced raw materials
(c) Cigarettes without filters 25
2. Spirits:
(a) Spirits from 40° or above 75
(b) Spirits from 20° to below 40° 30
(c) Spirits below 20°, including wines brewed from fruit 20
(d) Medicinal spirits 15
3. Beer:
(a) Bottled beer, canned beer, fresh beer 75
(b) Draught beer 30
4. Automobiles:
(a) Automobiles of 5 seats or less 80
(b) Automobiles of 6 to 15 seats 50
(c) Automobiles of 16 to under 24 seats 25
5. Assorted types of petrol, naphtha, reformate components, and 10
other components used to mix in petrol
6. Airconditioners with capacity of 90,000 BTU or less 15
7. Playing cards 40
8. Votive paper 70
II. Services:
1. Operating dancehalls, massage lounges, karaoke parlours 30
2. Operating casinos, offering jackpot games 25
3. Operating betting entertainments 25
4. Golf: selling memberships and tickets for playing golf 10
5. Operating lotteries 15

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Subscription 52 (2/2003) 31 July 2003

4. Clause 1 of article 11 shall be amended and added to as follows:

"1. An establishment producing goods or providing services subject to

special sales tax shall pay special sales tax to the State Budget at
the location of production or business.

The time-limit for monthly tax payment shall be no later than the
twenty fifth day of the following month."

5. To add clause 4 to article 11 as follows:

"4. The Government shall provide specific regulations on the

procedures for tax declaration and payment in conformity with the
reform of administrative procedures, raising the sense of
responsibility before the law of business establishments, and
increasing the work of the tax office in conducting inspections and
dealing with breaches, ensuring tight and effective administration
of tax collection."

6. Clause 2 of article 14 shall be amended and added to as follows:

"2. To issue notices to taxpayers stating the amount of tax payable

pursuant to Government regulations; to activate taxpayers to make
payment within the correct time-limits; where a taxpayer fails to
pay tax within the time-limit stipulated in the notice, to issue a
notice stating the amount of tax payable and the fine for late
payment as stipulated in clauses 2 and 3 of article 17 of this Law;
and if the taxpayer still fails to make full payment of the tax and
fine pursuant to the notice, the tax office shall have the right to
enforce the measures stipulated in clause 4 of article 17 of this Law
in order to ensure collection of the full amount of the tax and fine;
and where a taxpayer continues not to pay tax and fines in full after
enforcement measures have been applied, to refer the file to the
competent State body for resolution in accordance with the
provisions of law."

7. To add sub-clause (dd) to clause 1 of article 15 as follows:

"(dd) Has declared a selling price as the basis for calculating special sales
tax being ten (10) per cent less than the market selling price of such
goods or services."

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Subscription 52 (2/2003) 31 July 2003

8. Article 16 shall be amended and added to as follows:

"Article 16 Cases considered for exemption from and reduction of

special sales tax

1. Where the establishment which produces goods subject to special

sales tax is adversely effected by natural disaster, war or other
contingencies, it shall be considered for exemption from or
reduction of special sales tax.

2. Establishments producing or assembling automobiles shall be

entitled to a reduction of the tax rates in the Special Sales Tax
Tariff stipulated in article 7 of this Law as follows:

- Year 2004, seventy (70) per cent reduction.

- Year 2005, fifty (50) per cent reduction.

- Year 2006, thirty (30) per cent reduction.

- As from year 2007, they shall pay the correct rate as

stipulated.

The Government shall provide detailed regulations on the tax exemptions

and reductions provided for in this article."

Article 2

This Law shall be of full force and effect as of 1 January 2004.

Article 3

The Government shall provide detailed regulations and guidelines for

implementation of this Law.

This Law was passed by Legislature XI of the National Assembly of the Socialist
Republic of Vietnam at its 3rd session on 17 June 2003.

Chairman of the National Assembly

NGUYEN VAN AN

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