Decree 108 providing guidance on

Special Consumption Tax (“SCT”)

Tax Alert - Tax and Corporate Services
November 2015

On 28 October 2015, the We would like to summarize the notable changes under the Decree 108 as below.
Government issued Decree • Supplement some objects not liable to SCT, including (i) goods imported from
108/2015/ND-CP (“Decree 108”) abroad into non-tariff zones, (ii) domestic goods sold into non-tariff zones for sole
guiding on the implementation use in the non-tariff zones, and (iii) goods traded between the non-tariff zones,
of some articles under the except for goods brought into the non-tariff zones having inhabitants occupation
provision of the Law on SCT without separated fences and passenger cars with less than 24 seats.
and the Amended Law on SCT.
• Imported goods liable to SCT shall also be subject to SCT upon importation from
overseas and sales to the domestic market, accordingly:
* SCT taxable price at the import stage = taxable price for import duty
calculation + import duty
Selling price Environmental
* SCT taxable price exclusive of VAT protection tax (if any)
=
at the trading stage 1+ SCT rate
• Amend the taxable price for some cases:
–– In case entities importing SCT-liable goods (excluding passenger cars with
less than 24 seats and all types of petrol) and/or producing SCT-liable products
(excluding passenger cars with less than 24 seats) sell SCT-liable goods to
trading entities, the SCT taxable price is the selling price of such entities,
but not over 7% lower than the average selling price of trading entities.
Previously, the price gap is 10%.
–– The trading entities under this provision are the ones not having relationship of
parent company or subsidiary with the entity. The relationship of parent company
and subsidiary is determined in accordance with the Law on Enterprises.
–– For entities importing passenger cars with less than 24 seats, the SCT taxable
price is the selling price of such entities, but not over 105% lower than the
cost of such imported car. The cost of the imported cars is determined based
on the taxable price for import duty calculation plus import duty (if any) and
plus the SCT liability at the import stage (if any).
–– For entities manufacturing and assembling passenger cars with less than 24
seats, the taxable price is the selling price of such entities, but not over 7%
lower than the average selling price of the trading entities.
–– SCT taxable price for SCT calculation of tobacco includes the compulsory
contributions and other support fee in accordance to the Law on Prevention
and Control of tobacco harms.
• The SCT amount paid at the import stage will be credited against the SCT
payables upon the sales to domestic market. The non-creditable SCT amount
shall be deductible for CIT calculation purpose.
Decree 108 takes its effect on 01 January 2016 and supersedes Decree 26/2009/
ND-CP and Decree 113/2011/ND-CP.

© 2015 KPMG Tax and Advisory Limited, a Vietnamese limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved.
 Contact Us
KPMG Tax and Advisory Limited

Warrick Cleine
Chairman & CEO
Vietnam and Cambodia
Tax Managing Partner

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Do Thi Thu Ha, Senior Partner
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Le Thi Kieu Nga, Partner
Nguyen Thu Huong, Partner
Nguyen Ngoc Thai, Director
Nguyen Hai Ha, Director
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Ho Dang Thanh Huyen, Director
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Ho Chi Minh City

Nguyen Cong Ai, Partner

Ninh Van Hien, Partner
Ta Hong Thai, Partner
Ho Thi Bich Hanh, Partner
Huynh Ngoc Nhan, Director
Thach Tuan Anh, Director
Nguyen Thanh Tam, Director
Terresa Yiu, Director
Watari Takashi, Japanese Desk

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Ho Chi Minh City.

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The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely
information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information
without appropriate professional advice after a thorough examination of the particular situation.
© 2015 KPMG Tax and Advisory Limited, a Vietnamese limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved.