CIRCULAR

PROVIDING GUIDANCE FOR THE COLLECTION OF EXCISE TAXES

Proceeding from Resolution No.473-NQ/HDNN8 of September 10, 1991, of the Council of State and Decree No.326-HDBT of October 19, 1991, of the Council of Ministers on amending excise and slaughter taxes,
Proceeding from Decree No.52-CP of September 9, 1996, of the Government on adjusting excise tax rates,
The Ministry of Finance provides the following guidance for their implementation:

I. EXCISE TAX RATES

1. The independent-accounting business establishments, namely the State enterprises, joint-stock companies, limited-liability companies, private businesses, private enterprises, businesses operating under the Law on Foreign Investment and the other foreign organizations and individuals doing business in Vietnam, economic units of the State administrative agencies, Party and people�s organizations and the armed forces, and the other independent-accounting business organizations shall pay their excise tax at the fixed rate of 850,000 VND a year.

2. The business establishments, branches, stores and shops which are dependent accounting or daily financial reporting units and cooperatives and production groups shall pay each an excise tax of 550,000 VND a year.

3. The business establishments described in Point 2 which run stores, shops, sales counters and service points in places other than the locations of the establishments described in Point 2 shall pay an excise tax of 325,000 VND a year for each store, shop, sales counter and service point.

For example: Company A is an independent-accounting unit which has its head office in Tran Hung Dao street, Hanoi City. The company has two stores (or branches...), Store B in Ly Thuong Kiet street and Store C in Truong Chinh street. Company A shall pay an excise tax of 850,000 VND a year; Store B in Ly Thuong Kiet street and Store C in Truong Chinh street shall pay each an excise tax of 550,000 VND a year.

If Store B in Ly Thuong Kiet street runs two shops (or sales counters or service points...), one in Hang Dao street and the other in Hang Trong street, Store B shall pay an excise tax of 550,000 VND a year for itself, and its two shops in Hang Dao and Hang Trong streets shall pay each an excise tax of 325,000 VND a year.

4. The following subjects shall pay their excise taxes as prescribed in the table below:

- Individual business and production households.

-Government officials, public employees, cooperative members and laborers in non-State enterprises who sign contracts, bear the costs and take all responsibility for the results of their production and business.

- Groups of Government officials, public employees, cooperative members and laborers who share business contracts shall pay their excise taxes in accordance with the provisions of Point 3. In case the groups of Government officials, public employees, cooperative members and laborers who share business contracts but who operate separately in their shared business shall also pay excise taxes for their separate business operations.

For example: Store A of Company X assigns a contract to three of its employees, for which the store is required to pay 900,000 VND to the company each month. These three employees run three different sales counters in Store A, so each month, each of them shall contribute 300,000 VND to make up the 900,000 VND that the store has to pay to the company, and each of them as well as Store A are required to pay excise taxes.

- Business units which are joint-stock companies, limited liability companies, cooperatives, production units..., whose member units operate their businesses independently and only make certain contributions to their parent units for common management expenses shall pay excise taxes on their own.

Example 1: An economic unit in transport has 10 trucks which belong to 10 different owners (drivers) who are responsible for their own business performance and who only contribute each a certain amount of money to the unit for common management expenses. In this case, the truck owners shall pay excise taxes set for individual business households.

Example 2: An economic unit in transport has 10 trucks, of which four operate as part of the unit and the six others operate independently and are responsible for their own business performance, each contributing to the unit only a certain amount of money for common management expenses. In this case, the economic unit shall pay the excise tax set for it while the six independently operating trucks shall pay the excise taxes set for individual business households.

The excise tax rates for the tax payers described in Point 4 are as follows:

Unit: Dong

II. PAYING EXCISE TAXES

1. Schedule for payment of excise taxes:The business unit which operates its business in the first six months of a year shall pay the excise tax for the whole year and the business unit which operates its business in the last six months of a year shall pay 50% the excise tax of a year. The business unit which is operating its business shall pay its excise tax in the first month of the solar year; the business unit which starts its business operation shall pay its excise tax in the first month of its operation.

2. Place for payment of excise taxes:

The business unit shall pay its excise tax at the tax office where it registers its tax payment. In case the business unit has many stores and shops in different places of the same locality, it shall pay the excise taxes for itself and its stores and shops in the same locality. Its stores and shops in other localities shall pay their excise taxes in the localities where they are located.

After paying the excise taxes, the company and its stores shall each be issued by the tax office with a card recording clearly the name of the store, its address, its business line, etc., to be presented to the business inspection authority at request.

The business units which have no fixed location, such as those operating in long-distance trade, mobile business, construction, transport or other self-employed trades, shall pay their excise taxes in the localities where they are headquartered or where their business permits are issued.

III. IMPLEMENTATION

1. In the late months of the year, the Tax Departments of the provinces and cities shall review the operations of all business and production units in their localities, making investigation into the actual turnovers and revenues of those units so as to classify and rate their taxes in accordance with the provision of the table of excise tax rates. On that basis, they shall calculate, check and announce publicly the taxes to be paid. The review of the tax-paying units and the calculation, check and announcement of the yearly excise taxes shall be completed prior to December 31 of the previous year.

2. The business units have the responsibility to pay in full and in time their excise taxes as announced by the tax office. A fine of 0.2% on the total tax amount shall be levied for each day of delay in excise tax payment. An evasion of excise tax shall result in a fine three times the amount of the evaded tax.

3. This Circular takes effect from January 1st, 1997. The earlier stipulations of the Ministry of Finance which are contrary to this Circular are now annulled. In the course of the implementation of this Circular, any problems, complaints and recommendations should be reported in a timely manner to the Ministry of Finance for further study and additional guidance.