Decree No. 14/2019/ND-CP dated February 01, 2019 amendments Decree 108/2015/ND-CP providing guidelines of the Law on special excise duty and the Law on amendments to the Law on special excise duty

DECREE

ON AMENDMENTS TO THE GOVERNMENT’S DECREE NO. 108/2015/ND-CP DATED OCTOBER 28, 2015 PROVIDING GUIDELINES FOR SOME ARTICLES OF THE LAW ON SPECIAL EXCISE DUTY AND THE LAW ON AMENDMENTS TO THE LAW ON SPECIAL EXCISE DUTY

Pursuant to the Law on government organization dated June 19, 2015;

Pursuant to the Law on special excise duty dated November 14, 2008 and the Law on amendments to the Law on special excise duty dated November 26, 2014;

Pursuant to the Law on Tax administration dated November 29, 2006, and the Law on amendments to the Law on Tax administration dated November 20, 2012;

Pursuant to the Law on amendments to some Articles of the Law on Value-added tax, the Law on special excise duty and the Law on Tax administration dated April 06, 2016;

At the request of the Minister of Finance;

The Government promulgates the Decree on amendments to the Government’s Decree No. 108/2015/ND-CP dated October 28, 2015 providing guidelines for some articles of the Law on special excise duty and the Law on amendments to the Law on special excise duty.

Article 1. Amendments to some Articles of the Government’s Decree No. 108/2015/ND-CP dated October 28, 2015

1. Clause 3 Article 3 is amended as follows:

“3. Aircraft, cruise ships for the transport of cargo, passengers, tourists; aircraft serving the following purposes, including: spraying of pesticides, firefighting, film-making, photography, geodetic and cartographic activities, national defense and security.

Aircraft and cruise ships not serving the transport of cargo, passengers, tourists; aircraft not serving the following purposes, including: spraying of pesticides, firefighting, film-making, photography, geodetic and cartographic activities, or national defense and security shall be subject to special excise tax according to the Law on special excise duty and guidelines of the Ministry of Finance.”

2. Clause 3 Article 6 is amended as follows:

“3. Documents and procedures for refund of special excise tax:

a) Documents and procedures for refund of special excise tax on goods temporarily imported for re-export in the cases mentioned in Clause 1 of this Article are the same as those for refund of import duties laid down in Article 34 of the Government’s Decree No. 134/2016/ND-CP dated September 01, 2016 and its amending documents (if any).

b) Documents and procedures for refund of special excise tax on materials imported for manufacturing or processing of goods for export as regulated in Clause 2 of this Article are the same as those for refund of import duties laid down in Article 36 of the Government’s Decree No. 134/2016/ND-CP dated September 01, 2016 and its amending documents (if any).

If both the requested amounts of refunds of import duty and special excise tax are specified in the import declaration, the documents for refund of import duty are also the documents for refund of special excise tax.”

3. Article 7 is amended as follows:

“Article 7. Tax deduction

1. When determining the special excise tax payable, a taxpayer that manufactures goods subject to special excise tax from materials subject to special excise tax may deduct the paid special excise tax on the quantity of materials imported (including the special excise tax paid according to the Decision on tax imposition made by the customs authority, except decisions made by customs authorities on imposition of penalties for tax fraud or tax evasion) or purchased from another domestic manufacturer. The amount of deductible special excise tax corresponds to the amount of special excise tax on materials used for manufacturing goods that are sold and subject to the special excise tax.

For biofuel, the amount of deductible special excise tax in the period depends on the amount of paid special excise tax on a unit of material purchased in the previous period for manufacturing of biofuel.

An enterprise licensed to manufacture biofuel shall declare and deduct special excise duty at the tax authority in charge of the area where its headquarters is located. The special excise tax on materials used for manufacturing biofuel that remains after deduction (including the special excise tax that remains from the period of January, 2016) may be offset against the special excise tax payable on other goods/ services in the period. The special excise duty on materials used for manufacturing biofuel that remains after offsetting shall be carried forward to the next period or refunded.

Documents and procedures for refund of special excise tax are as follows:

- The manufacturer of biofuel shall prepare the request for refund of amounts paid to state budget and offsetting against other taxes payable (if any) using the form No. 01a/DNHT enclosed herewith.

- The manufacturer of biofuel shall submit the application for refund of the special excise tax that remains after deduction to the tax authority in charge of the area where its headquarters is located for consideration in accordance with applicable regulations.

- Tax authorities shall assume responsibility to process applications for refund of special excise tax as regulated in this Clause in accordance with Article 60 of the Law on Tax administration and the Law on amendments to the Law on Tax administration and their amending documents (if any).

- Based on the Order for refund of amounts paid to state budget given by the tax authority, the State Treasury shall refund the collected amount of special excise tax on materials used for manufacturing biofuel to the manufacturer. Funding for paying refunds of special excise tax is derived from the revenue on special excise tax of the central-government budget.

2. Payers of special excise tax on goods subject to special excise tax at import may deduct special excise tax paid at importation, including special excise tax paid according to the Decision on tax imposition made by the customs authority, except decisions made by customs authorities for imposition of penalties for tax fraud or tax evasion, from special excise tax payable on goods sold domestically. Deductible special excise tax is equal to special excise tax on goods subject to special excise tax that are sold after import, and must not exceed the special excise tax on goods sold domestically. The taxpayer may include special excise tax that remains after deduction in expenses when calculating corporate income tax.

3. Conditions for deducting special excise tax:

a) When importing materials subject to special excise tax for manufacturing goods subject to special excise tax, and when importing goods subject to special excise tax, the receipts for special excise tax payment at importation shall be used as the basis for special excise tax deduction.

b) If materials are purchased from a domestic manufacturer:

- A sale contract which specifies that the materials are directly manufactured by the seller; the copy of the Certificate of business registration of the seller which must bear the seller's signature and seal.

- Bank transfer receipts.

- VAT invoices are the basis for deduction of special excise tax. The amount of special excise tax paid by the buyer when buying materials equals (=) taxable price multiplied (x) by special excise tax rate; where:

The special excise tax shall be deducted when making special excise tax declaration and the special excise tax payable is calculated by adopting the following formula:

If special excise tax payable or paid on the quantity of materials used for manufacturing of goods sold in period cannot be determined yet, the figures of the previous period may be used to calculate the deductible special excise tax and the actual amount shall be determined at the end of the quarter or year. In any case, deductible special excise tax must not exceed the special excise tax on the quantity of materials set out in technical regulations applied to such products.

4. Payers of special excise tax shall use the form No. 01/TTDB (special excise tax declaration) and the form No. 01-1/TTDB (Deductible special excise tax) enclosed herewith.”

Article 2. Effect and implementation

1. This Decree comes into force from March 20, 2019.

2. Ministers, heads of ministerial-level agencies, heads of the Government’s affiliates, Chairpersons of people’s committees of provinces and central-affiliated cities, and relevant organizations and individuals shall implement this Decree./.