Client’s Question:
Dear Counsel, I have heard that the National Assembly has recently passed a new Law on Special Consumption Tax in 2025. Could you advise on what key changes this law introduces compared to the previous version?

Gattaca Law Firm Responds:
The 2025 Law on Special Consumption Tax (SCT), effective from January 1, 2026, was enacted to address shortcomings in the practical implementation of the previous legislation and to simplify tax administration procedures, enhance transparency, and improve the efficiency of state budget revenue. One notable change is the expansion of taxable objects, such as the inclusion of sugar-sweetened beverages with sugar content above 5g/100ml, medium-capacity air conditioners, and revised descriptions for goods like alcohol, beer, tobacco, and automobiles to align with relevant sectoral regulations.

The law also amends the list of non-taxable goods, for instance, aircraft and vessels used for commercial, rescue, or agricultural purposes, as well as specialized vehicles operating within amusement parks, hospitals, and schools. Conversely, goods traded between non-tariff zones are no longer exempt from SCT as previously provided.

In terms of tax calculation methods, besides the existing ad valorem method (percentage-based), the new law introduces specific tax rates (absolute amounts) for special goods such as cigarettes and cigars. It also provides clarified tax bases for promotional goods or those used for special purposes or equivalents.

A significant reform is the tax rate increase roadmap set from 2027 to 2031, applying to tobacco, alcoholic beverages, and sugary drinks. For example, the SCT on cigarette packs will increase by VND 2,000 annually, while the tax rate on spirits may rise from 65% to 90%. This measure aims to both control consumption harmful to public health and boost government revenues.

Lastly, the law revises provisions on tax refunds, notably disallowing refunds in cases of dissolution, merger, or business transformation, but allowing refunds for uncredited SCT paid on petroleum used in the production of biofuel.

In summary, the 2025 SCT Law marks a significant step in tax reform, requiring businesses and taxpayers to promptly update their compliance practices to ensure adherence to the new legal framework.

Anh Tuan

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