Tax policy for duty-free shops in Vietnam

The Circular 107-TC/TCT dated December 30, 1993 guiding the implementation of tax policy for duty-free shops licensed to sell goods to customers on exit and transit at seaports and international airports in Vietnam.

1.Import and export tax:

Goods imported from abroad into Vietnam for sale at duty-free shops are exempt from import tax.

Goods purchased by stores from the domestic market for sale at stores are considered exports and must pay export tax according to the export tax of each item specified in the export tariff.

For goods imported for sale at duty-free shops, if they are sold to the wrong object or consumed in the Vietnamese market, they will in all cases be considered tax evasion and the store must pay the import tax arrears. was exempted and fined twice the hidden tax.

2.Sales tax and profit tax:

  • Sales tax is calculated on the entire sales revenue (regardless of revenue from sales of imported goods and sales of goods manufactured in Vietnam) at the rate of sales tax applicable to export business. %. In case the store opens and records its accounting books in accordance with regulations and fully meets the conditions approved by the tax authority, sales tax shall be paid at the rate of 14% on the difference between the selling price and the purchase price.
  • Income tax payable is 45% on taxable profits.

For tax-free shops with the participation of foreign parties, depending on the form of business organization, sales tax and profit tax shall be implemented as follows:

a) In case Vietnamese enterprises operate duty-free shops in the form of sales agents for foreign parties:

  • Vietnamese enterprises pay sales tax at the rate of 12% on the commission they are entitled to and pay income tax according to the regime.
  • The foreign side shall pay sales tax and profit tax at the gross rate of 8% calculated on the entire amount paid by the Vietnamese enterprise for selling agent goods.

b) In case Vietnamese enterprises cooperate in business with foreign parties to operate duty-free shops in the form of revenue division:

  • Vietnamese enterprises pay sales tax on distributed revenue and profit tax according to regulations.
  • The foreign party shall pay sales tax and profit tax at the gross rate of 8% of the total divided revenue.

c) In case Vietnamese enterprises cooperate with foreign parties to operate tax-free shops in the form of profit sharing, the shops shall pay sales tax and profit tax as prescribed for Vietnamese enterprises and When the foreign party remits the distributed profits abroad, he/she is not required to pay tax on repatriation of profits abroad.

d) Foreign-invested enterprises and foreign parties to business cooperation contracts that have been granted investment licenses by the State Committee for Cooperation and Investment in order to participate in the business of duty-free shops shall pay sales tax and profit tax as specified in the investment license.

3.Tax on transferring profits abroad:

Foreign parties participating in foreign-invested enterprises or business cooperation contracts that are granted investment licenses by the State Committee for Cooperation and Investment shall pay tax on repatriation of profits abroad at the prescribed tax rates. investment license.

Foreign parties involved in the business of duty-free shops in other forms are not required to pay tax on repatriation of profits abroad.

4.Other taxes:

Other taxes such as income tax for high-income earners, land rent, license tax, etc., shall be paid in accordance with current regulations

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