Some new points of the Law on Excise Tax 2025

The Law on Special Consumption Tax 2025 (the “SCT Law 2025”) introduces a number of significant new regulations and amendments that directly affect business operations in Vietnam. A proper understanding of these changes enables enterprises not only to proactively adjust their business strategies but also to ensure compliance with tax regulations. Compared to the Law on Special Consumption Tax 2008, as amended and supplemented in 2014, 2016, and 2022 (the “SCT Law 2008”), the SCT Law 2025 revises the scope of taxable and non-taxable goods and services, as well as the applicable tax calculation methods for certain categories. In the article below, TNTP analyzes several noteworthy provisions of the SCT Law 2025.

1.Effective date of the SCT Law 2025

On 14 June 2025, at the 9th session of the 15th National Assembly, the SCT Law 2025 was officially passed. The Law consists of four (04) Chapters and eleven (11) Articles and takes effect from 1 January 2026. From this effective date, the SCT Law 2008 ceases to be effective.

The SCT Law 2025 is designed to provide clearer and more comprehensive regulations on taxable and non-taxable objects, tax calculation methods, taxable prices, and tax rates. These revisions aim to facilitate tax compliance, prevent abuse and profiteering, and contribute to the development of a fair and transparent competitive environment. 

2.Adjustments to taxable and non-taxable objects

• Taxable objects: Article 2 of the SCT Law 2025 introduces several notable amendments compared to the SCT Law 2008, including:
• Addition of taxable goods, including helicopters and gliders; and sugar-sweetened beverages containing more than 5g of sugar per 100 mL in accordance with national standards.
• Narrowing the taxable scope of air conditioners: only air conditioners with a capacity exceeding 24,000 BTU up to 90,000 BTU are subject to special consumption tax, excluding those designed by manufacturers solely for installation in means of transport such as automobiles, railway carriages, aircraft, helicopters, ships, and boats.
• Clarification of taxable objects for certain goods and services, including:
• Votive paper products: clearly stipulating that taxable objects do not include votive items classified as children’s toys or teaching aids.
• Tobacco, alcohol, and beer: supplementing provisions to ensure consistency and alignment with specialized sectoral legislation.
• Betting business: clearly defining taxable betting activities through the enumeration of sports betting, entertainment betting, and other betting forms permitted under the law.
• Non-taxable objects

Article 3 of the SCT Law 2025 supplements the list of goods and services not subject to special consumption tax, including:

• Goods produced, processed, or outsourced for processing by organizations or individuals and directly exported;
• Automobiles and vehicles operating within a limited scope, such as those used in heritage sites, hospitals, schools, and other specialized vehicles;
• Helicopters and gliders used for rescue operations, emergency response, and training purposes.

3.Introduction of the absolute tax calculation method, absolute tax rates, and adjustments to tax rates

• Absolute tax calculation method

The SCT Law 2025 introduces the absolute tax calculation method in addition to the percentage-based (ad valorem) tax calculation method previously provided under the SCT Law 2008.

Pursuant to Clause 2, Article 5 of the SCT Law 2025, the special consumption tax payable is determined as follows:

Special consumption tax payable = Special consumption tax applying the percentage-based tax calculation method + Special consumption tax applying the absolute tax calculation method (if any)

Where goods or services are subject to an absolute tax rate, the special consumption tax calculated under the absolute method shall be determined as follows:

Special consumption tax applying the absolute tax calculation method = Quantity of taxable goods x Absolute tax rate

• Tax rates and absolute tax amounts

Tax rates and absolute tax amounts are prescribed in Article 8 of the SCT Law 2025.

Accordingly, tax rates applicable to alcohol and beer are increased. In particular, tobacco products, in addition to being subject to ad valorem tax, will be subject to an absolute tax applied in accordance with a roadmap commencing in 2027.

The above are several notable new provisions of the SCT Law 2025, which will take effect from 1 January 2026. These amendments have had and will continue to have a direct impact on the business plans and tax compliance strategies of many enterprises. Therefore, staying updated and gaining a thorough understanding of the SCT Law 2025 is essential for businesses to ensure compliance and mitigate potential tax risks.

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