• The Decree 81 has clearly identified business which carry out commercial promotions in many forms such as direct promotions, promotions via companies which provides services on promotion, promotions via distributors.
• The Decree also defines some exceptional cases to allow cash usage for promotions. According to the new regulation, supports in the form of cash are requested to notify to legal authorizes before actually executing the promotions.
• Based on the new Decree, some types of products must not be used for promotions such as milk products for infants (replacing breast milk), alchohol, cigarettes, lotteries. In the case of medication, unless used for promotions granted to distributors of pharmacy, is also forbidden to be used for promotions.
• Regrading the price reduction promotion, the old maximun proportion allowed for discounts (50%) is removed for fresh products, products and services in the period of liquidation, changing location of business, products under the policy of price stability of the State.
• For some special promotion campaigns such as centralized promotion introduced by State authorizes or promotions on holiday such as Tet, Independent day…, commercial promotions under the decision of the Prime Minister, the value of discount can be up to 100% compared to the old capped value at 50%
• There is also a new duration for total promotion program belonging to price reduction – 120 days per annum. This is also longer than the old cap, which is 90 days. New duration is applicable for all types of goods or services.
• Companies which have not registered the multi-level marketing business are forbidden to conduct promotions under this form.
• As the online market is growing at a speedy rate, Decree 81 also adds more specific details for the commercial promotions provision via internet platform for e-commerce website/wap/ app.
• However, there is also some new strict requirements. Specifically, there is a reduction in the deadline to notify the commercial promotions (7 days to 3 days) before implementing the promotions.
• There are some special cases where businesses are not requested to notify promotions: firstly, the total value of promotions do not exceed 100 million VND; secondly, sales and promotion activities are implemented only online.
• There is also a reduction in the timeline for competent authorities to acknowledge the notification of commercial promotion (7 days to 5 days).
• Moreover, if the promotion is carried out by more than 2 parties, all the joining parities must have provided information to the competent authorities.
To sum up, Vietnam is one of most complicated countries in the area of Asia Pacific for compliance of accounting and tax. Follow S4B Vietnam – an expert that has in – depth knowledge and experiences locally and globally – is the optimal way to help business owner to navigate the ever- changing policy regarding accounting and tax in the country.