Vietnam's special consumption tax in 2026: newly taxed products and the impact on costs

The short answer

Special Consumption Tax (SCT) Law No. 66/2025/QH15 took effect on 1 January 2026, replacing the 2008 law. The four biggest changes are:

• Soft drinks with more than 5g of sugar per 100ml become taxable, at 8% from 1 January 2027 and 10% from 1 January 2028.

• Beer and spirits of 20 degrees or more rise from 65% (2026) to 90% (2031), by 5% a year. Spirits below 20 degrees rise from 35% to 60%.

• Cigarettes keep the 75% rate, plus a specific (per-pack) tax rising from VND 2,000 per pack (2027) to VND 10,000 per pack (2031).

• Credit and refund mechanisms are widened, including for companies being dissolved or declared bankrupt with uncredited SCT.

For manufacturers and importers, these changes directly affect costs, prices and product planning over the next five years.

The overall picture: a roadmap, not a shock

A notable feature of the new law is its phased approach. Rather than a single increase, most of the rises are spread from 2027 to 2031. Businesses have time to prepare, but no excuse to be caught off guard.

Product	2026	2027	2028	2031
Beer	65%	70%	75%	90%
Spirits of 20 degrees or more	65%	70%	75%	90%
Spirits below 20 degrees	35%	40%	45%	60%
Cigarettes	75%	75% + VND 2,000/pack	75% + specific tax per roadmap	75% + VND 10,000/pack
Soft drinks with more than 5g sugar/100ml	Not yet taxed	8%	10%	10%

Note: intermediate rates for beer and spirits rise by 5% a year. The specific tax on cigarettes follows the roadmap in Article 8 of the 2025 SCT Law.

The taxable list also continues to include familiar categories: motor vehicles with fewer than 24 seats, aircraft, yachts, petrol, playing cards, votive paper and services such as casinos and golf. For air conditioners, the law sets the taxable scope by capacity, from 24,000 BTU to 90,000 BTU.

Sugary drinks: a new product with wide reach

Under the law, soft drinks as defined by the Vietnamese National Standard (TCVN) with more than 5g of sugar per 100ml are taxable. The scope is wider than many assume. Beyond carbonated soft drinks, it may cover:

• energy drinks and sports drinks;

• bottled tea and coffee;

• fruit juices and cereal-based drinks;

provided they fall within the TCVN definition of soft drinks and exceed the sugar threshold.

An impact already felt in 2026: the Ministry of Finance has confirmed that these products do not qualify for the 2% VAT reduction under Resolution 204/2025/QH15, even though SCT on them only starts in 2027. Beverage companies that applied the 8% VAT rate to these products in error need to correct their invoices and file amended returns.

Illustrative price impact: a product with a pre-tax selling price of VND 10,000 per bottle.

Year	SCT	VAT base	VAT (10%)	Price including taxes	Increase vs 2026
2026	0	10,000	1,000	11,000	–
2027	800	10,800	1,080	11,880	+8%
2028	1,000	11,000	1,100	12,100	+10%

Note the "tax on tax" effect: VAT is calculated on a price that already includes SCT. As a result, the final price rises by the full SCT rate, not less.

Five things businesses should prepare now

1. Review the product range against the 5g/100ml threshold. Test actual sugar content and compare it with labels and product declarations. Products close to the threshold need an early decision: keep the formula or change it.

2. Consider reformulation. Cut sugar below the threshold, or develop low-sugar and sugar-free lines. This is the direction the policy is designed to encourage. Allow time for testing, re-declaration and packaging changes.

3. Rebuild pricing models for the five-year roadmap. For beer, spirits and tobacco, tax rises every year. Pricing, margins and marketing budgets need to be planned across 2027–2031, not just for next year.

4. Review distribution agreements. Add price adjustment clauses for tax changes, specify who bears additional tax costs, and set out when new prices take effect.

5. Take care with the taxable price when selling through related trading companies. The law has specific rules on the SCT taxable price where a manufacturer sells through a related trading company. Tax and customs authorities routinely scrutinise this. Intra-group distribution structures should be reassessed from both an SCT and a transfer pricing perspective.

Points in businesses' favour

The new law does not only raise taxes. It also resolves several long-standing issues:

• Wider SCT credits and refunds, including for imported materials used to manufacture or process goods for export, for companies dissolved or declared bankrupt with uncredited SCT, and refunds under international treaties.

• Additional non-taxable cases, reducing classification disputes.

• Clearer rules on the tax base, making it easier for businesses to determine their obligations.

Illustrative case

Company N produces bottled tea and has 12 product codes. Testing showed that 7 codes contain 6–9g of sugar per 100ml, and 2 codes contain 5.2–5.5g per 100ml.

The company made three decisions:

• keep the formula for the 7 "full-flavour" codes and plan price increases in line with the roadmap;

• reformulate the 2 borderline codes to below 5g per 100ml, completing re-declaration in 2026;

• launch a sugar-free line to protect market share.

In parallel, it reviewed its contracts with 40 distributors to add price adjustment clauses, and corrected 2026 invoices on which the 8% VAT rate had been applied in error.

FAQs

When do sugary soft drinks become subject to SCT?

From 1 January 2027 at 8%, and 10% from 1 January 2028. The product must be a soft drink under TCVN with more than 5g of sugar per 100ml.

What is the SCT rate on beer in 2027?

70%, up from 65% in 2026, rising by 5% a year to 90% in 2031.

Will the ad valorem rate on cigarettes increase?

No. It stays at 75%, but a specific tax is added, starting at VND 2,000 per pack in 2027 and rising to VND 10,000 per pack in 2031.

Can a company being dissolved recover uncredited SCT?

Yes. This case was added by the 2025 SCT Law, subject to the prescribed conditions and procedures.

Legal basis

• Special Consumption Tax Law No. 66/2025/QH15 dated 14 June 2025 (Articles 2 and 8).

• Resolution No. 204/2025/QH15 and Decree No. 174/2025/ND-CP on VAT reduction.

• VAT Law No. 48/2024/QH15, as amended by Law No. 149/2025/QH15.

• Decree No. 255/2026/ND-CP on tax administration of related-party transactions.

How W&A can help

Special consumption tax directly affects selling prices and margins. For the beverage, alcohol and tobacco sectors, it is one of the most important strategic variables of the next five years. W&A supports businesses with:

• Product range review to determine the scope of SCT under the new law.

• Tax impact modelling on costs, prices and margins across the 2027–2031 roadmap.

• Review of intra-group distribution structures from an SCT taxable price and transfer pricing perspective.

• Review of distribution and agency agreements: adding price adjustment mechanisms for tax changes.

• SCT credits and refunds, and support with explanations in tax and customs audits.