Special Consumption Tax and Quality Inspection when Establishing a Brewery and Distillery Plant in Vietnam
Vietnam is among the major beer and alcohol consumption markets in Asia. Attractive business opportunities come with stringent legal requirements, especially the special consumption tax (SCT) and product quality inspection. For foreign investors or domestic enterprises planning to build a brewery or distillery plant, understanding and complying with relevant regulations is a matter of survival.
Breweries and distilleries must understand their obligations under special consumption tax
Special consumption tax is an indirect tax imposed on goods that the State does not encourage consumption of, including beer and spirits. This tax rate is high and accounts for a large portion in production cost, directly affecting product pricing strategy.
How to calculate SCT for beer and spirits
According to the Special Consumption Tax Law and guiding decrees, SCT applied to beer and alcohol is calculated as:
SCT = Taxable price × Tax rate
Where:
The taxable price for beer is the selling price excluding VAT and SCT.
Current tax rates:
Beer: 65%
Spirits over 20°: 65%
Spirits 20° or below: 35%
Note: These tax rates may change depending on economic policy, budget needs, and the government’s orientation in restricting consumption.
Important notes on declaring and paying SCT
Enterprises need to register for SCT declaration with the tax authority from the start of production operations.
Declaration and payment must be done timely and using correct forms to avoid late‑payment fines or retroactive tax assessments.
If the enterprise produces craft beer or traditional alcohol, it must obtain an appropriate industry code and may qualify for certain tax incentives—but it must clearly prove the scale and method of production.
Quality inspection: mandatory requirement before placing beer and alcohol on the market
Beyond tax obligations, manufacturers must comply with numerous requirements concerning product quality inspection, including testing components, alcohol content, food safety standards, etc.
Required procedures for product announcement and mandatory testing
Under the Food Safety Law and related regulations, before placing products on the market, enterprises must:
Announce product quality standards at competent state agencies.
Conduct periodic product testing at licensed inspection centers.
Apply for certification of food safety eligibility for the production facility.
In addition, if the brewery or distillery imports raw materials or uses special additives, it may need further regulatory review from the Ministry of Industry and Trade or Ministry of Health.
Common risks of failing to comply with inspection regulations
Many businesses have faced trouble for skipping inspections or using test results that fail standards. Consequences may include:
Administrative fines up to hundreds of millions of dong.
Product recall or suspension of plant operations.
Severe damage to brand reputation, especially in the food & beverage industry.
Legal strategies to overcome barriers when opening a brewery or distillery plant
Setting up a brewery or distillery in Vietnam requires not only market insight but also a solid legal strategy to ensure compliance and avoid legal risks.
Legal consulting from the investment licensing stage
To avoid applying for the wrong business line or missing critical documentation, enterprises should work with legal advisors from the start. A complete investment license dossier typically includes:
Detailed investment project, with environmental impact assessment.
Construction permit and suitable site planning.
Documentation proving technical capability and wastewater treatment systems.
Planning tax and quality inspection in parallel with production planning
Rather than leaving tax and inspection until the last minute, enterprises need to:
Integrate SCT planning into pricing strategy.
Establish a schedule for periodic testing and allocate a testing budget.
Identify reputable inspection organizations to save time and costs.
Leveraging regular legal services for long‑term compliance
Once the plant is operational, enterprises should maintain ongoing legal relationships with law firms or consultants to:
Stay updated on legislative changes on tax and inspection.
Respond rapidly to arising issues such as commercial disputes or sudden inspections by authorities.
Advise on restructuring when expanding or licensing production.
Special consumption tax and quality inspection are the two major legal barriers that beer and alcohol producers must overcome when investing in Vietnam. However, with careful preparation and a methodical legal strategy, this can become an opportunity for enterprises to build a sustainable, legal, long-term brand presence in one of the most attractive markets in Southeast Asia.
Are you planning to build a brewery or distillery in Vietnam and need comprehensive legal consulting?
Let DEDICA Law Firm accompany you from investment strategy, SCT compliance to quality inspection. With experience advising many foreign investors and domestic F&B enterprises, we commit to delivering comprehensive, effective, and appropriate legal solutions for your production model.
Contact DEDICA Law Firm for in-depth legal consultation!
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