On October 10th, 2024, the Government issued Decree No. 128/2024/ND-CP (“Decree 128/2024/ND-CP”) for amending, supplementing several provisions of Decree No. 81/2018/ND-CP dated May 22nd, 2018 that provided detailed guidelines on the Commercial Law regarding commercial promotional activities (“Decree 81/2018/ND-CP”). Decree 128/2024/ND-CP, effective from December 1st, 2024, abolishes the notification requirements of some promotional programs stipulated in Decree 81/2018/ND-CP. Accordingly, traders are no longer required to notify the local Department of Industry and Trade where the promotional program is carried out for the following promotional forms:

(i) Giving samples of goods, and provision of services to customers for trial use free of charge;

(ii) Giving goods as gifts, providing free services to customers;

(iii) Selling goods or providing services at prices lower than the prices previously charged for the sale of the goods or provision of the services (discounts);

(iv) Selling goods, providing services together with coupons for the purchase of goods or use of services; and

(v) Organizing for customers to participate in cultural, artistic, and entertainment programs or other events for promotional purposes (under Article 92.8 of the Commercial Law No. 36/2005/QH11).

Furthermore, traders conducting promotional activities in the form of (i) selling goods, providing services associated with contest forms for customers, from amongst which the winners will be selected following announced rules; and (ii) holding programs for regular customers under which prizes will be given to customers based on volume or value of goods or services purchased by customers and expressed in the form of customer cards or coupons recording the goods or services purchased or other forms, are not required to notify the Department of Industry and Trade if the promotional programs are only conducted for goods and services sold or provided via e-commerce platforms, websites, and online promotional application.

The above regulation creates more favorable conditions for enterprises concerning invoices and Value-Added Tax (VAT) compliance relating to promotional activities. Under the VAT Law and guiding regulations if enterprises conduct promotional programs that do not comply with the provisions of the Commercial Law (e.g., failing to notify or register with the Department of Industry and Trade), they must issue VAT invoices and pay VAT as if the goods and services were for internal consumption, gifts, presents or donations. The removal of the notification requirement for the above promotional forms can be interpreted as enterprises declaring zero VAT taxable prices for goods and services used for these promotional activities.

Disclaimer: This publication is for general update. This should not be construed as professional advice for any specific case, entity, or individual. If you require further information or professional assistance concerning your specific circumstances, please feel free to contact us.

Dentons LuatViet acknowledges and thanks Trainee Associate Giang Nguyen for her contribution to the article.