Special Consumption Tax on Soft Drinks & AC from 2026 in Vietnam

Special Consumption Tax (SCT) on soft drinks and air conditioners (AC) is an important economic tool used by countries to regulate consumption behavior and generate revenue for the state budget. In Vietnam, the amended Law on Special Consumption Tax is being discussed by the National Assembly and is expected to take effect in 2026. This draft law aims to adjust taxed items, including tobacco, alcohol, beer, and sugary beverages. The main purpose is to protect public health and reduce overweight and obesity rates. In the article below, Viet An Law will provide you with information on the Special Consumption Tax on Soft Drinks & AC from 2026 in Vietnam.

Special Consumption Tax on Soft Drinks & AC from 2026 in Vietnam

• Air conditioners with a capacity from over 24,000 BTU to 90,000 BTU, excluding types designed by the manufacturer solely for installation on transport vehicles including automobiles, train cars, ships, boats, and In cases where organizations or individuals produce and sell, or import and separate individual components such as outdoor units or indoor units, the sold or imported goods (outdoor units, indoor units) are still subject to special consumption tax as if they were complete products (complete air conditioners).
• Soft drinks according to Vietnamese Standards with a sugar content of over 5g/100ml.
• The above-mentioned goods are finished products, not including components for assembling these goods.

Meanwhile, according to current regulations in Article 2 of the Law on Special Consumption Tax 2008 (amended by the Law on Special Consumption Tax 2014), only the following types of goods are subject to special consumption tax:

• Cigarettes, cigars, and other tobacco preparations used for smoking, inhaling, chewing, sniffing, or keeping in mouth;
• Liquor;
• Beer;
• Under-24 seat cars, including cars for both passenger and cargo transportation with two or more rows of seats and fixed partitions between passenger holds and cargo holds;
• Two- and three-wheeled motorcycles with a cylinder capacity of over 125 cm3;
• Aircraft and yachts;
• Gasoline of all kinds;
• Air-conditioners of 90,000 BTU or less;
• Playing cards;
• Votive paper and votive objects.

Thus, according to the Draft Law on Special Consumption Tax (amended), soft drinks with sugar content over 5g/100ml will be subject to special consumption tax. In addition, the Law on Special Consumption Tax (amended) will only impose a special consumption tax on air conditioners with a capacity from over 24,000 BTU to 90,000 BTU (excluding types designed by the manufacturer solely for installation on transport vehicles including automobiles, trains cars, ships, boats, aircraft). Air conditioners with a capacity of 24,000 BTU or less will not be subject to tax.

Roadmap for special consumption tax on soft drinks & AC

• Soft drinks will be subject to an 8% tax from January 1, 2027, and increase to 10% from early 2028.
• Products not subject to this tax include milk, dairy products; natural mineral water, bottled water; pure fruit and vegetable juices, and nectars (molasses) of fruits, vegetables, and cocoa products.
• Fruit juice, coconut water, and liquid foods used for nutritional purposes are also not subject to this tax.
• Air conditioners with a capacity of over 24,000 BTU to 90,000 BTU will be subject to a tax rate of 10% from January 1, 2026. Air conditioners with a capacity of 24,000 BTU or less and over 90,000 BTU are not subject to special consumption tax.

Why apply a special consumption tax to soft drinks & AC

Preventing obesity, diabetes, cardiovascular diseases, and other non-communicable diseases

• Imposing a special consumption tax on soft drinks is necessary, consistent with international practices, and aims to institutionalize the Party’s policy on protecting public health. This policy also aligns with recommendations from the World Health Organization (WHO), the United Nations Children’s Fund (UNICEF), and the Ministry of Health.
• The tax imposition will help redirect consumption behavior, reduce the risk of non-communicable diseases caused by excessive sugar consumption, and simultaneously broaden the tax base in a context where the budget needs additional resources for healthcare and social welfare.
• Countries like Mexico, Thailand, and France have adopted this method and found it effective in protecting public health.

Reducing electricity consumption and emissions

• Restricting the consumption of high-capacity air conditioners (24,000–90,000 BTU) which consume a lot of electricity.
• Reducing CO₂ emissions from fossil fuel power sources, is in line with Vietnam’s international commitments to energy transition and greenhouse gas emission reduction.
• Encouraging people to switch to energy-saving and environmentally friendly equipment.

Important notes for businesses after the State imposes special consumption tax on soft drinks & AC

Price calculation and adjustment of pricing strategy

• Businesses need to recalculate retail prices to reflect the special consumption tax component.
• It is important to note: that special consumption tax is calculated on the selling price exclusive of VAT, which can lead to cascading taxes, significantly impacting profits.
• Consider adjusting discounts and promotions, and avoiding underpricing to reduce tax obligations (which may lead to retroactive collection).

Correctly identifying taxable products

• Sugary soft drinks: Only products with ≥ 5g sugar/100ml are subject to tax. Therefore, businesses need to clearly and transparently determine sugar content on labels and technical documents.
• Air conditioners: Only types from 24,000–90,000 BTU are subject to tax. Therefore, businesses need to correctly classify product lines and not misdeclare types or capacities.

Labeling – Quality declaration

• Ensure labels clearly state ingredient information to help determine if a product is subject to tax.
• For soft drinks, businesses can improve formulas to reduce sugar content below the taxable threshold.

Inventory management & import/export

• For inventory before the tax application date (2026), a plan is needed: Clear inventory, and reduce stock to avoid financial impact after the tax takes effect.
• If importing air conditioners/soft drinks, customs-declared values need to be re-evaluated according to the new regulations.

Accounting – Tax – Legal

• Establish an accounting system that correctly reflects the SCT amount.
• Update tax declaration records and periodic reports with tax authorities.
• Be cautious when declaring taxes: violations can lead to retroactive tax collection, administrative penalties, or criminal prosecution in case of fraud.

Above is the advice of Viet An Law on the issue of the Special Consumption Tax on Soft Drinks & AC from 2026 in Vietnam. Clients who have related questions or need legal support, please contact Viet An Law Firm for the best support!