On 22 May 2018, the Government of Vietnam passed Decree No. 81/2018/ND-CP detailing the Law on Commerce regarding sale promotion activities ("Decree No. 81"), replacing Decree No. 37/2006/ND-CP dated 4 April 2006 ("Decree No. 37"). Decree No. 81 will take effect from 15 July 2018.
Decree No. 81 relaxes some of the restrictions on sales promotion activities under Decree No. 37. We set out some key amendments under Decree No. 81 below.
1. Value cap on promotion goods
The 50% discount cap on the unit price and 50% discount cap on the total promotion value will still apply to several of the most common sale promotions. The 50% discount cap has been eased by up to 100% in specific circumstances, particularly during the sale promotions organized by the central or provincial authorities, and during public holidays, such as the Lunar New Year holiday and all National Holidays. Decree No. 81 allows sale promotions to be discounted up to 100% of the sale value during the 9 Vietnamese public holiday days as well as the 30 days leading up to the Tet New Year holiday.
There may be other sales events centrally organized by the Government where the 100% discount is allowed, but it remains to be seen how the Ministry of Industry and Trade and the local Departments of Industry and Trade will schedule and organize such events.
Additionally, no value restriction is applicable to sales promotions of:
- Goods and services when implementing the price stabilization policy of the State;
- Fresh/raw products;
- Goods and services sold in case of bankruptcy, dissolution or change of production or business location.
2. Time period cap on the price discount
Under Decree No. 81, the price discounts are subject to strict restrictions in terms of discount value and time period. Decree No. 81 increases the total price discount time period from 90 days per year to 120 days per year, excluding the period of sales events or promotion events centrally organized by the Government.
3. Administrative procedures for notification and registration of promotions
Currently sale promotion campaigns must be registered / notified with the Department of Industry and Trade where the sale promotion will be conducted. Although the regulation only requires advance notification, in practice the procedure is a request for approval. Practically speaking, enterprises can only conduct their proposed sale promotion when they have received approval by email or in writing from the relevant authorities. This poses a significant challenge and cost to enterprises, especially for nationwide promotions where they will be required to follow up with authorities in 63 provinces and 5 central cities.
The advance notice period is now shortened from 7 working days to 3 working days and the authorities' period of review is also shortened from 7 working days to 5 working days for notification dossiers.
Decree No. 81 recognizes an exception from the notification requirement in the following circumstances:
- total value of promotional goods is less than VND 100 million, or
- where businesses only sell goods and conduct sales promotions through e-commerce platforms and online promotional websites.
4. End of promotions prior to the registered period
The promotions are now allowed to end prior to the expiry of the registered period in the cases of:
- force majeure; or
- where promotional goods or services are no longer available, or goods and services for sale promotion have been fully sold; or
- the evidence of the winner has been announced and acknowledged by the competent authorities, in case of providing services together with participation in lucky draw programs.
The promotions are only allowed to end after the businesses complete the procedure for notification on the end of promotions.
The businesses are also allowed to amend the promotion programs, provided that the benefits of customers who have participated in the program will not be affected due to such amendments.