The Vietnam Government has issued Decree No. 128/2024/ND-CP on October 10, 2024 (“Decree 128”), amending and supplementing certain provisions of Decree No. 81/2018/ND-CP (“Decree 81”) on trade promotion activities under the Law on Commerce.
Below are key regulatory updates businesses should note when organizing or participating in trade promotion activities.
1. Maximum Limit on the Value of Goods and Services Used for Promotion
The material value used for promotion must not exceed 50% of the selling price of the promoted goods or services immediately before the promotion period, except in the following cases:
(i) Organizing cultural, artistic, entertainment, or other promotional events;
(ii) Providing free sample goods or services;
(iii) Giving away goods or services without requiring a purchase;
(iv) Selling goods or services with prize tickets;
(v) Conducting lucky draw programs;
(vi) Implementing loyalty programs;
(vii) Other approved promotional forms as determined by the state management agency of trade.
The total value of goods and services used for promotion in a promotional program must not exceed 50% of the total value of the goods and services being promoted. Compared to Decree 81, Decree 128 introduces an exception: if the promotional form is approved by the state management agency of trade, the 50% limit will not apply.
For concentrated promotional programs, the maximum promotional value is 100%. This 100% limit also applies to promotional activities conducted within the framework of trade promotion programs and activities approved by the Prime Minister.
2. Concentrated Promotional Programs
Decree 128 removes the time restrictions on conducting concentrated promotional programs, which were previously limited to specific promotional periods (e.g., hours, days, weeks, months, or seasons).
3. Notification of Promotional Activities
Businesses do not need to notify authorities for the following promotions:
a) Promotional forms exempt from notification:
- Cultural, artistic, entertainment, and event-based promotions;
- Free sample goods or services;
- Free giveaways without purchase conditions;
- Discounts applied during the announced promotional period;
- Promotions involving vouchers or service coupons.
b) Promotions exempt from notification if total prizes or gifts are under VND 100 million:
- Lucky draws with prize tickets;
- Loyalty programs rewarding customers based on purchases (e.g., customer cards, vouchers, or equivalent forms).
c) Promotional programs in the forms specified in Section 3.b) may only be implemented for goods and services sold and provided through e-commerce platforms, online promotional websites, and online promotional applications.
Additionally, Decree 128 removes email-based notifications to the Department of Industry and Trade. Businesses must notify via postal service, direct submission, the National Public Service Portal, or the Provincial Administrative Procedure Information System.
4. Registration of Promotional Activities
Businesses no longer need to submit quality certification documents for promotional goods when registering a promotional program with the Department of Trade Promotion.
5. Announcement of Results, Prize Distribution, and Reporting
- Businesses must announce winning results and distribute prizes within 45 days after the promotion ends, except in force majeure events.
- A written report on the results of the promotion must be submitted to the competent authority within 45 days after the prize distribution ends.
- If no winner is declared, 50% of the unclaimed prize value must be paid to the state budget. The competent authority issues a collection decision within 7 working days of receiving the business’s report.
- The business must pay the required amount within 45 days of receiving the collection decision (previously 15 working days). Decree 128 removes the requirement to submit a written report within 10 days after payment to the state budget.
- Businesses must retain all vouchers and related documents to facilitate regulatory inspections.
Decree 128 takes effect from December 1, 2024.
______________________
Should you have any inquiries, please do not hesitate to contact us.
𝟏𝟗𝟖𝟗 𝐋𝐀𝐖
Website: 1989law.vn
Hotline: (+84) 945.45.45.11
Address: No. 207C Nguyen Xi, Ward 26, Binh Thanh District, Ho Chi Minh City, Vietnam