The maximum limit on the value of goods and services used for promotion

The Decree 128/2024/ND-CP amending a number of provisions related to the maximum limit on the value of goods and services used for promotion in Article 6 of Decree 81/2018/ND-CP. Accordingly, the maximum limit on the value of goods and services used for promotion is stipulated as follows:

- The material value used for promotion for a unit of goods and services being promoted must not exceed 50% of the selling price immediately before the promotion period of that unit of goods and services being promoted, except for the case of promotion in the forms prescribed in Clauses 8 and 9, Article 92 of the 2005 Commercial Law, Article 8, Clause 2, Article 9, Article 12, Article 13, Article 14 of Decree 81/2018/ND-CP.

- The total value of goods and services used for promotion in a promotion program must not exceed 50% of the total value of the goods and services being promoted, except for the case of promotion in the form prescribed in Clauses 8 and 9, Article 92 of the 2005 Commercial Law, Article 8 and Clause 2, Article 9 of Decree 81/2018/ND-CP.

- In cases of organizing a concentrated promotion program, the maximum limit on the value of goods and services used for promotion is 100%. The maximum limit on the value of goods and services used for promotion of 100% is also applied to promotional activities within the framework of trade promotion programs and activities decided by the Prime Minister.

- State agencies (central and provincial levels) issue decisions to organize the implementation of concentrated promotion programs to implement targeted economic development policies of the country and localities. The State has a policy to encourage the organization of centralized promotional programs. All traders are entitled to participate in the programs.

The Decree 128/2024/ND-CP also amends Clause 2, Article 7 on the maximum discount rate for promoted goods and services as follows: In the case of organizing a centralized promotional program as prescribed in Clause 5, Article 6 of Decree 81/2018/ND-CP, the maximum discount rate for promoted goods and services is 100%. The maximum discount rate of 100% is also applied to promotional activities within the framework of trade promotion programs and activities decided by the Prime Minister.

The Decree No. 128/2024/ND-CP amends Clause 1 and Clause 2, Article 21 of Decree No. 81/2018/ND-CP as follows:

a) Amend Clause 1 as follows: In case of implementing a promotional program in the forms prescribed in Articles 12 and 13 of this Decree and other forms prescribed in Clause 9, Article 92 of the Commercial Law, the time limit for announcing the winning results and awarding the program's prizes must not exceed 45 days from the ending date of the promotional period, except in cases of force majeure as prescribed by law.

b) Amend Clause 2 on reporting the results of the promotion program:

- Within 45 days from the date of expiration of the prize awarding period of the promotion program in the form prescribed in Article 13 of this Decree and other forms prescribed in Clause 9, Article 92 of the Law on Commerce, the trader implementing the promotion program must have a written report to the competent state management agency (where it has been registered and confirmed) on the results of the promotion program implementation according to Form No. 07 of the Appendix issued with this Decree. In case it is necessary to deduct 50% of the value of the prize without a winner to the state budget, within 07 working days from the date of receipt of the trader's report, the state management agency shall issue a decision to collect 50% of the announced value of the prize without a winner of the promotion program according to Form No. 08 of the Appendix issued with this Decree. Within 45 days from the date of receipt of the decision on collection and payment from the state management agency, the trader is responsible for paying 50% of the announced value of the prize without a winner of the promotion program according to the decision. Documents and papers related to the report on results and related to the implementation of the promotion program must be stored by the trader and the trader is responsible in accordance with the provisions of law to serve the inspection, examination and supervision work;

- Traders conducting promotions in the forms prescribed in Clause 8, Article 92 of the Law on Commerce, Articles 8, 9, 10, 11, 12 and 14 of this Decree are not required to report the results of the promotion implementation.

The Decree No. 128/2024/ND-CP also supplements, replaces and abolishes a number of provisions of Decree No. 81/2018/ND-CP dated May 22, 2018 of the Government detailing the Law on Commerce on trade promotion activities. The Decree takes effect from December 1, 2024.