OFFICIAL LETTER

ON PROBLEMS RELATED TO THE USE OF INVOICES

To: The Tax Department of Khanh Hoa province

In reply to Official Letter No. 2263/CT-TTHT dated October 27, 2005, of the Tax Department of Khanh Hoa province on problems related to the use of invoices, the General Department of Taxation hereby gives the following opinions:

1. According to the provisions of Point 5.9, Section IV, Part B of the Finance Ministry’s Circular No. 120/2003/TT-BTC of December 12, 2003, guiding the implementation of the Government’s Decree No. 158/2003/ND-CP of December 10, 2003, detailing the implementation of the Value Added Tax Law and the Law Amending and Supplementing a Number of Articles of the Value Added Tax Law, in case an enterprise has sold goods or provided services and issued an invoice therefor but has to adjust the sale price (up or down) due to the poor quality and/or wrong specifications of such goods or services, the seller and the purchaser shall make a written minutes thereon, clearly stating the quantity, the level of increase or decrease of the price shown in the sale invoice (serial number, code and date of the invoice) and at the same time, the seller shall make a new invoice to adjust the price already written in the said invoice (serial number, code…). The seller and the purchaser shall base themselves on the invoice with the adjusted sale price to declare adjustments to their turnovers and VAT amounts. The adjusting invoice shall be written with the adjusted sale price only and filed together with the adjusted invoice (the old invoice shall not be withdrawn for issuance of a new one).

2. According to the provisions of Point 5.5, Section IV, Part B of aforesaid Circular No. 120/2003/TT-BTC of December 12, 2003, when delivering goods for advertisement and sale promotion free of charge, business establishments shall make invoices, clearly stating that the goods are for advertisement or sale promotion, free of charge, with their unit price, total amount, VAT rate and VAT amount lines left blank and crossed out.

Above is the General Department of Taxation’s notification to the Tax Department for compliance.

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