To:  The First Zone Maritime Pilotage Single-member Limited Liability Company
Address: No. 45 ABCD Dinh Tien Hoang - Ben Nghe Ward - District 1
TIN: 0300443683

In response to your Company’s official dispatch dated December 18, 2020 on tax policies (received by Ho Chi Minh City Department of Taxation on December 23, 2020), Ho Chi Minh City Department of Taxation hereby gives some guidelines as follows:

Pursuant to the Circular No. 45/2013/TT-BTC dated April 25, 2013 of the Ministry of Finance providing guidelines for management, use and depreciation of fixed assets;

Pursuant to Article 8 of the Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance providing guidelines for Value-added Tax (VAT), time for VAT calculation is determined as follows:  

“Article 8. Time for VAT calculation

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5.  With regard to construction and installation activities, including shipbuilding, VAT shall be calculated at the time of commissioning and acceptance of the finished works, or their items, or construction/installation amounts, whether or not the payment is made.

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“2. Filling some specific items on an invoice

a) Item “Ngày tháng năm” (Date of invoice):

Date of a service invoice is the date of completion of service provision, whether or not the payment is made.  Where the payment is made in advance or during the service provision, the date of invoice is the date of payment.

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With regard to construction and installation activities, the date of invoice is the date of commissioning and acceptance of the finished works, or their items, or construction/installation amounts, whether or not the payment is made.

Where multiple deliveries are required, or each work item or service phase is accepted, it is required to issue an invoice showing quantity, value of goods or service for each respective delivery or acceptance.

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Pursuant to the Circular No. 96/2015/TT-BTC dated June 22, 2015 of the Ministry of Finance providing guidelines for corporate income tax (CIT):

+ Article 3 provides amendments to Clause 2 Article 5 of the Circular No. 78/2014/TT-BTC as follows:

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a) For goods sale: the time when the right to ownership and/or right to enjoyment of goods is transferred to the buyer.

b) For service provision: the time when the service provision is completed or part of service provision is completed, except for the cases specified in Clause 3 Article 5 of the Circular No. 78/2014/TT-BTC, and Clause 1 Article 6 of the Circular No. 119/2014/TT-BTC.

c) For air transport: the time when the provision of transport services is completed.

d) Other cases defined by law”.

+ Article 4 provides amendments to Article 6 of the Circular No. 78/2014/TT-BTC (as amended in Clause 2 Article 6 of the Circular No. 119/2014/TT-BTC and Article 1 of the Circular No. 151/2014/TT-BTC) as follows:

“Article 6. Deductible and non-deductible expenses when calculating taxable income:

1. Except the non-deductible expenses prescribed in Clause 2 of this Article, every expense is deductible if all of these following conditions are satisfied:

a) The actual expense incurred is related to the enterprise’s business operation;

b) There are sufficient and valid invoices and proof for the expense under the regulations of the law;

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The proof of non-cash payment must comply with regulations of the Law on VAT.

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Pursuant to the abovementioned regulations:

1. In principle, with regard to construction works, the time for issuing VAT invoice and calculating VAT and CIT is the date of commissioning and acceptance of the finished works, or their items, or construction/installation amounts, whether or not the payment is made. According to your Company’s statements, your Company is the investor and has concluded a construction contract (contract package: Construction works of Long An pilotage station project, hereinafter referred to as “construction works”) with Song Hong No. 1 Construction Joint Stock Company (contractor) but then two parties have decided to stop construction works and liquidate the signed contract. In this case, the contractor is required to issue an invoice to your Company for the volume of actually finished works.  Where the contractor has not yet issued the invoice for the finished volume of the construction works, the payment made to the contractor shall not be included in the lawful investment value specified in the financial statement of the construction works.

2. Song Hong No. 1 Construction Joint Stock Company (TIN: 0100106345) is headquartered at No, 72, An Duong Street, Yen Phu Ward, Tay Ho District, Ha Noi City, and is subject to the supervision of Ha Noi City Department of Taxation. Thus, Ha Noi City Department of Taxation shall have the power to consider and take actions against administrative violations regarding taxation and invoices (if any) committed by Song Hong No. 1 Construction Joint Stock Company.

PP. DIRECTOR
DEPUTY DIRECTOR




Nguyen Nam Binh