Circular 51/1998/TT-BTC guiding the collection and payment procedures, authority to consider exemption and reduction and finalization of sales tax and profit tax; procedures for resolving tax problems issued by the Ministry of Finance

CIRCULAR

GUIDING THE PROCEDURES FOR COLLECTION AND PAYMENT OF TURNOVER TAX AND PROFIT TAX, THE COMPETENCE TO CONSIDER THE EXEMPTION, REDUCTION AND FINAL SETTLEMENT THEREOF, AND THE PROCEDURES FOR HANDLING TAX-RELATED PROBLEMS

Pursuant to the Law on Turnover Tax, the Law on Profit Tax and the Law on Foreign Investment in Vietnam.In furtherance of Resolution No.38-CP of May 4, 1994 of the Government on the further reform of the administrative procedures in handling affairs of citizens and organizations, and Directive No.342-TTg of May 22, 1997 of the Prime Minister on promotion of reforms of administrative procedures.In order to simplify and quickly clear the administrative procedures in the taxation field, the Ministry of Finance hereby guides the supplements and amendments to a number of points concerning the procedures for the collection, payment, the consideration of exemption, reduction and final settlement of turnover tax and the profit tax; and the procedures for lodging and settling tax complaints, as follows:

1. Tax payment declaration:

Each month, business establishments shall make the turnover tax and profit tax calculation declarations, then send them to the tax agency within the prescribed time limit (except for business households that are subject to presumptive taxation). The tax agency shall receive the declarations, examine data stated therein and send tax notices to the tax payers. The tax agency shall conduct periodical tax inspection at enterprises; before the inspection, the tax agency shall have to issue a decision to set up the inspection team, clearly stating the tasks and the deadline for the inspection, thus avoiding any prolonged inspection that affect the production and business activities of the enterprises.

2. The competence to consider the tax exemption or reduction and the procedures for considering the tax exemption or reduction:

a. The tax agency that directly manages taxes shall be entitled to consider the tax exemption or reduction for business establishments in the following cases:

- Exemption of turnover tax and/or profit tax for production and/or business establishments reserved for disabled laborers defined in Circular No.23-TC/TCT of April 26, 1996 of the Ministry of Finance.

- Exemption or reduction of turnover tax and/or profit tax for vocational training institutions defined in Circular No.32-TC/TCT of July 6, 1996 of the Ministry of Finance.

- Exemption of turnover tax for the elderly, the disabled and small producers and traders.... defined in Point 1, Section I, Part D of Circular No.97-TC/TCT of December 30, 1995 of the Ministry of Finance.

- Reduction of turnover tax for business establishments meeting with difficulties due to natural calamities, enemy sabotages or unexpected accidents defined in Point 2, Section I, Part D of Circular No.97-TC/TCT of December 30, 1995 of the Ministry of Finance.

- Reduction of turnover tax for business establishments operating in mountainous regions and islands, engaged in offshore fishing, conducting scientific research or application of new technologies,... defined in Point 3a, Section I, Part D of Circular No.97-TC/TCT of December 30, 1995 of the Ministry of Finance.

- Reduction of turnover tax for establishments producing import substitutes defined in Point 3b, Section I, Part D of Circular No.97-TC/TCT of December 30, 1995 of the Ministry of Finance.

- Reduction of turnover tax for newly set-up production establishments defined in Point 3c, Section I, Part D of Circular No.97-TC/TCT of December 30, 1995 of the Ministry of Finance.

- Exemption of profit tax for the elderly, the disabled, small traders... defined in Point 1, Section A, Part IV of Circular No.75A-TC/TCT of August 31, 1993 of the Ministry of Finance.

- Exemption of profit tax for transport activities by rudimentary means in mountainous areas... defined in Point 2, Section A, Part IV of Circular No.75A-TC/TCT of August 31, 1993 of the Ministry of Finance.

- Exemption of profit tax for newly set up production establishments defined in Point 3, Section A, Part IV of Circular No.75A-TC/TCT of August 31, 1993 of the Ministry of Finance.

- Exemption of profit tax for business establishments that have moved from delta regions to mountainous areas or islands... defined in Point 4, Section A, Part IV of Circular No.75A-TC/TCT of August 31, 1993 of the Ministry of Finance.

- Reduction of profit tax for newly set up production establishments defined in Point 1, Section B, Part IV of Circular No.75A-TC/TCT of August 31, 1993 of the Ministry of Finance.

For the above-mentioned cases, after inspecting the actual situation of the enterprises, the tax agency that directly manages the taxes shall send tax exemption or reduction notices to the tax payers, and also to the General Department of Taxation for report. Such notices shall serve as basis for making annual final tax settlement.

b. Other cases not mentioned in Point (a) above shall be submitted by the agency directly managing the taxes to the General Department of Taxation for consideration of tax exemption and/or reduction.

For the investment forms to be encouraged under the Law on Domestic Investment Promotion, the tax exemption and/or reduction shall comply with Decree No.07/1998/ND-CP of January 15, 1998.

3. The procedures for final tax settlement:

At the end of a fiscal year, an enterprise shall make by itself the final tax settlement declaration, then send it to the tax agency and take responsibility for the accuracy of the data stated therein. The tax agency shall examine the data stated in the declaration and notify the enterprise of errors (if any) to be corrected. The tax agency shall plan the inspection of some units where exist problems that need to be considered. Before conducting the inspection, the tax agency shall have to issue decisions to set up inspection teams, clearly stating the tasks to be performed and the deadline for completion of the inspection at the enterprises.

4. Reply to tax queries and settlement of tax complaints:

a/ Reply to tax queries:

According to the current tax laws and ordinances, the grassroots units confronted with tax-related queries shall be entitled to report them in writing to the tax agency(ies).

The tax agency at all levels shall have to seriously reply in writing all tax queries of tax payers as well as other agencies within the following time limits:

For queries falling under their handling competence, the tax agencies at all levels shall have to reply within 7 days from the date of receiving the written requests.

For questions which are complicated and beyond their competence, the tax agency at all levels shall have to consult the competent level and reply them within 15 days from the date of receiving the written requests.

b/ Settlement of tax complaints:

The settlement of tax complaints shall comply with the current tax laws and ordinances.

This Circular takes effect 15 days after its signing. The previous stipulations which are contrary to this Circular are now annulled.

Any problems arising in the course of implementation shall be promptly reported by the concerned organizations and/or individuals to the Ministry of Finance for handling.

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