GUIDANCE ON IMPLEMENTATION OF THE LAW ON VALUE-ADDED TAX AND THE GOVERNMENT'S DECREE NO. 209/2013/ND-CP DATED DECEMBER 18, 2013 PROVIDING GUIDANCE ON SOME ARTICLES OF THE LAW ON VALUE-ADDED TAX

The Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance providing guidance on implementation of the Law on Value-added Tax and the Government's Decree No. 209/2013/ND-CP dated December 18, 2013 providing guidance on some Articles of the Law on Value-Added Tax, which comes into force from January 01, 2014, is amended by:

1. The Circular No. 119/2014/TT-BTC dated August 25, 2014 of the Ministry of Finance on amendments to Circular No. 156/2013/TT-BTC dated November 06, 2013, Circular No. 111/2013/TT-BTC dated August 15, 2013, Circular No. 219/2013/TT-BTC dated December 31, 2013, Circular No. 08/2013/TT-BTC dated January 10, 2013, Circular No. 85/2011/TT-BTC dated June 17, 2011, Circular No. 39/2014/TT-BTC dated March 31, 2014 and Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance to simplify tax formalities, which has been effective since September 01, 2014.

2. The Circular No. 151/2014/TT-BTC dated October 10, 2014 providing guidelines for implementation of the Government's Decree No. 91/2014/ND-CP dated October 01, 2014 on amendments to tax decrees, which has been effective since November 15, 2014.

3. The Circular No. 26/2015/TT-BTC dated February 27, 2015 of the Ministry of Finance providing guidelines for value-added tax and tax administration in the Government's Decree No. 12/2015/ND-CP dated February 12, 2015 on guidelines for the Law on Amendments to Laws and Decrees on taxation, and amendments to Circular No. 39/2014/TT-BTC dated March 31, 2014 of the Ministry of Finance on invoices for goods sale and service provision, which has been effective since January 01, 2015.

4. The Circular No. 193/2015/TT-BTC dated November 24, 2015 of the Ministry of Finance amending and supplementing the Circular No. 219/2013/TT-BTC of the Ministry of Finance dated December 31, 2013 providing guidance on implementation of the Law on Value-added Tax and the Government's Decree No. 209/2013/ND-CP dated December 18, 2013 providing guidance on some Articles of the Law on Value-Added Tax, which has been effective since January 10, 2016.

5. The Circular No. 130/2016/TT-BTC dated August 12, 2016 of the Ministry of Finance on guidelines for the implementation of the Government’s Decree No. 100/2016/ND-CP dated July 01, 2016 on the implementation of the Law on Amendments to Certain Articles of the Law on Value Added Tax, the Law on Special Excise Tax and the Law on Tax Administration and to Certain Articles of Tax-related Circulars, which has been effective since July 01, 2016.

6. The Circular No. 173/2016/TT-BTC dated October 28, 2016 of the Ministry of Finance amending and supplementing the first paragraph of Clause 3 Article 15 of Circular No. 219/2013/TT-BTC dated December 31, 2013 by the Ministry of Finance (which was amended by Circular no. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 and Circular No. 26/2015/TT-BTC dated February 27, 2015 by the Ministry of Finance), which has been effective since December 15, 2016.

7. The Circular No. 93/2017/TT-BTC dated September 19, 2017 of the Ministry of Finance on amendments to Clause 3 and Clause 4 Article 12 of Circular No. 219/2013/TT-BTC dated December 31, 2013 (amended by the Circular No. 119/2014/TT-BTC dated August 25, 2014); abrogation of Clause 7 Article 11 of Circular No. 156/2013/TT-BTC dated November 06, 2013, which has been effective since November 05, 2017.

8. The Circular No. 25/2018/TT-BTC dated March 16, 2018 of the Ministry of Finance on guidelines for the Government’s Decree No. 146/2017/ND-CP dated December 12, 2017 on amendments to some articles of the Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance and Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance, which has been effective since May 01, 2018.

9. The Circular No. 82/2018/TT-BTC dated August 30, 2018 of the Ministry of Finance on repeal of Example 37 in Point a.4 Clause 10 Article 7 of the Circular No. 219/2013/TT-BTC of the Ministry of Finance dated December 31, 2013 providing guidance on implementation of the Law on Value-added Tax and the Government's Decree No. 209/2013/ND-CP dated December 18, 2013 providing guidance on some Articles of the Law on Value-Added Tax, which has been effective since October 15, 2018.

Pursuant to the Law on Value-added Tax No. 13/2008/QH12 dated June 03, 2008 and Law on amendments to the Law on Value-added Tax No. 31/2013/QH13 dated June 19, 2013;

Pursuant to the Law on Tax Administration No. 78/2006/QH11 dated November 29, 2006 and Law on amendments to the Law on Tax Administration No. 21/2012/QH13 dated November 20, 2012;

Pursuant to the Government’s Decree No. 209/2013/ND-CP dated December 18, 2013 providing guidance on some Articles of the Law on Value-Added Tax;

Pursuant to the Government's Decree No. 118/2008/ND-CP dated November 27, 2008 defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

At the request of the Director of the General Department of Taxation,

Chapter I

GENERAL

Article 1. Scope

This Circular provides guidance on the goods and services that are subject to tax and not subject to tax, taxpayers, basis and methods for calculating, deducting, refunding tax, and the places to pay value-added tax (VAT).

Article 2.Taxable goods and services

Goods and services subject to VAT (hereinafter referred to as “taxable goods and services”) are those used for production, trading, and consumption in Vietnam (including those purchased from overseas organizations and individuals), except for the goods and services in Article 4 of this Circular.

Article 3. Taxpayers

Payers of VAT are the organizations and individuals that manufacture, trade in taxable goods and services in Vietnam regardless of their lines and forms of business (hereinafter referred to as “business establishments”), the organizations and individuals that import goods or purchase services from abroad (hereinafter referred to as “importers”), including:

1. The business organizations established and registered under the Law on Enterprises, the Law on State Enterprises (now the Law on Enterprises), the Law on Cooperatives, and other business laws;

2. Business entities of political organizations, socio-political organizations, social organizations, socio-professional organizations, People’s armed forces, public service providers, and other organizations;

3. Foreign-invested companies and the foreign participants under the Law on Foreign investment in Vietnam (now the Law on Investment); the foreign organizations and individuals (hereinafter referred to as “foreign entities”) that do business in Vietnam without establishing a legal entity in Vietnam;

4. Individuals, households, independent groups of businesspeople, and other entities that engage in manufacturing, trading, or importation;

5. Any business organization or businessperson in Vietnam that purchases services (including services attached to goods) from a foreign organization that does not have a permanent establishment in Vietnam, or from a foreigner that is not a resident in Vietnam, the business organization or businessperson that purchase services is the taxpayer, except for the cases in which VAT is exempt in Clause 2 Article 5 of this Circular.

Regulations on permanent establishments and residents are introduced in the laws on corporate income tax and personal income tax.

6. Branches of the export processing companies that are established to trade goods and do the tasks related to goods trading in Vietnam in accordance with the laws on industrial parks, export-processing zones, and economic zones.

Example 1: Sanko LLC. is an export processing enterprise. Apart from manufacturing for exportation, Sanko LLC. is also licensed to import goods for sale or for exportation, and Sanko LLC. must establish a branch to do this task. This branch shall independently keep accounting records, declare and pay separate VAT on such task instead of including it in the VAT on manufacturing for exportation.

When importing goods for distribution (sale), the branch of Sanko LLC shall declare and pay VAT on the importation and on each sale (including exportation). Sanko LLC. shall use invoices, declare and pay VAT as prescribed.

Article 4. Goods and services that are not subject to VAT

Preprocessed products are those that have only been cleaned, dried, husked, grinded, milled, threshed, split, cut, salted, put in cold storage (cooled or frozen), preserved with sulfur dioxide, sulfur solution, or other solutions, and other common means of preservation.

Example 2: Company A signs a contract to raise pigs with company B, under which company B provides studs, feeds, veterinary medicines for company A and company A provides, sells pig products to company B. The payment for pig breeding paid by company B and the pig products sold by company A to company B are not subject to VAT.

With regard to pig products received by company B from company A: Whole pigs or fresh meat sold by company B are not subject to VAT; If company B further processes pigs into products such as sausage, bacon, grilled chopped meat, or other finished products, they shall be subject to VAT as prescribed.

2. Breeds of livestock, plant varieties, including eggs, breeds, seeds, stems, tubers, semen, embryos, genetic materials that are raised, imported, and traded. The breeds of livestock and plant varieties that are not subject to VAT are the products of the importers and traders that have the certificates of registration of animal breed or plant variety trading issued by regulatory bodies. The animal breeds and plant varieties that apply quality standards of the state must satisfy the requirements imposed by the state.

3. Irrigation services, plowing services, dredging channels, dredging in-field trenches serving agricultural production; harvesting services.

Feeds for livestock, poultry, fish, and other animals (hereinafter referred to as “animal feeds”), including processed or unprocessed products such as mash, dregs, oil cakes, fish meal, bone meal, shrimp meal, and other types of animal feeds, animal feed additives (such as premix, active ingredients, and carriers) prescribed in Clause 1 Article 3 of the Government's Decree No. 08/2010/ND-CP dated February 05, 2010 on management of animal feeds, Clause 2 and Clause 3 Article 1 of Circular No. 50/2014/TT-BNNPTNT dated December 24, 2014 of the Ministry of Agriculture and Rural Development;

Offshore fishing ships are ships ≥ 90CV and engaged in fishing or logistics services serving fishing; machinery and specialized equipment serving extraction and preservation of products on fishing ships ≥ 90CV engaged in fishing or logistics services serving fishing;

Machinery and specialized equipment serving agricultural production, including: tractor; harrowing machine; milling machine; sowing machine; rootdozer; field leveling device; seeding machine; transplanter; sugarcane planting machine; rice-sowing machine; tiller, cultipacker, fertilizer spreader, pesticide sprayers; machine for harvesting rice, corn, sugarcane, coffee, cotton; machine for harvesting tubers, fruits, roots; tea-cutting machine, tea-picking machines; threshing machine; corn peeling machine; soybean crusher; peanut huller; coffee huller, equipment for preparing coffee, wet rice; dryer for agricultural products (rice, corn, coffee, pepper, cashew nut, etc.), and aquaculture products; machine for collecting, loading sugarcane, straw on the field; machine for egg incubating and hatching; forage harvester; straw, grass baler; milking machine, and other specialized machines.

4. Salt derived from seawater, rock salt, pure salt, refined salt, iodized salt composed primarily of sodium chloride (NaCl).

5. State-owned houses sold to tenants.

6. Transfer of land use rights.

7. Life insurance, health insurance, learner’s insurance, other insurance services related to humans; insurance for livestock, plants and other agriculture insurance services; insurance for ships and instruments for fishing; reinsurance.

8. The finance, banking, and securities services below:

a)5 Credit extension includes:

- Loan;

- Discounted transfer of negotiable instruments and other financial instruments;

- Bank guarantee;

- Finance lease;

- Issuance of credit cards.

Where a credit institution collects fees for issuance of credit cards, the fees collected from the clients that are part of the credit extension process (card issuance fee) according to the regulations on granting loan of the credit institution such as fee for early repayment, penalties for late repayment, fee for debt restructuring, fee for loan management, and other fees that are part of the credit extension process are not subject to VAT.

The fees related to common card transactions that are not part of the credit extension process such as fee for reissuance of PINs, fee for provision of invoice copies, claiming fee, fee for card replacement, fee for card destruction, fee for card conversion, and other fees are subject to VAT.

- Domestic and international factoring for the banks allow to process international payments;

- Revenue from liquidation of collateral by a credit institution or law enforcement authority or by the borrowers themselves with authority of the loaner to repay secured loans. To be specific:

+ Collateral that may be sold is assets of a secured transaction registered with a competent authority in accordance with regulations of law on registration of secured transactions.

+ Collateral shall be settled in accordance with regulations of law on secured transactions.

If the owner of the collateral defaults on the debt and has to transfer the collateral to a credit institution for settlement, both parties must follow the prescribed procedure for transferring collateral and are not required to issue VAT invoices.

Where the credit institution takes the collateral to clear debt, credit institution shall record an increase in the value of business assets. When the credit institution sells the assets, VAT must be declared and paid if it is subject to VAT.

Example 3: In March 2015, company A, which pays VAT using credit-invoice method, pledges its machinery and equipment as collateral to take a loan at bank B, which is due in one year (the deadline is March 31, 2016). On March 31, 2016, company A defaults on the loan and has to transfer the collateral to bank B. Company A is not required to issue invoices when transferring the collateral to bank B. When Bank B sells the collateral to recover the debt, the sold collateral is not subject to VAT.

Example 3a: In December 2014, company B, which pays VAT using credit-invoice method, pledges its workshop on land and land use right as collateral to take a loan at commercial bank C, which is due in one year (the deadline is December 15, 2016). Bank C and company B have registered the secured transaction (pledged workshop and land use right) with a competent authority. On December 15, 2016, company B defaults on the debt and bank C agrees in writing to release the collateral so that company B can sell the workshop to repay the debt. When company B sells the workshop in January 2017 to repay the debt, the sold workshop is not subject to VAT.

- Information provision services provided by the units and organizations affiliated to the State bank for credit institutions to use for credit extension in accordance with the Law on the State Bank.

Example 4: X is a unit of the State bank and is allowed by the State bank to provide credit information. In 2014, X signs contracts to provide information for some commercial banks to serve their credit extension and other activities. The revenue from provision of credit information serving credit extension is not subject to VAT; the revenue from provision of credit information serving other activities of the commercial banks beyond the Law on the State Bank is subject to 10% VAT;

- Other forms of credit extension prescribed by law.

b) Separate loans that are not a business and irregularly given by taxpayers that are not credit institutions.

Example 5: Joint-stock company C has idle money and signs a 6-month loan contract with company T and receives an interest. Such interest is not subject to VAT.

c) Securities services include: brokerage, proprietary trading, securities underwriting, securities investment consulting, depository, securities investment fund management, securities company management, securities portfolio management, market organization services of Stock Exchanges or Securities trading centers, services related to the securities registered and deposited at Vietnam Securities Depository, granting loans for margin trading, advance payment for securities and other types of securities trading prescribed by securities laws.

Information provision, auctions of shares of issuers, technical support for online transactions of Stock Exchanges.

d) Capital transfer includes the transfer of part of or the whole capital invested in another business organization (regardless of the creation of a new legal entity), securities transfer, transfer of the right to contribute capital, and other forms of capital transfer prescribed by law, including business acquisition in which the acquirer inherits all rights and obligations of the acquired company.

Example 6: In April 2014, company A contributes capital in the form of machinery and equipment to the creation of joint-stock company B. The company A’s contribution is valued at VND 2.5 billion, which is equal to 25% of company B’s total capital. In November 2014, company A sells this capital contribution to ABB Foundation for 4 billion VND. This amount of VND 4 billion is revenue from capital transfer and not subject to VAT.

dd) Selling debts;

e) Foreign currency trading;

g) Derivative financial services include: interest rate swaps; forward contracts; futures contracts; foreign-exchange options; other derivative financial services prescribed by law;

h) Selling collateral put up by the wholly state-owned organizations established by the Government to settle bad debts of Vietnamese credit institutions.

Caring for the elderly and disabled includes health care, nutrition care, cultural activities, sports, entertainment, physical therapy and rehabilitation for the elderly and disabled.

The revenue from medicines included in a service package (as per regulations of the Ministry of Health) is not subjected to VAT.

10. Public postal and telecommunications services, and public Internet services provided by the government, postal and telecommunications services from abroad (inbound).

11. Maintenance of zoos, flower gardens, parks, street greeneries, public lighting, funeral services. The services mentioned in this Clause do not depend on the source of payment. To be specific:

a) Maintenance of zoos, flower gardens, parks, street greeneries, and state-owned forests include management, tree planting and cultivation, protection of animals in the parks, zoos, public areas, national forests and national parks;

b) Public lighting includes lighting on the streets, in alleys, neighborhoods, flower gardens, and parks. Revenue from public lighting is not taxable;

c) Funeral services provided by the business establishments licensed to provide funeral services include funeral parlor and car rental service, burial service, cremation service, grave move service, and grave care service.

12. Maintenance, repair, and construction funded by the people (including contributions and sponsorships), humanitarian aid for cultural and artistic works, public works, infrastructure, and housing for beneficiaries of incentive policies.

When a source of funding other than people’s contribution or humanitarian aid is used that does not exceed 50% of the total investment in the work, the value of the whole work is not subject to tax.

When a source of funding other than people’s contribution or humanitarian aid is used that exceeds 50% of the total investment in the work, the value of the whole work is subject to VAT.

Beneficiaries of incentive policies include the contributors, beneficiaries of social protection that receive benefits from government budget; members of poor households and near-poor households, and other cases prescribed by law.

13. Education and vocational training as prescribed by law, including foreign language training, artistic training, sports training, nursing, children’s nursing, and training of other professions in order to raise extend education, improve professional knowledge and skills.

The revenues from meal, student transport collected by educational institutions from preschool to high school are not subject to tax.

Revenues from boarding school services; revenues from training (including the case where the examinations and issuance of qualifications are part of the training course) are not subject to VAT. If the training institution only organizes the examinations and issues qualifications that are part of the training course without running the course, the examinations and issuance of qualifications are also not subject to tax. The examinations and issuance of qualifications beyond the training course are subject to VAT.

Example 7: Training center X is appointed by a competent authority to provide training and issue qualifications in insurance agent. Center X appoints Y to provide the training while center X only holds the examinations and issues the qualification in insurance agent. The examinations and issuance of qualifications are not subject to VAT.

14. Audio and video broadcasting funded by government budget.

15. Publishing, importing newspapers, magazines, specialist newsletters, political books, textbooks, teaching materials, law books, scientific books, books using languages of ethnic minorities, propagation pictures, including those in the form of audio and video discs/tapes, electronic data; money and money printing.

Newspapers, magazines and specialized newsletters, including transmission of pages of newspapers, magazines and specialized newsletters.

Political books being the books that propagate the political orientation of the Communist Party and the state to serve political objectives and anniversaries; the books that encourage good deeds; the books that contain speeches and theoretical researches of leaders of the Communist Party and the State.

Textbooks being the books used for teaching and learning from preschool to high school (including books for reference that are conformable with school programs)

Teaching materials being the books used for teaching and learning in universities, colleges, junior colleges, and vocational schools.

Law books are the books that contain legislative documents.

Scientific books being the books used for introducing scientific and technological knowledge related to manufacturing and branches of science.

The books using languages of ethnic minorities, including bilingual books using commonly used languages and languages of ethnic minorities..

Propagation pictures, photos, posters, leaftlets and brochures being those serving propagation, slogans and pictures of leaders, the Communist Party flag, the National flag, the flag of the Youth League and the flag of the Young Pioneers League.

17. Goods that cannot be manufactured in Vietnam and must be imported, including:

a) Imported machinery, equipment, parts, and supplies serving scientific research and technological development;

b) Imported machinery, equipment, parts, specialized vehicles and supplies serving petroleum exploration and extraction and oil field development;

c) Aircrafts (including engines), oil rigs and ships that cannot be manufactured in Vietnam and are imported as fixed assets of enterprises or leased from a foreign party to serve manufacturing, trading, or to sublease.

The importer must present the customs authority with the documents about customs procedure, customs supervision and inspection, export and import duties, and administration of tax on exported and imported goods prescribed by the Ministry of Finance to determine whether the goods referred to in this Clause are subject to VAT at the stage of importation.

The Ministry of Planning and Investment shall compile a list of machinery, equipment, parts, supplies serving scientific research and technology development that can be manufactured in Vietnam, a list of machinery, equipment, parts, and specialized vehicles serving petroleum exploration and extraction and oil field development that can be manufactured in Vietnam, and a list of aircraft, oil rigs, and ships that can be manufactured in Vietnam as the basis for identifying those that cannot be manufactured in Vietnam and need importing.

18. Weapons and specialized vehicles serving national defense and security.

a) The weapons and specialized vehicles serving national defense and security enumerated in the list compiled by the Ministry of Finance in cooperation with the Ministry of National Defense and the Ministry of Public Security.

The weapons and specialized vehicles serving national defense and security that are not subject to VAT must be finished products, or parts, packages used for assembling finished products. If the weapons and specialized vehicles must be repaired, the repair services provided by the companies affiliated to the Ministry of National Defense and the Ministry of Public Security are not subject to VAT.

b) Imported weapons, and specialized vehicles (including supplies, machinery, equipment, parts) serving national defense and security that are exempt from import tax according to the Law on Export and Import Duties, or imported within annual quota imposed by the Prime Minister.

The procedure and documentation for imported weapons and vehicles are not subject to VAT during importation according to regulations of the Ministry of Finance on customs procedure, customs supervision and inspection, export and import duties, and administration of tax on exported and imported goods.

19. Imported goods, goods/services sold to other organizations and individuals as humanitarian aid or non-refundable aid in the following cases:

a) Goods imported as humanitarian aid or non-refundable aid must be certified by the Ministry of Finance or a Department of Finance;

b) Gifts for regulatory bodies, political organizations, socio-political organizations, socio-political-professional organizations, social organizations, socio-professional organizations, and the people’s armed forces prescribed by the law on gifts;

c) Gifts for individuals in Vietnam prescribed by the law on gifts;

d) Belongings of foreign entities provided with diplomatic immunity prescribed by the law on diplomatic immunity; belongings brought to Vietnam by Vietnamese people residing overseas;

dd) Belongings in luggage within tax-free allowance;

The limit on tax-free imported goods is specified in the Law on Export and Import Duties and its guiding documents.

Imported goods of the entities provided with diplomatic immunity are not subject to VAT. Any entity granted diplomatic immunity that purchases goods/services in Vietnam at VAT-inclusive prices may claim a refund according to Clause 7 Article 18 of this Circular.

Instructions on VAT refund for diplomatic missions, consular missions, and representative offices of international organizations in Vietnam are provided by the Ministry of Finance.

e) Goods and the goods/services sold to other organizations and individuals as humanitarian aid or non-refundable aid for Vietnam.

In order to be exempt from VAT, the international organization and or foreigner that buys goods/services in Vietnam as humanitarian aid and non-refundable aid must send a note to the seller, which specifies their name, the quantity or value of purchased goods, and bears certification of the aid by the Ministry of Finance and a Department of Finance.

When selling goods, the seller must issue an invoice specifying that the goods are sold at VAT-exclusive prices to a foreign entity as non-refundable aid or humanitarian aid, keep the aforesaid note as an evidence when declaring tax. Any foreign entity or international organization that purchases goods/services in Vietnam as non-refundable aid or humanitarian aid at VAT-inclusive prices may claim a refund according to Clause 6 Article 18 of this Circular.

20. The goods involved in merchanting trade transactions or transited through Vietnam’s territory; goods temporarily imported or temporarily exported; raw materials imported for manufacturing or export processing under contracts with foreign partners.

The goods and services traded between a foreign party and a free trade zone, or among free trade zones.

Free trade zones include export-processing zones, export processing enterprises, tax-suspension warehouses, bonded warehouses, special economic zones, commercial - industrial zones, and other economic zones established and provided with similar tax incentives as free trade zones according to Decisions of the Prime Minister. The transactions between a free trade zone and an external party are considered export/import.

The procedures and documents for considering VAT exemption must comply with instructions of the Ministry of Finance on customs procedure; customs supervision and inspection; export and import duties and administration of tax on exports and imports.

21. Technology transfers according to the Law on Technology Transfer; intellectual property right transfers according to the Law on Intellectual Property. If a contract of technology transfer or intellectual property right transfer is associated with a transfer of machinery/equipment, only the value of transferred technology or intellectual property right is not subject to VAT. If such value cannot be separated, VAT shall be imposed on the total value of the transferred technology or intellectual property right and machinery/equipment.

Computer software including software products and software services as prescribed by law.

22. Imported gold in the form of bullions, pieces, and other forms that are not fashioned into fine art articles, jewelry or other products.

Gold in the form of bullions, pieces, and other forms of unfashioned gold shall be identified in accordance with the law on gold management and trading.

Exports that are products mainly derived from natural resources and/or minerals whose total value plus energy cost makes up at least 51% of the prime cost, except for some cases specified in Clause 1 Article 1 of the Decree No. 146/2017/ND-CP.

a) Natural resources and minerals are domestically obtained resources and minerals including metallic minerals, non-metallic minerals, crude oil, natural gas and coal gas.

b) Value rate of a natural resource or mineral and energy cost calculated on the prime cost shall be determined according to the following formula:

Where:

Value of a processed natural resource or mineral means is determined as follows: Value of a natural resource and mineral directly extracted is direct or indirect costs of extraction of such natural resource or mineral excluding costs of transport of such natural resource or mineral from place of extraction to place of processing. Value of a natural resource or mineral purchased for processing is the actual purchase price excluding costs of transport of such natural resource or mineral from place of purchase to place of processing..

Energy costs include fuel, electrical energy and heat energy.

The value of a natural resource and mineral and energy cost shall be determined according to the accounting book value in line with the prime cost sheet.

The prime cost of a product includes direct material cost, direct labor cost and general manufacturing cost. Indirect costs of sale, administration, finance and other affairs are not included in the prime cost.

The ratio of value of resources and energy cost to manufacturing cost of the exports shall be determined according to the previous year’s statement and apply stably in the exporting year. In the first exporting year, the ratio of value of resources and energy cost to manufacturing cost of the exports shall be determined according to the investment plan and apply stably in the exporting year. If an investment plan is not available, the aforementioned ratio will apply.

c) If an enterprise does not export but sells its products to another enterprise that then exports such products, the enterprise purchasing then exporting the products shall declare VAT as levied on similar products exported directly by the manufacturing enterprise.

d) Departments of Taxation of provinces and cities shall cooperate with regulatory authorities within their area in instructing enterprises manufacturing, trading and exporting products derived from natural resources and/or minerals to determine natural resources and minerals exported without or after further processing into other products according to product characteristics and product manufacturing process in order to make declaration as prescribed.

In case the enterprise declares a natural resource and/or mineral that has been processed into other products but it is it is ungrounded for classifying them as other products, the Department of Taxation shall inform the General Department of Taxation that will cooperate with Ministries and regulatory authorities in determining such natural resource and/or mineral exported without or after further processing into other products according to the enterprise’s exports manufacturing process.

24. Prosthetic body parts, including those permanently implanted into the human body; crutches, wheelchairs, and other special instruments serving the disabled.

25. Goods/services provided by any household business or individual business that earns an annual revenue of ≤ VND 100 million.

The tax liability of the household business or individual business shall be determined in accordance with the law on tax administration

26. The goods and services below:

a) Duty-free goods at duty-free shops prescribed by the Prime Minister.

b) Goods in national reserve sold by national reserve authorities.

c) Charged activities of the state according to the laws on fees and charged.

d) Bomb and mine clearance carried out by the army at the constructions funded by government budget.

If the goods that are not subject to VAT during importation are repurposed, VAT shall be declared and paid to the customs authority where the customs declaration is registered. The entities that sell goods to the domestic market must declare and pay VAT to their supervisory tax authorities.

Article 5. Cases in which it is not required to declare, assess and pay VAT

1. Organizations and individuals receive a monetary compensation (including compensation for land and property on land that is expropriated by a competent authority), bonus, allowance, or payment for transfer of emission permit, or other revenues.

Any taxpayer that receives a monetary compensation, bonus, allowance, payment for transfer of emission permits, or other revenues must make a receipt for such revenues. The taxpayer shall make receipts for spending according to the spending purposes.

If compensation is provided in the form of goods/services, the provider of compensation must issue an invoice, declare and pay VAT as if such goods/services are sold; the recipient of compensation shall declare and deduct tax as prescribed.

Any taxpayer that receives money from another entity to provide a service such as repair, warranty, sales promotion, or advertising must declare and pay tax as prescribed.

Example 10: Limited Liability Company P&C earns an interest from buying bonds and a dividend from buying shares of other companies. Limited Liability Company P&C is not required to declare and pay VAT on the interest buying bonds and the dividend.

Example 11: Enterprise A receives a compensation of VND 50 million for contract termination from company B. Company A shall make a receipt and is not required to declare and pay VAT on such amount.

Example 12: Enterprise X buys goods from enterprise Y. Enterprise X pays a deposit to enterprise Y and is paid an interest on that deposit by enterprise Y. Enterprise X is not required to declare and pay VAT on such interest.

Example 13: Enterprise X sells goods to company Z for totally VND 440 million. Under the contract, enterprise Z shall make payment in installments within 03 months with a late payment interest rate of 1% of the total payment per month. After 03 months, enterprise X receives from company Z an amount that includes VND 440 million in price and VND 13.2 million in late payment interest (VND 440 million x 1% x 3 months). Enterprise X is not required to declare and pay VAT on that VND 13.2 million.

Example 14: Insurer A and company B signs an insurance contract. When insurance is claimed, insurer A pays compensation in cash to company B as prescribed by the law on insurance. Company B is not required to declare and pay VAT on this compensation.

Example 15: ABC is a milk joint-stock company that pays its distributors to do a sales promotion (in accordance with the laws on trade promotion), marketing, and product display. When receiving the payment, the distributors that use credit-invoice method shall issue VAT invoices and calculate VAT at 10%, the distributors that use direct methods shall only use sale invoices and pay direct VAT at the prescribed rate.

2. A business organization or businessperson in Vietnam purchases services from a foreign organization that does not have a permanent establishment in Vietnam, or from an overseas individual that is not a resident in Vietnam. These services include: repair of vehicles, machinery, equipment (including supplies and parts); advertising, marketing; trade promotion; brokering sale of goods and services to abroad; training, international postal and telecommunications services that are provided outside Vietnam, lease on foreign satellite transmission lines and frequency bands.

3. The non-business organizations and individuals shall not pay VAT on the sale of their assets.

Example 16: Mr. A, who is not a businessperson, sells a 4-seat car to Mr. B for VND 600 million. Mr. A is not required to declare and pay VAT on the payment for the car.

Example 17: Mr. E, who is not a businessperson, pledges a 5-seat car at bank VC to take out a loan. Mr. E defaults on the loan when the repayment is due, thus bank VC liquidates the pledged car to recover the debt. The money collected from liquidating the car is not subject to VAT.

4. The entities that transfer project on investment in manufacturing of or trade in goods/services subject to VAT to other companies or cooperatives.

Example 18: Joint-stock Company P executes a project on construction of an industrial alcohol factory. In March 2014, 90% of the project is completed according to the design, and the investment is VND 26 billion. Due to financial difficulties, company P transfers the incomplete project to joint-stock company X for VND 28 billion. Company X receives and keeps executing this project. Company P is not required to declare and pay VAT on the value of the transferred project.

5.  A  company or cooperative that pays VAT using credit-invoice method and sells unprocessed or preprocessed farming, breeding, aquaculture products to another company or cooperative for commercial purposes shall be exempt from declaring and paying VAT. The selling price on the VAT invoice is VAT-exclusive price, the line of tax rate must be left blank and crossed out.

A company or cooperative that pays VAT using credit-invoice method and sells unprocessed or preprocessed farming, breeding, aquaculture products to other entities such as household businesses, individual businesses, other organizations or other individuals has to declare and pay 5% VAT according to Clause 5 Article 10 of this Circular.

A business household, individual business, enterprise, cooperative, or business entity that pays VAT directly on value added using direct method and sells unprocessed or preprocessed farming, breeding and aquaculture products for commercial purposes shall declare and pay VAT at 1% of the revenue.

Example 19: Company B, which pays VAT using credit-invoice method, purchases rice directly from the farmers or farming companies. This direct purchase of rice from the farmers or farming companies is not subject to VAT.

When company B sells rice to exporter C, company B is not required to declare and pay VAT on the rice sold to exporter C.

When company B sells rice to company D, which is a noodle producer, company B is not required to declare and pay VAT on the rice sold to company D.

On the invoices issued to exporter C and company D, company B must specify that the selling price is VAT-exclusive. The line of tax rate must be left blank and crossed out.

When company B directly sells rice to consumers, 5% VAT shall be declared and paid in accordance with the instructions in Clause 5 Article 10 of this Circular.

Example 20: Company A, which is a business organization that pays tax using credit-invoice method, buys coffee beans from farmers, then sells them to business household H. 5% VAT shall be levied on the revenue from selling coffee beans to business household H.

Example 21: After purchasing tea leaves from a farmer, Mr. X’s household sells them to Mr. Y’s household. Mr. X’s household must calculate and pay direct VAT at 1% of the revenue from selling tea leaves to Mr. Y’s household.

If VAT on the invoices for the unprocessed products or preprocessed products that are sold to a company or cooperative has been declared, the seller and the buyer must adjust the invoices to be exempt from VAT.

6. When transferring fixed assets which are currently being used and have been depreciated between a business establishment and its wholly-owned subsidiaries or among the these subsidiaries to serve the manufacturing or trade of goods/services subject to VAT, invoices and VAT payment are not required. The taxpayer that transfers their assets must make a Decision on asset transfer enclosed with the documents about the asset origins.

When transferring a fixed asset, the value of which has been reassessed, or when transferring an asset to another business establishment that manufactures or trades in goods/services that are not subject to VAT, VAT shall be paid and VAT invoices must be made.

7. Other cases:

Taxpayers are not required to declare and pay tax in the following cases:

a) Assets are contributed to establish a new company. Contributed assets must have: contribution record, partnership or cooperation contract; asset valuation record (made by a valuation council or the contributor or an organization licensed for valuation), and documents about asset origins.

b) Assets are circulated among financially dependent subsidiaries of an enterprise (hereinafter referred to as “dependent units”); assets are circulated when an enterprise is fully divided, partially divided, amalgamated, merged, or converted. When assets are so circulated, the taxpayer that has the circulated assets must make an asset circulation order enclosed with documents about the asset origins and is not required to issue invoices.

When assets are circulated among the financially independent subsidiaries or among the subsidiaries that have full legal status of the same taxpayer, the taxpayer that has the circulated assets must issue VAT invoice, declare and pay VAT as prescribed, except of the case in Clause 6 of this Article.

c) Compensation claimed from a third party under an insurance contract.

d) The delegated payments that are not related to the sale of goods/services of the taxpayer.

dd) The revenue from goods/services sold by agents, commissions paid to agents, including: postal and telecommunications services, lottery, air tickets, bus tickets, train tickets, ship tickets; international transport agents; air and maritime service agents entitled to 0% VAT; insurance agents.

e) Revenue and commissions on selling goods/services that are not subject to VAT.

g)9 The business establishment is not required to pay VAT on re-import of exported goods returned by the foreign buyer. VAT on returned domestic goods shall still be declared and paid as prescribed.

Such authorized collection and payment remunerations which are not subject to VAT declaration and assessment as prescribed in this point are those obtained from activities: collection of voluntary social insurance, voluntary health insurance premiums authorized by social insurance authorities; payment of benefits provided as an advantage for persons honored for their meritorious service, other benefits authorized by the Ministry of Labor, War Invalids and Social Affairs; collection of taxes paid by sole proprietors authorized by tax authorities and other collection and payment activities authorized by regulatory bodies.

Chapter II

TAX BASIS AND TAX CALCULATION METHOD

Section 1. TAX BASIS

Article 6. Tax basis

Tax basis is taxable prices and tax rates.

Article 7. Taxable prices

1. Taxable prices of goods and services sold by taxpayer are VAT-exclusive price. Taxable prices of goods and services subject to special excise tax are the prices inclusive of special excise tax and exclusive of VAT.

Taxable prices of goods and services subject to environmental protection tax are the prices inclusive of environmental protection tax and exclusive of VAT; taxable prices of goods and services subject to both special excise tax and environmental protection tax are the prices inclusive of special excise tax and environmental protection tax but exclusive of VAT.

2. Taxable prices of imported goods are the prices at the border checkpoint (hereinafter referred to as “import price”) plus (+) import tax (if any) plus (+) special excise tax (if any) plus (+) environmental protection tax (if any). Regulations on taxable prices of imported goods shall be applied to calculation of import prices.

If the goods are eligible for exemption or reduction of import duty, the taxable price is the import price plus (+) import tax payable after reduction or exemption.

3. Taxable prices of the goods and services (whether bought externally or not) used as gifts, donations, or substitute for wages are the taxable prices of the same kinds or equivalent goods and services at the same time.

Example 22: Unit A manufactures electric fans and exchange 50 fans with company B for steel. The selling price (tax-exclusive) is VND 400,000/fan. Taxable price = 50 x VND 400,000  = VND 20,000,000.

Taxable prices of the invitations (complimentary) to art performances, fashion shows, beauty pageants, and sports competitions permitted by competent authorities are zero (0). The organizer of the show or competition is responsible for the quantity of invitations and recipients before the show or competition takes places. If the organizer charges these invitations, the organizer shall incur penalties prescribed by tax laws.

Example 23: Company X is permitted by a competent authority to hold a beauty pageant named “Người đẹp Việt Nam năm 20xx” (“Miss Vietnam 20xx”). Apart from the tickets that are sold, company X also sends invitations to some VIPs. The list of recipients is printed on these invitations.  When declaring VAT, taxable price of the invitation is zero (0). If tax authority finds that company X collects money on these invitations, company X shall incur penalties prescribed by the law on tax administration.

Goods internally circulated as supplies or semi-finished products serving the operation of a manufacturing or business establishment are exempt from VAT.

When a business establishment creates its own fixed assets (self-created) to serve the manufacture or sale of goods subject to VAT, the business establishment is not required to issue invoices when such fixed assets are completed and approved. Input VAT on self-created fixed assets shall be declared and deducted as prescribed.

When machinery, equipment, supplies, or goods are delivered as a loan, borrowing, or repayment, the business establishment is not required to issue invoices and pay VAT, provided contracts and relevant proof of payment are available.

Example 24: Unit A is a manufacturer of electric fans. Unit A installs 50 of these fans in its workshops to server its business operation. Unit A is not required to pay VAT on these 50 electric fans.

Example 25: Facility B has a weaving workshop and a tailoring workshop. Facility B delivers finished thread from the weaving workshop to the tailoring workshop to proceed the manufacture. Facility B is not required to calculate and pay VAT on the thread delivered to the tailoring workshop.

Example 26: Joint-stock company P builds a rest house for its workers. Company P does not have any specialized unit to execute the construction. When the house is finished, company P is not required to issue an invoice. Input VAT on self-created fixed assets shall be declared and deducted as prescribed.

Example 27: Company Y is a company that produces bottled water. The VAT-exclusive price for a bottle on the market is VND 4,000. When company Y uses 300 bottles during its meeting, VAT shall not be paid.

Example 28: Company Y is a company that produces bottled water. The VAT-exclusive price for a bottle on the market is VND 4,000. Company Y delivers 300 bottles for purposes other than business purposes, company Y must declare and calculate VAT on these 300 bottles. The taxable price is VND 4,000 x 300 = VND 1,200,000.

When a business establishment using internal goods/services for business such as transport, aviation, rail transport, postal services and telecommunications, it is not required to calculated output VAT. The business establishment must issue written regulations on the types and quantity of goods/services used internally.

5. Taxable prices of goods and services used for sales promotion in accordance with trade laws are zero (0). In case they are not conformable with trade laws, tax shall be declared and paid as if they are used internally, given, or donated.

Some forms of sales promotion:

a) If goods or services are provided free of charge as samples or gifts, taxable prices are zero (0).

Example 29: Company P is a manufacturer of carbonated drinks. In 2014, company P does a sales promotion in the form of “buy 10 get 01 free" in May and December. The sales promotion in May 2014 is conformable with trade laws, thus taxable price of every product given free of charge in May 2014 is zero (0). The sales promotion in May 2014 is conformable with trade laws, thus taxable price of every product given free of charge in May 2014 is zero (0).

The sales promotion in December 2014 is not conformable with trade laws, thus company P must declare and pay VAT on the products given free of charge in December 2014.

b) If goods or services are provided at reduced prices, the taxable prices are the reduced prices during the sales promotion that has been registered or notified.

Example 30: N is a telecommunications company that sells prepaid cards. Company N registers a sale promotion in the form of price reduction from April 01, 2014 to the end of April 20, 2014, during which a prepaid card is sold for VND 90,000 instead of VND 100,000.

The taxable price of a prepaid card during the sales promotion: <Object: word/embeddings/oleObject1.bin>

c) If vouchers are given when goods or services are sold, VAT on is not levied on the vouchers.

6. Taxable prices of asset rental such as housing, offices, workshops, warehouses, yards, vehicles, machinery, equipment are the VAT-exclusive rents.

If the rent is paid by installments or prepaid for a period of time, the taxable price is the installment or the prepaid amount exclusive of VAT.

The rent agreed by both parties is the rent written in the contract. If a rent bracket is prescribed by law, the rent must be charged within that bracket.

7. If a commodity is paid for by installments, the taxable price is the original price exclusive of VAT and interest.

Example 31: Company X sells a 100cc X motorbike and allows its customer to pay for the motorbike by installments. The total price exclusive of VAT is VND 25.5 million, including VND 25 million in selling price and VND 0.5 million in interest, thus the taxable price is VND 25 million.

8. Taxable prices for goods processing are the prices under the processing contracts exclusive of VAT, inclusive of wages, costs of fuel, machinery, raw materials, and other expenses serving the processing.

9. Taxable prices of construction and installation are the VAT-exclusive values of the completed constructions or works.

a) If the price is inclusive of building materials, the taxable price is the VAT-exclusive price inclusive of building materials.

Example 32: Company B is contracted to complete a construction. The VAT-exclusive payment VND 1,500 million including VND 1,000 million in the value of building materials, then taxable price is VND 1,500 million.

b) If the price is exclusive of building materials, machinery, or equipment, the taxable price is the VAT-exclusive construction price exclusive of building materials, machinery, or equipment.

Example 33: Company B is contracted to complete a construction. The total value of the construction is VND 1,500 million (VAT-exclusive); the value of building materials provided by investor A is VND 1,000 million, then taxable price is VND 1,500 million - VND 1,000 million = VND 500 million.

c) Taxable prices of completed and transferred works are their VAT-exclusive value.

Example 34: Company X (party A) hires company Y (party B) to build a new workshop.

The total value (VAT-exclusive) of the construction is VND 200 billion, including:

- Construction value: VND 80 billion

- Value of equipment provided by party B: VND 120 billion

- 10% VAT: (VND 80 billion + VND 120 billion) x 10% = 20 billion VND

- Total amount payable: VND 220 billion

- Party A shall:

+ Receive the completed workshop and record an increase of VND 200 billion in the value of fixed assets (VAT-exclusive)

+ VND 20 billion in VAT may be deducted from output VAT on sold products or refunded.

If party A agrees to pay VND 80 billion to party B for the completed and transferred works, the taxable prices is VND 80 billion.

10. When transferring real estate, taxable price is the transferring price minus (-) deductible land value.

a) Deductible land value is calculated as follows:

a.1) If land is allocated by the state to build houses for sale, the deductible land value includes land levy and compensation for land clearance as prescribed by law.

Example 35: In 2014, real estate company A is allocated with land by the state to build houses for sale. Land levy is VND 30 billion (before deducting compensation for land clearance and land levy reduction).Land levy is reduced by 20%. Compensation for land clearance is VND 15 billion.

Total deductible land value:

- 20% reduction in land levy: VND 30 billion x 20% = VND 6 billion;

- Land levy payable after reduction: VND 30 billion - VND 6 billion - VND 15 billion = VND 9 billion;

- Deductible land value, including land levy payable (after reduction) and compensation for land clearance: VND 9 billion + VND 15 billion = VND 24 billion. The deductible land value is divided by the business area.

a.2) When land use right is put up for auction, the deductible land value is the successful bid.

a.3) If land is leased to invest in infrastructure for lease or to build houses for sale, the deductible land value is the land rent payable to government budget (exclusive of land rent reduction) and compensation for land clearance as prescribed by law. The Law on Land 2013 shall apply to the pieces of land leased to build houses for sale from July 01, 2014.

Example 36: VN-KR is a joint-stock company specialized in infrastructure for industry and services.  VN-KR leases land from the state and pays a lump sum of land rent to build infrastructure of an industrial park; the lease period is 50 years.  The land area is 300,000 m2, the rent is 82,000/m2. Accordingly, the total land rent is VND 24.6 billion.  VN-KR is not granted land rent reduction or exemption. After infrastructure is finished, VN-KR leases out 16,500 m2 to an investor with a lease period of 30 years; the rent is VND 650,000/m2, inclusive of VAT.

Accordingly, the VAT-inclusive rent for the infrastructure for 30 years:

VND 16,500 m2 x [VND 650,000 – (VND 82,000 /m2 : 50 years x 30 years)] = VND 9,9132 billion.

VAT-exclusive rent: <Object: word/embeddings/oleObject2.bin>billion dong

VAT = VND 9.012 billion x 10% = VND 0.9012 billion.

a.4) When a taxpayer receives land tenure from another entity, deductible land value is the land price when the transfer is made, inclusive of the value of infrastructure (if any); the taxpayer must not deduct input VAT on infrastructure value that has been included in the deductible land value.

If the deductible land value is exclusive of infrastructure value, the taxpayer may deduct input VAT on the infrastructure.

If the land price on the transferring date cannot be determined, deductible land value is the land price imposed by the People’s Committee of the province when the transfer contract is signed.

Example 37:12 (abolished)

Example 38: In November 2013, company A buys 300 m2 of land and infrastructure thereon from Mr. B for VND 10 billion without sufficient documents to determine the land price at that time. In April 2014, company A sells this piece of land together with the infrastructure thereon for VND 14 billion. Accordingly, the deductible land value is the land price imposed by the People’s Committee of the province when company A buys the piece of land (November 2013).

Example 39:

In September 2013, company B buys 2,000 m2 of land together with infrastructure thereon from real estate company A for totally VND 62 billion (including VND 40 billion in VAT-exclusive land price, meaning the unit price is VND 20 million/m2).

The invoice issued by company A indicates:

- VAT-exclusive selling price: VND 60 billion

- VAT-exclusive land price = VND 40 billion

- VAT on infrastructure: VND 2 billion

- Total amount payable: VND 62 billion

Company must declare VAT as follows:

VAT payable = output VAT - deductible input VAT

Assuming deductible input VAT is 1.5 billion VND, then:

VAT payable = VND 2 billion - VND 1.5 billion = VND 0.5 billion.

Company B keeps developing the infrastructure and 10 villas (200 m2/villa) for sale. Total input VAT on the villas is VND 3 billion.

On April 01, 2015, company B signs a contract to sell one villa to customer C for VND 10 billion. Deductible land value of the villa is calculated as follows:

- Land value (exclusive of infrastructure value) when the villa is sold by company A: VND 20 million x 200 m2 = VND 4 billion.

- Infrastructure value of a villa:

(20 billion VND: 2,000 m2) x 200 m2 = 2 billion VND

- Land value (exclusive of infrastructure value) when the villa is sold by company A: VND 6 billion.

The invoice issued by company B indicates:

- Selling price of a villa: VND 10 billion

- Deductible land value: VND 6 billion

- VAT = [(VND 10 billion - VND 6 billion) x 10% = VND 0.4 billion.

- Total amount payable: VND 10.4 billion

Assuming that company B sells out all 10 villas in the month. VAT payable by company B = output VAT - deductible input VAT = VND 0.4 billion x 10 villas - VND 3 billion = VND 1 billion.

VND 2 billion in VAT on infrastructure written on the invoice when company A sells these 10 villas shall not be deducted.

If company B does not include infrastructure value in the land value, which is 4 billion VND, the invoice shall be made as follows:

- Selling price of a villa: VND 10 billion

- Deductible land value: VND 4 billion

- VAT = [(VND 10 billion - VND 4 billion) x 10% = VND 0.6 billion.

- Total amount payable: VND 10.6 billion

Assuming that company B sells out all 10 villas in April 2015.  VAT payable by company B = output VAT - deductible input VAT (including the input VAT on the construction of the villas and input VAT on the infrastructure) = VND 0.6 billion x 10 villas - VND  3 billion - VND 2 billion (input VAT on infrastructure) = VND 1 billion.

a.5) If real estate under a build-transfer (BT) contract is paid with land use right, the deductible land value is the land price when the BT contract is signed. If the land price is unknown when the BT contract is signed, the deductible land value is the payment for the whole construction decided by the People’s Committee of the province as prescribed by law.

Example 40: Joint-stock company P signs a BT contract with the People’s Committee of province A to build a bridge in exchange for land tenure. The amount payable by the People’s Committee is VND 2,000 billion, and company P will be allocated with 500 hectares of land in district Y of the same province.  When company P uses this land to build houses for sale, the deductible land value is VND 2,000 billion.

a.6) When a real estate company buys the right to use a piece of agricultural land from an individual seller under a contract, then a competent authority permits the conversion of that piece of land into residential land where houses or apartment buildings are built for sale, the deductible land value is the price of the piece of land paid to the seller and other expenses, including land levy paid to government budget for land repurposing, personal income tax paid on behalf of the seller (if agreed by both parties).

a.7) When a multistory apartment building is built for sale, deductible land value of every m2 of housing equals (=) the deductible land value mentioned in Points a.1 to a.6 divided by (:) the area (m2) of floor area, exclusive of shared areas such as corridors, stairways, basement, and underground constructions.

b) When infrastructural works or houses are built for sale or for lease, taxable price equals (=) the amount of money collected during the progress of the project minus (-) the deductible land value, which is proportional to the ratio of collected money to the total value contract.

a.8)13 When a taxpayer receives land use right from another entity, deductible land price when calculating VAT is the price written on the capital contribution contract. If the price for transfer of land use right is lower than the price of contributed land, the former shall apply.

a.9)14 Where a real estate company signs a contract with a household or individual who have a piece of agricultural land to convert it into housing land and such conversion is conformable with regulations of law on land, taxable price shall equal transfer price minus (-) deductible land price. Transfer price is the price for compensation corresponding to the area of agricultural land that is withdrawn under a plan approved by a competent authority.

11. The VAT-exclusive remunerations or commissions for running an agent or brokering the sale of goods/services, export and import entrustment are taxable prices.

12. Taxable prices of the goods and services using special receipts on which the selling prices are VAT-inclusive, such as stamps, bus tickets, lottery tickets, etc.:

13. Taxable prices of electricity generated by hydroelectric power plants affiliated to Vietnam Electricity (EVN), including electricity generated by the hydroelectric power plants affiliated to the power generation corporations affiliated to EVN, are 60% of the average selling price of commercial electricity in the previous year, exclusive of VAT. If the average selling price of commercial electricity in the previous year is unknown, the price provisionally imposed by EVN shall apply, provided such price is not lower than the average selling price of commercial electricity in the year preceding the previous year. When the average selling price of commercial electricity in the previous year is found, an adjustment shall be included in the declaration of the month in which the price is found. The average selling price of commercial electricity in the previous year must be found by March 31 of the next year.

14. Taxable prices of casino, prize-winning electronic games and betting entertainment services are the amount of money collected from such services (inclusive of VAT) minus (-) special excise tax.

Taxable price is calculated as follows:

Example 41: In a tax period, a casino presents the following figures:

- Total amount collected from players at the exchange counter: VND 43 billion.

- Total amount returned to players: 10 billion VND.

Actual revenue: VND 43 billion - VND 10 billion = VND 33 billion

The revenue of VND 33 billion is inclusive of VAT and special excise tax.

Taxable price is calculated as follows:

15. Taxable prices of transport and material handling services are the VAT-exclusive charges, whether the materials are handled by the taxpayer itself or by another service provider.

16. The price of an all-inclusive package of travel services (inclusive of meals, accommodation, and travel) is considered VAT-inclusive.

Taxable price is calculated as follows:

If the price is inclusive of the costs of return flights, meals, accommodation, and other expenses overseas (if valid receipts are presented), such costs may be deducted from the taxable price. Input VAT on the goods and services serving the all-inclusive tour shall be deducted in full.

Example 42: Tourism company H signs a contract to provide an all-inclusive package tour in Vietnam for 50 Thai tourists for 05 days. The total payment for the tour is USD 32,000. Company H must pay for the air tickets, meals, accommodation, and sightseeing under the contract. The payment for return air tickets is USD 10,000 (1 USD = 20,000 VND).

The taxable price is calculated as follows:

+ Taxable revenue:

(USD 32,000 - USD 10,000) x VND 20,000 = VND 440,000,000

+ Taxable price:

Company H may deduct the input VAT on the goods and services serving the tour.

Example 43: Tourism company N signs a contract to provide an all-inclusive tour in China for Vietnamese tourists for 05 days. The price is USD 400/tourist. Company N must pay USD 300/person to tourism company C in China. Accordingly, the taxable price is: 400 - 300 = 100 (USD/person).

17. The collectible from pawnbroking services, including the interest and other revenues from the sale of pawned articles, is VAT-inclusive.

Taxable price is calculated as follows:

Example 44: A pawnshop earns VND 110 million in a tax period.

Taxable price is calculated as follows:

18. The prices on the covers of the books subject to VAT according to the Law on Publishing are VAT-inclusive prices and shall be used to calculate VAT and revenues. If books are sold at prices other than the prices on the cover, VAT shall be imposed on the actual selling price.

19. Taxable prices of printing is the payment for printing. If the contractual price includes printing price and paper price, the taxable price is also inclusive of paper price.

20. VAT-exclusive remunerations or commissions on brokering assessment, brokering compensation examination, claiming compensation from a third person (including the costs) earned by the insurer are taxable prices.

21. In the case of service purchase in Clause 5 Article 3 of this Circular, taxable price is the VAT-exclusive price written in the service contract.

22. Taxable price of the goods and services mentioned in Clauses from 1 to 21 include the surcharges payable to the sellers.

If the seller offers a discount, the taxable price is the discounted price. If the discount is offered according to the sales, the discount shall be included in the invoice for the last sale or transferred to the next period. If the discount is offered after the sales promotion is over, an adjustment shall be made, specifying the numbers of the invoices that need adjusting and the adjustments to the payments and tax.  According to the adjusted invoice, the buyer and the seller shall adjust their revenues, input and output taxes.

Taxable price is expressed as VND.

Article 8. Time for calculating VAT

1. For goods sale, VAT shall be calculated when the ownership or the right to use goods is transferred to the buyer, whether the payment is made or not.

2. For service provision, VAT shall be calculated when service provision is completed or when the invoice for service provision is made, whether the payment is made or not.

For telecommunications services, VAT shall be calculated when comparing the data about telecommunications charge according to the contracts between telecommunications service providers, but not later than 2 months from the month in which the charge is incurred.

3.  For electricity and water supply, VAT shall be calculated when the electricity or water consumption is recorded.

4. For real estate trading, construction of infrastructures, houses for sale or for lease, VAT shall be calculated when money is collected according to the project schedule or the contract. The taxpayer shall declare output VAT incurred in the tax period according to collected amount.

5. For construction and installation, including shipbuilding, VAT shall be calculated when the construction or a work is completed and put into use regardless of whether the payment is made or not.

6. For imported goods, VAT shall be calculated when the customs declaration is registered.

Article 9. Tax rate of 0%

1. 0% VAT is applied to exported goods and services; construction and installation overseas and in free trade zones; international transport; exported goods and services that are not subject to VAT, except for the cases in Clause 3 of this Article, in which 0% VAT is not applied.

Exported goods and services are those that are sold to overseas organizations and individuals and are consumed outside Vietnam, sold to the entities in free trade zones, or sold to foreign customers as prescribed by law.

a) Exported goods include:

- The goods exported to other countries, including those under entrustment contracts;

- The goods sold to free trade zones as prescribed by the Prime Minister; the goods sold to duty-free shops;

- The goods that are delivered to the recipients outside Vietnam;

- Parts and supplies for repairing, maintaining vehicles, machinery, and equipment of foreign entities, and those that are used outside Vietnam;

- Cases of deemed exportation:

+ Forwarded processed goods under trade laws on international goods trade and export processing.

+ Goods for in-country export as prescribed by law.

+ The goods exported to be sold at overseas fairs or exhibitions.

b) Exported services include the services directly provided for overseas organizations and individuals and are consumed overseas; the services provided for the entities in free trade zones and consumed within the free trade zones.

Overseas individuals are the foreigners that do not reside in Vietnam, the Vietnamese people that reside overseas and are not present in Vietnam when the services are provided. The entities in free trade zones are the entities that have registered their business and other cases prescribed by the Prime Minister.

If services are provided both in Vietnam and overseas, but the service contract is signed between two taxpayers in Vietnam or two taxpayer that have permanent establishments in Vietnam, 0% tax is only applied to the services provided overseas, except for the case of insurance for imported goods, in which 0% tax is applied to the whole contract value.  If the contract does not separate the services provided in Vietnam, taxable price shall be determined according to the ratio of expense incurred in Vietnam to the total expense.

The service provider that is a taxpayer in Vietnam must provide documents proving that the services are provided outside Vietnam.

Example 45: Company B signs a contract with company C to provide some services including consultancy, survey, and design for company C’s project of investment in Cambodia (both company B and company C are Vietnamese companies). According to the contract, there are services that provided in Vietnam and services provided in Cambodia. 0% tax shall apply to the value of the services provided in Cambodia. Company B must pay VAT on the revenue from the services provided in Vietnam.

Example 46: Company D provides some services for company X, including consultancy, survey, and feasibility study on a project in Laos. Company D is paid VND 5 billion for this contract, inclusive of VAT on the services provided in Vietnam. The contract does not separate the revenue earned in Vietnam from the revenue earned in Laos. The expense incurred in Laos (cost of survey) is VND 1.5 billion and the expense incurred in Vietnam (cost of consolidating and reporting) is VND 2.5 billion.

The VAT-inclusive revenue from the services provided in Vietnam is calculated as follows:

If company D presents documents proving that company D sent employees to Laos to carry out the survey, and the documents proving that company D purchased goods serving the survey in Laos, 0% tax shall be applied to the revenue from the services provided in Laos, which equals 1.875 VND billion (VND 5 billion – VND 3.125 billion = VND 1.875 billion).

c) International transport includes passenger transport and freight transport along international routes from to other countries and vice versa, or from one foreign country to another, regardless of the availability of vehicles. If the international contract includes a domestic segment, the segment is also considered international transport.

Example 47: Company X in Vietnam uses their ships to transport goods from Singapore to Korea.  The revenue from this transport is considered revenue from international transport.

d) Aviation services and maritime services directly provided to overseas organizations or via agents, including:

0% tax shall be applied to the following aviation services: catering; aircraft takeoff and landing; airport apron; aircraft security; security screening; luggage conveyance at terminals; terrestrial technical services; aircraft protection; aircraft towing; aircraft guiding; passenger boarding bridges; air controlling; flight crew and passenger transport in the airport apron; freight handling and checking; passenger service charges for international flights from Vietnamese airports.

0% tax shall be applied to the following maritime services: ship towing; pilotage; sea rescue; wharves; freight handling; moorings; hatch control; hull cleaning; freight checking; registration.

dd) Other goods and services:

- Construction or installation overseas or in free trade zones;

- The goods and services that are not subject to VAT when being exported, except for the cases in Clause 3 of this Article, in which 0% tax is not applied;

- Aircraft or vessel repair services provided to foreign organizations or individuals.

2. Conditions for application of 0% tax:

a) The documents below are compulsory for exports:

- A sale contract, export processing contract, or export entrustment contract;

- Bank receipts for payment for exports and other documents prescribed by law;

- A customs declaration prescribed in Clause 2 Article 16 of this Circular.

If goods are delivered to a recipient outside Vietnam, the seller must provide documents proving the delivery of goods outside Vietnam such as: a contract to buy goods signed with an overseas buyer, a contract to sell goods signed with the buyer, documents proving that goods are received outside Vietnam such as commercial invoices, bills of lading, packaging notes, Certificates of Origin, etc.; bank receipt for the payment to the overseas seller by the taxpayer, bank receipt for the payment to the taxpayer by the buyer.

Example 48. Company A and company B signs a contract to buy grease (both of them are Vietnamese companies).  Company A buys grease from several companies in Singapore, then sell it to company B at a port of Singapore.  If company A has contracts to buy grease signed with the companies in Singapore, the contract to sell grease to company B, documents proving that goods have been delivered to company B at a port in Singapore, bank receipts for the payments to grease companies in Singapore, and a bank receipt for the payment to company A by company B, 0% tax may be applied to the revenue earned by company A from selling grease to company B.

b) The documents below are compulsory for exported services:

- A contract to provide services for an organization or individual in another country or in a free trade zone;

- Bank receipts for payment for exported services and other documents prescribed by law;

Apart from presenting the aforesaid documents, providers of repair services for foreign aircraft and sea vessels must follow the procedure for importing the aircraft or vessel to Vietnam, and follow the procedure for exporting them after they are repaired in order to be eligible for 0% tax.

c) The documents below are compulsory for international transport:

- A international passenger transport or freight transport contract between the service provider and the service buyer. For passenger transport, the contract may be substituted with tickets. Providers of international transport services must comply with regulations of law on transport.

- Documents proving that payment is made by bank transfer or another method considered bank transfers. Receipts for direct payment are compulsory for passenger transport.

d) For aviation services and maritime services:

d.1) 0% tax shall be applied to the services provided within the international airports and cargo terminals, provided the following documents are presented:

- A service contract with an overseas organization or airline, or a written request for services by an overseas organization or airline;

- Receipts for bank transfers or other payments considered bank transfer. If services are provided for an overseas organization or airline on an irregular, unscheduled basis without any contract, a receipt for direct payment made by the overseas organization or airline is compulsory.

The aforesaid documents are not compulsory for passenger service charges.

d.2) 0% tax shall be applied to the maritime services provided within the port area, provided the following documents are presented:

- A service contract with an overseas organization or a shipping agent, or a written request for services by an overseas organization or shipping agent;

- Documents proving that the overseas organization or shipping agent makes payment to the service provider is made by bank transfer or another method considered bank transfer.

- Overseas reinsurance; technology transfer, overseas transfer of intellectual property rights; capital transfer, credit extension, outward securities investment; derivative financial services; outbound postal and telecommunications services (including those provided for the entities in free trade zones; provision of sale of prepaid phone cards abroad or in free trade zones); exported products being natural resources and minerals as per Clause 23 Article 4 of the Circular; tobacco and alcoholic beverages imported then re-exported; goods and services provided for individuals who have not registered to do business in free trade zones, except for the cases defined by the Prime Minister;

Tobacco and alcoholic beverages that are imported then exported shall not incur output VAT upon export. However, input VAT shall not be deducted.

- Petroleum supplied domestically to motor vehicles of the businesses that operate in free trade zones;

- Motor vehicles sold to the entities that operate in free trade zones;

- Services that business establishments provide to the entities operating in free trade zones, such as: leasing of houses, conference rooms, offices, hotels, warehouses; transportation of workers; food and beverage (except the industrial catering service and food and beverage service rendered in free trade zones);

- The tax rate of 0% is not applicable to the following services provided in Vietnam to overseas entities:

+ Sports competition, art performances, cultural events, entertainment, conference, hotel, education, advertisement and tourism;

+ Online payment services;

+ Services in connection with the sale, distribution and consumption of goods in Vietnam.

Article 10. Tax rate of 5%

10% tax shall be levied on the goods and services below:

1. Clean water serving manufacture and everyday life, except for bottled water and other soft drinks subject to 10% tax.

b) Ores used for manufacture of fertilizers such as apatite ore used for manufacture of phosphate fertilizers, humus used as biofertilizers;

b) Pesticides including agrochemicals on the List of agrochemicals complied by the Ministry of Agriculture and Rural Development and other pesticides;

c) Growth stimulants for plants and animals.

4. Dredging channels, canals, ponds, and lakes serving agriculture; plant cultivation; preprocessing and preservation of agricultural products (except for dredging in-field trenches mentioned in Clause 3 Article 4 of this Circular).

Preprocessing and preservation of agricultural products include drying, husking, threshing, cutting, grinding, putting into cold storage, salting, and other usual means of preservation mentioned in Clause 1 Article 4 of this Circular.

5. The farming, breeding and aquaculture products that are unprocessed or preprocessed or preserved (defined in Clause 1 Article 4 of this Circular), except for the cases in Clause 5 Article 5 of this Circular.

The unprocessed farming products mentioned in this Clause include unhusked rice, husked rice, corn, potatoes, cassava and wheat.

6. Preprocessed latex in the form of crepe, sheets, rubber or nuggets; preprocessed turpentine; fishing nets, cords and fibers for making fishing nets; specialized fibers or cords for making fishing nets, regardless of raw materials.

7. Fresh foods for business, unprocessed forestry products for business, except for wood, bamboo sprouts, and the products enumerated in Clause 1 Article 4 of this Circular.

Fresh foods include the foods that have not been cooked or processed into other products, or have only been cleaned, skinned, cut, frozen, or dried in a way that they are still fresh foods such as meat of livestock and poultry, shrimps, crabs, fish, and other aquaculture products. 10% tax shall be levied on seasoned foods.

Unprocessed forestry products include the products from natural forests such as rattan, bamboo, mushrooms, roots, leaves, flowers, herbs, resin, and other forestry products.

Example 49: Company A produces seasoned triggerfish under the following procedure: fresh triggerfish are caught and filleted, then seasoned with sugar, salt, solpitol, then packaged and frozen. The seasoned triggerfish is subject to 10% VAT.

8. Sugar; by-products during the sugar manufacture process including molasses, bagasse and mud waste.

9. Products made of jute, sedge, bamboo, rattan, thatch, reed, thysanoloena maxima Kuntze, dendrocalamus barbatus, straws, copra, coconut shells, hyacinth and other handicrafts made of recycled materials from agriculture being products produced or processed from main materials being jute, sedge, bamboo, reed, thysanoloena maxima Kuntze or dendrocalamus barbatus and thatch such as jute carpets, jute fibre, jute bags, jute strings, coconut fiber or sedge mats; grass brooms and ropes made of bamboo or coconut fibers, conical hats, bamboo blinds; bamboo chopsticks, dendrocalamus chopsticks; preprocessed cotton; newspaper printing paper.

Cotton wool, bandages, gauze pads, and medical tampons; medicines including finished medicines and raw materials, except for functional foods; vaccines; bioproducts, distilled water to mix with injectable medicines or intravenous fluids; caps, clothing, facemasks, gloves, boots, medical towels, breast implants and skin fillers (not including cosmetics); chemicals used for testing and sterilization.

12. Teaching aids including models, pictures, boards, chalks, rulers, compasses, other equipment and instruments for teaching, research, and scientific experimentation.

13. Artistic, exhibition, physical training and sporting activities; art performances; cinematography; importing, distributing, and showing films.

a) Artistic, exhibition, physical training and sporting activities except for revenues from the sale of goods, the lease of parking areas and from fair and exhibition booths.

b) Artistic performances such as tuong, cheo, cai luong, singing, dancing, musical performances, drama and circuses; other types of artistic performance and art performance organization services by opera companies, performing groups and circuses which must be licensed by the competent authority.

c) Cinematography; importing, distributing, and showing films, except for the products mentioned in Clause 15 Article 4 of this Circular.

14. Children’s toys; books other than those that are not subject to VAT mentioned in Clause 15 Article 4 of this Circular.

15. Scientific and technological services which mean the activities that serve or assist in scientific research and technology development; the activities related to intellectual property; transfer of technologies, technical regulations and standards related to measurement, product quality, goods, nuclear and radiation safety, and atomic energy; consultancy, training, dissemination, and application of scientific and technological achievements to socio-economic fields under contracts for scientific and technological services defined in the Law on Science and Technology, not including online games and Internet-based entertainments.

16. Sale, lease, and lease purchase of social housing according to the Law on Housing. Social housing means the housing invested in by the state or the organizations and individuals from various economic sectors, which satisfy the criteria for housing in terms of selling prices, rents, and eligible buyers according to regulations of law on housing.

Article 11. Tax rate of 10%

10% tax shall be levied on the goods and services that are not mentioned in Article 4, Article 9 and Article 10 of this Circular.

The rates of VAT mentioned in Article 10 and Article 11 shall be uniformly applied to the each type of goods and services, whether they are imported, manufactured, processed, or traded.

Example 50: 10% tax is levied on apparel. That means the tax rate is always 10% whether such apparel is imported manufactured, processed, or traded.

VAT on the products made of recycled wastes and scrap is the same as VAT on the wastes and scrap when they are sold.

If a taxpayer sells various goods and services that are subject to various rates of VAT, they must be sorted by VAT rates. Otherwise, the highest rate of VAT among which shall apply.

If the rate of VAT in the preferential import tariff schedule is found unconformable with this Circular, this Circular shall apply. If different rates of VAT are applied to the same kind of goods that are imported or manufactured in Vietnam, the local tax authority and customs authority must send a report to the Ministry of Finance for guidance.

Section 2. TAX CALCULATION

Article 12. Credit-invoice method

1. Credit-invoice method is applied by the taxpayers that adhere to the accounting and invoicing practice according to accounting and invoicing laws, including:

a) Any taxpayer that earns at least 1 billion VND in annual revenue from selling goods and services Credit-invoice, provided the taxpayer adheres to the accounting and invoicing practice according to accounting and invoicing laws, except for household and individual businesses mentioned in Article 13 of this Circular;

b) Any taxpayer that voluntarily applies credit-invoice method, except for the household and individual businesses that pay tax using direct method mentioned in Article 13 of this Circular;

c) Any foreign entity that provides goods and services serving petroleum exploration and extraction and oil field development and authorizes a Vietnamese party to deduct tax.

2. The annual revenue mentioned in Point a Clause 1 of this Article is the revenue from selling taxable goods and services, which is calculated as follows:

a) Annual revenue earned by a taxpayer is determined by the taxpayer itself according to “Total revenue from selling goods and services subject to VAT” on the VAT declarations from November of the previous month to the end of October of the current year, which precedes the year in which tax accounting method may be changed; or on the VAT declarations from the fourth of the previous year to the end of the third quarter of the previous year, which precedes the year in which tax accounting method may be changed. The method shall be applied for two consecutive years.

Example 51: Enterprise A was established in 2011 and still operating in 2013. To determine the tax accounting method applied in 2014, enterprise A shall calculate its annual revenue by aggregating the revenue from selling goods and services subject to VAT on the monthly VAT declarations from November 2012 to the end of October 2013.

If the annual revenue calculated is VND 1 billion or more, enterprise A may apply credit-invoice method for 02 years (2014 and 2015).

If the annual revenue calculated is less than VND 1 billion, enterprise A must apply direct method according to Article 13 of this Circular for 02 years (2014 and 2015), unless enterprise A voluntarily applies credit-invoice method according to Clause 3 of this Article.

b) If the company has not operated for 12 months, the annual revenue shall be estimated by aggregating the revenue from selling goods and services subject to VAT on the monthly VAT declarations and dividing (:) it by the operational months, and then multiplying (x) it by 12 months. If the estimated annual revenue is VND 1 billion or more, the enterprise may apply credit-invoice method. If the estimated annual revenue is less than VND 1 billion, the enterprise must apply direct method for 02 years, unless it voluntarily applies credit-invoice method.

Example 52: Enterprise B was established and inaugurated from March 2013. To determine the tax accounting method applied in 2014 and 2015, enterprise B estimates its annual revenue by aggregating the revenue from selling goods and services subject to VAT on the monthly VAT declarations of March, April, May, June, July, August, September, October, and November, dividing (:) it by 9 months, and then multiplying (x) it by 12 months.

If the estimated annual revenue is VND 1 billion or more, the enterprise may apply credit-invoice method. If the estimated annual revenue is less than VND 1 billion, enterprise B must apply direct method for 02 years, unless it voluntarily applies credit-invoice method.

c) If the company starts declaring tax quarterly from July 2013, the annual revenue shall be calculated by aggregating the total revenue from selling goods and services subject to VAT on the monthly VAT declarations of October, November and December in 2012, the first six months of 2013, and the VAT declaration of the third quarter of 2013. If the annual revenue calculated is VND 1 billion or more, the enterprise shall apply credit-invoice method. If the annual revenue is less than VND 1 billion, the enterprise must apply direct method for 02 years, unless it voluntarily applies credit-invoice method.

d) If the taxpayer suspends their business for the whole year, the annual revenue is the revenue of the year preceding the year over which the business is suspended.

If the taxpayer suspends their business for a certain period of time in the year, the revenue earned during the operational months and quarters according to Point b of this Clause shall be considered annual revenue.

If the business is not in operation for the full 12 months in the year preceding the year over which the business is suspended, the revenue earned during the operational months and quarters according to Point b of this Clause shall be considered annual revenue.

a) Any enterprise or cooperative that earns an annual revenue of below VND 1 billion from selling goods or providing services subject to VAT and adhere to regulations on bookkeeping and invoicing.

b) Any new enterprise derived from a project of a business establishment that pays VAT using credit-invoice method.

Any new enterprise that is making investment in a project approved by a competent authority and voluntarily applies credit-invoice method.

Any new enterprise or cooperative that has a project, which is not approved by a competent authority, an investment plan approved by a competent person of the company, and voluntarily applies credit-invoice method.

c) Any new enterprise or cooperative that makes investment, purchases, or receives capital contribution in the form of fixed assets, machinery, equipment, tools, or has a contract to lease business premises.

d) Any foreign entity doing business in Vietnam under a main contract or subcontract.

dd) Any business entity that can separate input VAT from output VAT, excluding enterprises and cooperatives.

a) If a business establishment trades in jewelry, it must separate revenue from this operation and apply direct method to pay VAT thereon in accordance with Article 13 of this Circular.

b) When an enterprise applying credit-invoice method establishes branches (including those derived from its projects), the tax calculation method applied by the branches is the same as that applied by the enterprise if such branches declare VAT independently. Any branch that does not sell goods, does not earn revenue, or any branch in the same province as the headquarter which does not declare tax independently shall have tax declared at the headquarter of the enterprise.

c) Any new enterprise or cooperative that is not mentioned in Clause 3 of this Article shall apply the direct method prescribed in Article 13 of this Circular.

d)24 (abolished)

5. VAT payable:

Where:

a) Output VAT equals the total VAT on sold goods and services written on the VAT invoices.

The VAT written on a VAT invoice equals (=) taxable prices of goods and services multiplied by (x) corresponding tax rates.

If the selling price is VAT-inclusive, output VAT equals (=) selling price minus (-) taxable price according to Clause 12 Article 7 of this Circular.

The taxpayer that is eligible to use credit-invoice method must calculate and pay VAT on goods and services when they are sold. When issuing a sale invoice, the taxpayer must clearly write the VAT-exclusive prices, VAT, and total amount payable by the buyer. If the invoice only has the selling price (where special invoices are allowed) without specifying the VAT-exclusive price and VAT, the VAT shall be levied on the selling price.

Example 54: An enterprise sells F6 steels at VAT-exclusive price VND 11,000,000/tonne; 10% VAT = 1,100,000 VND/tonne. However, the selling price written on some invoices is VND 12,100,000 /tonne. In this case, VAT will be VND 1,210,000 /tonne (VND 12,100,000 /tonne x 10%) instead of the pre-tax price of VND 11,100,000 /tonne.

Taxpayers must adhere to accounting and invoicing practice in accordance with the laws on accounting and invoicing. In case the tax authority finds an incorrect VAT rate on an invoice for the sale of goods and services, follow the instructions below:

If the incorrect VAT rate is higher than that prescribed by the legislative documents on VAT, the taxpayer must pay tax at the rate written on the invoice; if the incorrect VAT rate is lower than that prescribed by the legislative documents on VAT, the taxpayer must pay tax at the rate prescribed by the legislative documents on VAT.

b) Input VAT equals (=) total VAT on invoice VAT for purchase of goods and services (including fixed assets) serving the manufacture or sale of taxable goods and services, VAT on receipts for payment of tax on imported goods or payment of VAT on behalf of a foreign organization, which does not have a legal status in Vietnam, or a foreigner doing business in Vietnam or earning income in Vietnam.

If special receipts, on which selling prices are VAT-inclusive, are permitted, the taxpayer may calculate VAT-exclusive prices and input VAT according to the VAT-inclusive prices and the instructions in Clause 12 Article 7 of this Circular.

Deductible input VAT shall be calculated in accordance with Articles 14 to 17 of this Circular.

Example 55: In a tax period, company A pays VND 110 million inclusive of VAT for deductible input services that are subject to 10% tax (special receipts bearing VAT-inclusive prices are used for the services), then deductible input VAT is calculated as follows:

VAT-exclusive price is VND 100 million; VAT is VND 10 million.

In case the tax authority finds an incorrect VAT rate on an invoice issued by the goods buyer:

If the VAT rate on the invoice is higher than that prescribed by tax laws, input VAT shall be deducted at the rate prescribed by the legislative documents on VAT. If it is proven that the seller declared and paid tax at the rate on the invoice, input VAT may be deducted at the rate written on the invoice as long as it is certified by the supervisory tax authority of the seller. If the VAT rate on the invoice is lower than that prescribed by the legislative documents on VAT, input VAT shall be deducted at the rate written on the invoice.

In case the tax authority finds an incorrect VAT rate on an invoice issued by the goods seller: If VAT has been paid by the seller when goods are imported, and the VAT rate on the VAT invoice issued to consumer is equal to the VAT rate declared when goods are imported and when goods are sold, but this rate is lower than that prescribed by the legislative documents on VAT and the taxpayer is not able to collect additional payment from the consumer, then the payment collected from the consumer under the VAT invoice is considered inclusive of VAT at the rate prescribed by the legislative documents on VAT, which is used to calculate VAT payable and revenue subject to corporate income tax.

Example 56: In March 2014, taxpayer A, who is eligible to apply credit-invoice method, imports products named “CHAIR MM”, and has paid 5% VAT during importation.  In May 2014, taxpayer A sells 01 “CHAIR MM” to buyer B for VND 100 million exclusive of VAT. Because 5% VAT has been paid during importation, the VAT invoice issued by taxpayer A to buyer B indicates VND 100 million in taxable price, 5% VAT, VND 5 million in VAT, and VND 105 million in total amount. This amount has been paid off by buyer B.

In 2015, tax authority finds that the VAT rate applied by taxpayer A is incorrect (the correct rate is 10%).  Because the transaction between taxpayer A and buyer B has finished, company A cannot collect any additional payment from buyer B (buyer B refuses to pay any additional tax). The VAT payable by taxpayer A and the taxable revenue are determined by the tax authority as follows:

The total payment made by buyer B, which is VND 105 million, is considered inclusive of 10% VAT. The correct VAT payable is:

Additional VAT payable by taxpayer A:

VND 9.545 million - VND 5 million = VND 4.545 million.

Taxable revenue from selling the “CHAIR MM” to buyer B:

VND 105 million - VND 9.545 million = VND 95.455 million.

Article 13. Direct method

Value added of gold, silver and precious stones equals (=) its selling price minus its buying price..

The selling price of gold, silver and precious stones is the price written on the invoice, inclusive of crafting cost (if any), VAT, and surcharges to which the seller is entitled.

The buying price of gold, silver and precious stones is the VAT-inclusive value of gold, silver and precious stones purchased or imported for crafting or trading the gold, silver and precious stones sold.

In the tax period, any negative value added of gold, silver and precious stones shall be offset against their positive value added. If the positive value added is not available or not sufficient to completely offset against the negative value added, the negative value added shall transferred to the next period in the same year. At the end of the calendar year, any residual negative value added shall not be transferred to the next year.

2. Cases in which VAT is calculated by directly multiplying a rate (%) by the revenue (hereinafter referred to as “direct VAT”):

a) This method may be applied by the following entities:

- The operational enterprises and cooperatives that earn less than VND 1 billion in annual revenues, except for those that voluntarily apply credit-invoice method prescribed in Clause 3 Article 12 of this Circular;

- The new enterprises and cooperatives, except for those that voluntarily apply credit-invoice method prescribed in Clause 3 Article 12 of this Circular;

- Household and individual businesses;

- The foreign entities doing business in Vietnam without following the Law on Investment; the organizations that fail to adhere to accounting and invoicing practice, except for those that provide goods and services serving petroleum exploration and extraction and oil field development.

- The business entities other than enterprises and cooperatives, except for those that voluntarily apply credit-invoice method.

b) Direct VAT rates applied to various business lines:

- From goods distribution or goods supply: 1%;

- From services or construction exclusive of building materials: 5%;

- Manufacturing, transport, services associated with goods, construction inclusive of building materials: 3%;

- Other lines of business: 2%.

c) The taxable revenue is the total revenue from selling goods and services, which is written on the sale invoice for taxable goods and services, inclusive of the surcharges to which the seller is entitled.

The rates above are not applied to the revenue from selling the goods and services that are not subject to VAT and revenue from exported goods and services.

Example 57: Company A is a company that declares and pays VAT using direct method. Company A earns revenue from selling computer software and consultancy on company establishment. Company A shall not pay direct VAT from selling computer software, which is not subject to VAT), and must pay direct VAT at 5% of the revenue from consultancy on company establishment.

If the taxpayer engages in various lines of business to which different rates are applied, they must be sorted by VAT rate. Otherwise, the highest rate among which shall apply.

3. The direct VAT payable by a household business or individual business that pays VAT at a flat rate depends on the declaration made by the taxpayer, the data of the tax authority, the result of the investigation into the taxpayer’s actual revenue, and opinions of the local Tax Advisory Council.

If the taxpayer that pays tax at a flat rate engages in multiple lines of business, the rate on the primary business line shall be applied.

4. The list of direct VAT rates mentioned in Clause 2 and Clause 3 of this Article is enclosed herewith.

Chapter III

TAX DEDUCTION AND TAX REFUND

Section 1. TAX DEDUCTION

Article 14. Rules for deducting input VAT

1. Input VAT on goods and services serving the manufacture or sale of goods/services subject to VAT shall be deducted in full, including non-refundable input VAT on damaged goods.

Non-refundable input VAT on damage goods may be deducted in an event of natural disaster, blaze, damage that is not covered by insurance, degraded or expired goods that must be destroyed. The taxpayer must present sufficient documents to prove the damage not covered by insurance.

If goods diminish naturally during transport or pumping (such as petrol, oil, etc.), input VAT on the lost amount of goods within the tolerance may be deducted. Input VAT on the lost amount beyond the tolerance must not be deducted.

Input VAT on goods and services forming fixed assets such as canteen, recreation room, locker room, parking lot, restroom, water tank serving workers at the workplace, housing and medical facility for workers in industrial parks shall be deducted in full.

VAT on the rents for the houses for workers in an industrial park paid by the taxpayer may be deducted if the houses are conformable with laws on houses for workers in industrial parks in terms of design standards and rents. If the taxpayer builds or purchases houses outside the industrial parks serving workers in the industrial park, VAT on these housed may be deducted in full if they are conformable with the design standards applied to houses for workers in industrial parks.

When a taxpayer pays foreign experts for their works in Vietnam or holding managerial positions in Vietnam under labor contracts signed, the rent for houses for such foreign experts must not be deducted.

If the foreign experts are still employees of an overseas enterprise, receive wages and benefits from the overseas enterprise over the period of work in Vietnam, and the overseas enterprise and the taxpayer in Vietnam is signs a contract specifying that the taxpayer in Vietnam must cover the costs of accommodation for the foreign experts while they are working in Vietnam, then the VAT on the accommodation costs paid by the taxpayer shall be deducted.

The taxpayer that sells both goods/services that are subject to VAT and goods/services that are not subject to VAT may temporarily deduct all of the VAT on purchased goods, services, and fixed assets incurred in the month/quarter. At the end of the year, the taxpayer shall determine the actual deductible input VAT in the year and adjust the amount of input VAT deducted during the year.

With regard to fixed assets being cars with fewer than 9 seats (except for cars used for cargo transport, passenger transport, tourism, or hotel operation; cars used for display and test drive by car dealers) whose value is VND 1.6 billion or more (exclusive of VAT), the input VAT amount in proportion to the amount in excess of VND 1.6 billion shall not be deducted.

4. Some cases of VAT deduction:

a) If the taxpayer has a closed production line where the products not subject to VAT are used for producing goods subject to VAT, input VAT shall be deducted in full.

Example 58: Enterprise X invests in raw materials and a factory to fillet tra fish and river catfish and produce frozen shrimps for export. Enterprise X has a closed production line, including the breeding line, ponds, fences, irrigation system, boats, and other raw materials such as feeds, veterinary medicines, and the processing line. Enterprise X may deduct input VAT on fixed assets and purchases that are not fixed assets during the manufacture and processing.

- Enterprise A may deduct the whole input VAT on fixed assets and purchased goods/services that are not fixed assets serving the preparation of tra fish fillet preprocessing.

- Exported fillets of tra fish raised by enterprise A shall apply 0% tax. The enterprise may deduct input VAT on export of tra fish fillets in full. If the enterprise raise tra fish and then process them into tra fish fillets for export and domestic sale, the input VAT shall be proportional to the ratio of export revenue to the total revenue (revenue from export and revenue from domestic sale).

Example 59: Enterprise Y invests in raw materials and a factory to produce and process dairy (sterilized milk, yogurt, cheese, etc.). Enterprise Y has a closed production line, including the breeding line, farms, stables, fences, milking devices, sanitation system, raw materials such as feeds and veterinary medicine, and the processing line. Enterprise Y may deduct input VAT on fixed assets and purchases that are not fixed assets during the manufacture and processing.

b) If the taxpayer has a project of investment that is divided into multiple stages, has a closed production line, and uses non-taxable products to manufacture taxable goods, but non-taxable goods and services are provided during infrastructural development stage, the input VAT incurred during the infrastructural development stage in fixed assets may be deducted in full. The taxpayer must separate the VAT on the assets other than those serving manufacture of and trading in non-taxable goods and services to deduct tax according to the ratio of taxable revenue to total revenue from selling goods and services.

If the taxpayer makes a commitment to keep producing taxable products, VAT may be deducted during infrastructural development stage.  If the input VAT incurred during the infrastructural development stage has been declared, deducted, and refund, but then found to be not eligible for deduction or refund, the taxpayer must make an adjustment and pay tax that has been deducted or refunded. If the taxpayer fails to make the adjustment, tax authority shall collect the tax arrears and impose penalties as prescribed. The taxpayer is totally responsible to the law for the report and explanation for the tax deduction and tax refund, which are submitted to tax authority.

If the taxpayer sells unprocessed or preprocessed agricultural, forestry and aquaculture products that are not subject to VAT, the VAT on purchases may also be deducted according to the ratio of revenue from selling taxable goods and services to the total revenue.

Enterprise A has project on investment in a rubber plantation and incurs input VAT during infrastructural development stage. Enterprise A does not have raw materials to manufacture taxable products (including the unprocessed products or processed products that are subject to VAT) but have a project to build a factory to treat rubber latex into products subject to VAT) and declares to keep using the farming products to manufacture taxable products. Enterprise A may deduct the input VAT in full.

If enterprise X sells all of the rubber latex, which is not subject to VAT, the input tax shall not be deducted.

If the enterprise uses part of the rubber latex for manufacturing taxable products, and sell the rest, the input VAT shall be deducted as follows:

- Input VAT on fixed assets (rubber tree plantation, processing factory, etc.) may be deducted in full (including VAT incurred during infrastructural development stage).

- Input VAT on goods and services shall be deducted according to the ratio of revenue from selling taxable goods and services to the total revenue.

c) The taxpayers (including the new business establishments) that provide both goods and services subject to VAT and goods and services that are not subject to VAT may provisionally deduct input VAT on fixed assets incurred during infrastructural development stage according to the ratio of revenue from selling goods and services subject to VAT to the total revenue. The provisionally deducted VAT shall be adjusted to the ratio of revenue from selling goods and services subject to VAT to the total revenue over three years from the first year in which revenue is earned.

Example 61: Z is a new enterprise derived from a project on investment in transport. According to the business plan, company Z is supposed to earn revenue from public passenger transport, advertising, vehicle maintenance and repair. The revenue from passenger transport by bus accounts for 30% of the total revenue. The infrastructural development stage lasts for 02 years (from June 2014 to May 2016), including buying vehicles, building bus stops and infrastructure. During this period, 70% of the input VAT on fixed assets and purchases serving the creation of the company is provisionally deducted and refunded (VAT on the vehicles used as public buses is not deducted). Enterprise Z is inaugurated and starts earning revenue from June 2016. Three years later, at the end of May 2019, the revenue from public passenger transport by bus makes up 35% of total revenue from goods and services. Enterprise Z shall reduce the deductible VAT by 5% (= 70% - 65%) and aggregate the arrears with the VAT payable in May 2019. The enterprise shall not incur any fine or late payment interest.

5. Input VAT on the goods (whether purchased externally or produced by the taxpayer) used as gifts, used for sale promotions or advertising serving the manufacture of sale of taxable goods may be deducted.

6. The VAT paid under a decision on tax imposition made by a customs authority shall be deducted in full, unless penalties for tax fraud or avoidance are imposed by the customs authority.

7. Input VAT on goods and services serving the manufacture or sale of taxable goods and services mentioned in Article 4 of this Circular must not be deducted, except for the following cases:

a) VAT on purchased goods and services serving the provision of goods and services for the foreign entities that use them as humanitarian aid or non-refundable aid according to Clause 19 Article 4 of this Circular shall be deducted in full;

b) Input VAT on goods and services serving petroleum exploration shall be deducted in full until the first day of extraction.

8. VAT shall be declared and deducted in the period during which it is incurred, whether the products are used or still in storage.

If the taxpayer finds that the input VAT is incorrectly declared, an adjustment may be made before the tax authority or a competent authority announces the decision on tax inspection at the taxpayer’s premises.

9. Input VAT that is not deductible shall be aggregated with costs to calculate corporate income tax, or aggregated with costs of fixed assets, except for the VAT on any purchase that costs VND 20 million or more without receipts for non-cash payments.

10. The headquarters that do not directly run the business, the administrative units affiliated to hospitals, medical stations, sanitariums, institutes, schools, etc. that are not taxpayers must not deduct or claim refund of input VAT on the purchases serving their operation.

If such units sell taxable goods and services, VAT on these goods and services shall be separately declared and paid.

Example 62: Though the headquarter of company A does not directly run the business and is funded by its affiliates, it leases out part of its office building. In this case, the headquarter must separately declare and pay tax on the office lease. Input VAT on goods and services serving the operation of the headquarter shall not be deducted or refunded.

11. Input VAT of goods and services serving provision of goods and services that are not subject to VAT mentioned in Article 5 of this Circular (except for Clause 2 and Clause 3 of Article 5) may be deducted in full.

12. When the taxpayer authorizes another entity to make a purchase, the invoice for which bears the name of the authorized buyer, input VAT on such purchase may be deducted in the following cases:

a) An insurer authorizes the policyholder to have the policyholder’s assets repaired (invoices for the repair cost and parts bear the name of the policyholder), then pays the policyholder for the invoices under the insurance contract. In this case the insurer may deduct VAT on such invoices. If the amount paid to the policyholder is VND 20 million or above, it must be made by bank transfer.

b) Before an enterprise is established, its founders authorize another entity in writing to pay on their behalf some amounts related to the establishment of the enterprise and purchase some goods, the enterprise may deduct input VAT according to the invoices bearing the name of the authorized entity. The invoices of which the value is VND 20 million or more must be paid by bank transfer.

13. When a non-business entity contributes assets to a limited liability company or a joint-stock company, the receipt for this contribution is the certificate of capital contribution and the asset transfer note. If the contributed assets are brand new, have legitimate invoices, and are accepted by the capital transfer council, the value of this contribution is the VAT-inclusive value written on the invoice. The recipient of the contribution may deduct the VAT on the invoice for the purchase of such assets from the contributor.

14. The taxpayer that switches over from direct method to credit-invoice method may start deducting VAT on purchases from the first tax period in which credit-invoice method is applied.

The taxpayer that switches over from credit-invoice method to direct method may aggregate the VAT on purchases that is not completely deducted before switching with deductible expenses when calculating the income subject to corporate income tax, except for the refundable VAT on the purchases that were made before switching according to Article 18 of this Circular and the legislative documents that were effective before this Circular comes into force.

Example 63: Company A is applying credit-invoice method in 2014 and 2015. From January 01, 2016, company A is no longer eligible to apply credit-invoice method. Company A sent a claim for tax refund the tax authority from November 2014 to the end of October 2015 (when revenue is calculated to decide the tax accounting method in 2016 and 2017). The claimed refund is VND 350 million and the input VAT that remains is VND 50 million according to the VAT declaration of November 2015. Company A shall receive the full refund of VND 350 million. The remaining input VAT of VND 50 million shall be transferred to the tax period of December 2015. If input VAT on the VAT declaration of December 2016 is not completely deducted, company A may aggregate it with deductible expenses when calculating the income subject to corporate income tax.

15. Input VAT must not be deducted in the following cases:

- The VAT invoice is not legitimate, such as VAT is not written (except for special invoices on which selling prices are VAT-inclusive);

- The invoice does not contain or does not contain the correct name, address or TIN of the seller, thus rendering the seller unidentifiable;

- The name, address, or tax code of the buyer on the invoice is incorrect (except for the case in Clause 12 of this Article);

- The VAT invoice or the receipt for VAT payment is fake; the invoice is changed or fictitious (made without actual sale);

- The invoice does not reflect the actual value of goods and services.

16. Other cases prescribed by the Ministry of Finance.

1. Legitimate VAT invoices for purchases or receipts for payment of VAT on imported goods, or receipts for payment of VAT on behalf of foreign organizations that do not have Vietnamese legal status and the organizations and individuals, and the foreigners that do business or earn income in Vietnam.

2. Proofs non-cash payments for the purchases (including imported goods) that cost VND 20 million or more, except for the imports that cost below VND 20 million each, purchases that cost below VND 20 million inclusive of VAT, and imports being gifts, donations from overseas entities.

Receipts for non-cash payments include bank transfer receipts and other receipts for non-cash payments prescribed in Clause 3 and Clause 4 of this Article.

a) Proofs of the buyer's payment to the seller's account or proofs of payments in the manners that are not conformable with applicable regulations of law are not eligible for deduction and refund of VAN on purposes that cost VND 20 million or more.

b) Any purchase that costs VND 20 million or more (VAT-inclusive) shall not be deducted if there is no bank transfer receipt.

c) With regard to goods purchased under a deferred payment plan or installment plan that cost VND 20 million or more, the taxpayer shall declare and deduct input VAT according to the sale contracts, VAT invoices, and bank transfer receipt. If the bank transfer receipt is not available before the payment deadline according to the contract, the taxpayer may still deduct input VAT.

Where the taxpayer does not have bank transfer receipts when making payments, the taxpayer shall declare a reduction of deducted input VAT on the value of goods/services without bank transfer receipts in the tax period during which the cash payment is made (even if the tax authority and competent authorities have decided an inspection of the tax period in which VAT is declared and deducted.

4. Other cases in which non-cash payments are used for deducting input VAT:

a) If goods and services are purchased by offsetting their value against the value of sold goods and services, or by lending goods under contracts, a certification of this kind of transaction and data comparison record made by both parties is compulsory. If the payment is offset against third party’s debt, a debt offsetting record made by all three parties is compulsory.

b) If the contract allows goods and services to be purchased on credit in the forms of loans or debt offsetting via a third party, it is required to have the loan contract and the receipts for transfer of money from the creditor’s account to the debtor’s account, even when the value of purchased goods and services is offset against the amount paid by the buyer on behalf of the seller or the amount provided for the buyer by the seller.

c) If a third party is authorized to receive the payment for purchases by bank transfer (including the case in which the seller requests the buyer to wire the payment to a third party appointed by the seller), this authorization must be agreed in the contract, and the third party must be a lawful legal person or natural person.

After the payment is made this way, if the remaining value that is paid in cash is VND 20 million or more, tax shall only be deducted if bank transfer receipts are presented.

d) If payment for purchases is wired to a third party’s account at a State Treasury, which is opened to enforce money collection, input VAT may be deducted.

Example 68:

Company A buys goods of company B and still owes money to company B. However, company B still owes tax to government budget. According to the Law on Tax Administration, when the tax authority collects company B’s money and assets that are held by company A to enforce tax decision, the money transferred by company A to the account at the State Treasury is considered bank transfer, and the corresponding VAT on purchased goods may be deducted.

Example 69:

Company C signs a business contract to provide goods with company D, and company D still owes company C for the goods.

A competent authority decides to collect the money owed to company C by company D and transfer it to an account at a State Treasury to resolve disputes over sale contracts between company C and its partners.

When company D transfers money the account at the State Treasury (this transfer is not stipulated in the contract between company C and company D), the transfer is also considered bank transfer and the corresponding VAT on purchased goods may be deducted.

5. When the total value of multiple purchases, each of which costs below VND 20 million, that are made in the same day is VND 20 million or more, tax shall only be deducted if bank transfer receipts are presented. The supplier is a taxpayer that has a TIN and pay VAT directly.

In case the taxpayer has financially dependent stores that use the same TIN and invoice form, if the invoice shall have the text "Cửa hàng số:" ("Store No.") to differentiate the taxpayer's stores and bears the seal of each store, then each store shall be considered a supplier.

Article 16. Conditions for deducting and refunding input VAT on exported goods and services

VAT on exported goods and services (except for the cases in Article 17 of this Circular) shall only be deducted and refunded when the documents mentioned in Clause 2 Article 9 and Clause 1 Article 15 of this Circular are presented. To be specific:

1. The contract to sell, process goods, or provide services for a foreign entity.  If the exported is entrusted, the compulsory documents are the entrustment contract and the note of entrustment contract finalization or a debt comparison note between the entrusting party and the entrusted party, specifying the quantity, categories, value of exported goods, the export contract number; the date and amount of money on the bank transfer receipt for the payment between the foreign party and the entrusted party, the date and amount of money on the receipt for payment to the entrusting party by the entrusted party, number and date of the customs declaration of exported goods made by the entrusted party.

2. If customs procedure has been completed in accordance with instructions of the Ministry of Finance: the customs declaration.

If the taxpayer exports software programs in the form of physical packages, the customs declaration must be made similarly to ordinary goods in order to deduct input VAT.

The customs declaration is not needed in the following cases:

- The software and export exported via electronic means. The taxpayer must follow the procedure for certifying that the buyer has received the exported services or software via electronic means in accordance with the laws on electronic commerce.

- The construction or installation executed overseas or in free trade zones.

- Supply of electricity, water, stationery, and goods serving everyday life of export processing company, including food and consumables (including personal protective equipment such as clothes, hats, shoes, boots and gloves).

3. Payment for exported goods and services must be made by bank transfer

a) Bank transfer means the transfer of money from the importer’s account to the exporter's account at banks in accordance with the contract and regulations of the banks. Payment receipts are credit notes of the exporter’s bank regarding the amount transferred from the importer’s account. If the payment is deferred, the agreement on deferred payment must be included in the export contract.  When the payment is due, the taxpayer must obtain the bank transfer receipt.  If the export is entrusted, it is required to have a bank transfer receipt issued by the foreign party to the entrusted party, and the entrusted party must pay by bank transfer for the exported goods to the entrusting party. If the foreign party directly pays the exporting party, the exporting party must have the bank transfer receipt and this payment must be stipulated in the contract.

b) The cases below are also considered bank transfer:

b.1) When the payment for exported goods and services is offset against a debt to a foreign entity, the following documents are compulsory:

- A loan contract (if the loan is due within 01 year); or certification of loan issued by the State Bank of Vietnam (if the loan is due after 01 year).

- Receipt of bank transfer from abroad to Vietnam.

The export contract must allow the payment to be offset against the debt to a foreign entity.

- A certification of the debt offsetting made by the foreign entity.

- After offsetting, the remaining amount must be paid by bank transfer. The bank transfer receipts must be conformable with this Point.

b.2) When the payment for exported goods and services is offset against a debt to a foreign entity, the following documents are compulsory:

- Capital contribution contract.

- An export contract that allows payment for exported goods and services to be used as capital contribution to an overseas importer.

- If the capital contribution is smaller than the revenue from exported goods, the difference must be paid by bank transfer in accordance with this Point.

b.3) If the foreign party authorizes a third party, which is a foreign entity, to makes the payment, such authorization must be agreed in the export contract (or the contract appendix or amendment).

b.4) It is considered a bank transfer if the foreign party requests a third party that is an organization in Vietnam to offset the payment against a debt to the foreign party by paying the amount payable to the exporter by bank transfer (provided the offsetting is agreed in the export contract, contract appendix or amendment); the bank of the exporter issues a credit note to certify the amount transferred from the third party’s account; and the exporter presents a debt comparison certified by the foreign party and the third party.

b.5) If the foreign party (importer) authorizes an overseas entity (third party) to make the payment, then the third party requests an organization in Vietnam (fourth party) to offset the debt to the third party by paying the amount payable to the Vietnamese exporter by bank transfer, the following documents are compulsory:

- The export contract (contract appendix or amendment) that contains the agreement on debt offsetting.

- The credit note issued by the bank, which acts as a payment receipt for the amount received by the Vietnamese exporter from the fourth party’s account.

- A debt comparison certified by relevant parties (between the exporter and importer, between the third party and the fourth party).

b.6) If the foreign party authorizes its representative office in Vietnam to transfer the payment to the exporter’s account, such authorization is agreed in the export contract, contract appendix, or amendments (if any).

b.7)32 If the foreign party (not applied to individuals) transfers the payment from a deposit account opened by the foreign party at a credit institution in Vietnam, this method of payment must be agreed in the export contract, the contract appendix or its amendment. The payment receipt is the credit note issued by the exporter’s bank about the amount received from the foreign buyer’s account who signs the contract.

If the importer is a foreign private company and the payment via the current account of the private company owner that is opened at a credit institution in Vietnam is agreed in the export contract (or contract appendix, amendment), this payment is considered bank transfer.

When checking the deduction and refund of tax on exported goods that are paid for via the bank account, the tax authority must cooperate with the credit institution where the account is opened to ensure that the payment and transfer is made for intended purposes and in accordance with law. Any person who brings money across the border upon entry must declare that such money is for making payment for each particular sale contract and export declaration, and present the sale contracts and export declaration for customs officials to check and compare. In case the entering person is not a representative of the foreign company that directly signs the sale contract with the Vietnamese company, it is required to have a power of attorney (in English or translated into Vietnam together with the original version in the language of an adjacent country) made by the foreign entity that signs such sale contract. This power of attorney is only warrants one time of bringing money into Vietnam and the amount of money under the sale contract must be specified thereon.

b.8) In case the foreign party makes the payment by bank transfer but the amount on the receipt does not match the amount payable under the contract:

- If the amount on the bank transfer receipt is smaller than the amount payable under the contract, the taxpayer must provide explanation such as transferring fee, price reduction due to insufficient quality or quantity (a written agreement between the buyer and the seller must be made in this case), etc.;

- If the amount on the bank transfer receipt is larger than the amount payable under the contract, the taxpayer must provide explanation such as payment for multiple contracts, advance payment, etc.

The taxpayer is responsible for the explanation provided and the amendments (if any).

b.9) In case the foreign party makes the payment by bank transfer but name of the bank on the bank transfer receipt does not match that in the contract, it shall be considered legitimate if its contents indicate the names of the payer, the recipient, the number of the export contract, the amount payable that are consistent with the concluded export contract.

b.10) The taxpayer exports goods and services to a foreign party (second party), imports goods and services from another foreign party or buys goods from an entity in Vietnam (third party). If the taxpayer reaches an agreement with the second party and third party that the second party will pay the third party by bank transfer the amount the taxpayer is supposed to pay to the third party , this agreement must be specified in the export contract, import contract, or sale contract (or its appendix or amendment). The taxpayer must present the debt comparison certified by relevant parties (between the taxpayer and the second party, between the taxpayer and the third party).

b.11) In case the foreign party refuses the exported goods for legitimate reasons, and the taxpayer finds another buyer in the same country, the application for tax refund consists of every export document related to the export contract with the initial buyer (contract, customs declaration, invoices), a written explanation for the difference in the buyer’s name, and every export document related to the new buyer (contract, invoices, bank transfer receipt, and other necessary documents).

c) Other cases of payment for exported goods and services prescribed by the government:

c.1) If the labor export company directly collects money from the workers, it is required to have receipts for such payments.

c.2) When goods are exported to be sold at a fair or exhibition overseas, and the revenue is remitted to Vietnam in foreign currency, the taxpayer must declares the revenue in foreign currency collected from selling goods overseas and the receipts for remittance to a bank in Vietnam.

c.3) When goods or services are exported to repay government debt, it is required to have a certification by a foreign trade bank that the exported goods has been accepted by the foreign party as repayment, or that the dossier has been sent to the foreign party. Payment receipts must comply with instructions of the Ministry of Finance.

c.4) Exported goods/services shall be paid in kind when the export is paid by offsetting the value of exported goods/services or payment for processing against the value of goods/services purchased from the foreign party.

In this case, the following documents are compulsory:

- An export contract that contains the agreement on payment in kind.

- A contract to buy goods/services from the foreign party.

- A customs declaration of imported goods being offset against exported goods/services.

- A certification of the value of exported goods/services being offset against the value of imported goods/services.

- After offsetting, the difference must be paid by bank transfer. Bank transfer receipts must comply with this Clause.

c.5) The export of goods to bordering countries under the Prime Minister’s regulations on administration of border trading must comply with the instructions of the Ministry of Finance and the State Bank.

c.6) Some cases of goods and services using other methods of payments prescribed by relevant laws.

d) In the following cases, tax shall be deducted and refunded without bank transfer receipts:

d.1) If the foreign party defaults on the payment, the exporter must make a written explanation and use one of the following documents as a substitute for the bank transfer receipt:

- A customs declaration of goods imported from Vietnam, which have been registered with the customs authority of the importing country (01 copy); or

- A petition sent to a court or competent authority of the buyer’s home country enclosed with a notification or certification of the receipt of this petition by the court or the competent authority (01 copy); or

- A court’s ruling that the taxpayer wins the case (01 copy); or

- Papers of foreign competent authorities certifying or notifying that the foreign party has gone bankrupt or insolvent (01 copy).

d.2) If exported goods must be destroyed due to their inferior quality, the exporter must submit a written explanation and may use the destruction record (or a paper certifying the destruction) issued by the agency in charge of the destruction (01 copy) enclosed with a bank transfer receipt for the destruction cost payable by the exporter, or enclosed with the paper proving that the destruction cost is covered by the buyer or a third party (01 copy).

If the importer is follows the procedure for goods destruction overseas, the destruction record (or a paper certifying the destruction) shall bear the importer's name.

d.3) If the exported goods is damaged, the exporter must make a written explanation and use one of the following documents as a substitute for the wire transfer receipt:

- A certification by a competent authority that the damage is incurred beyond Vietnam’s boundary (01 copy); or

- A record certifying that goods is damage in transit beyond Vietnam’s boundary (01 copy).

If the exporter has received a compensation for the damaged goods, a bank transfer receipt for the compensation must be enclosed (01 copy).

Copies of the papers mentioned in Points d.1, d.2 and d.3 of this Clause must be authenticated by the exporter.  01 notarized translation must be enclosed if the language of the substitute for the bank transfer receipt is not English. The electronic documents must be printed.

The exporter is responsible for the accuracy of the substitutes for the wire transfer receipt mentioned above.

Article 17. Conditions for deduction and refund of input VAT in some cases of deemed export

1. Compulsory documents for forwarded processed goods defined by the laws on international trade and export processing:

a) Export processing contract and its appendices (if any), specifying the recipient of goods in Vietnam.

b) VAT invoices specifying the processing price and the quantity of processed goods (under the contract signed with the foreign party), and name of the recipient appointed by the foreign party.

c) A forwarding note certified by the sender, the recipient, and the customs authority that monitors the processing contract.

d) Payment for processed goods must be made by bank transfer in accordance with Article 16 of this Circular.

The procedure for forwarding processed products and forwarding note must comply with instructions of the General Department of Customs.

Example 70: Company A signs a contract to process 200,000 pairs of shoe soles. The payment for processing is VND 800 million. The contract specifies that soles will be sent to company B in Vietnam to produce complete shoes.

In this case, Company A is a forwarding processor of goods for export. When sending the soles to company B, company A must specify the quantity, category, and specifications of the products. The VND 800 million in revenue from processing the soles is eligible for 0% VAT.

2. Compulsory documents for domestic exports:

a) A sale contract or a processing contract requiring goods to be delivered to a recipient in Vietnam;

b) A customs declaration of domestic exports has gone through customs procedure;

c) A VAT invoice or export invoice specifying the buyer’s name, recipient, and delivery address in Vietnam;

d) The goods sold to foreign traders and delivered to a location in Vietnam must be paid with convertible foreign currencies by bank transfer. Wire transfer receipts must comply with this Clause 3 Article 16 of this Circular. If the appointed recipient is authorized by the foreign party to pay the exporter, the currency used for payment must comply with the regulations of law on foreign exchange.

dd) The goods for in-country export of a foreign-invested company must be conformable with the investment license.

3. When goods and supplies are exported by a Vietnamese company to execute a construction overseas, the Vietnamese company must provide the following documents to deduct or receive VAT refund:

a) The customs declaration in accordance with Clause 2 Article 16 of this Circular.

b) The exported goods must be consistent with the manifest of exported goods serving the execution of overseas construction, which is approved by the Director of the Vietnamese enterprise.

c) An export entrustment contract (if the export is entrusted).

4. When goods and supplies are sold by one Vietnamese company to another to execute a construction overseas and are received overseas, the Vietnamese company must provide the following documents to deduct or receive refund of VAT on exported goods:

a) The customs declaration in accordance with Clause 2 Article 16 of this Circular.

b) The exported goods must be consistent with the manifest of exported goods serving the execution of overseas construction, which is approved by the Director of the Vietnamese enterprise.

c) A sale contract between two Vietnamese companies specifying the delivery terms, the quantity, category and value of goods.

d) An export entrustment contract (if the export is entrusted).

dd) Bank transfer receipts.

e) VAT invoices for the goods.

If the holder of exported goods or goods deemed exports according to Article 16 and Article 17 of this Circular has obtained a certification from the customs authority but does not have one of the other documents, output VAT shall not be incurred but input VAT shall not be deducted. If any of the compulsory documents for forwarded processed goods and goods for in-country export is missing, VAT shall be paid as if they are sold domestically.  If the regulations on bank transfer are not complied with or the payments are not considered bank transfer, the taxpayer shall not be eligible for 0% VAT, shall not incur output VAT, but must not deduct input VAT.

Section 2. TAX REFUND

1. The monthly or quarterly amount of input VAT which has not been fully deducted from the VAT paid by a taxpayer adopting the invoice credit method in the period shall be deducted from the VAT incurred in the subsequent period.

If a business taxpayer’s VAT is not fully deducted before the tax period of July 2016 (if tax is declared monthly) or of the 3rd quarter of 2016 (if tax is declared quarterly) but that taxpayer is eligible for VAT refund as per Clause 1 Article 18 of the Circular No. 219/2013/TT-BTC, tax authorities shall refund the tax as per the laws.

Example: Enterprise A declares VAT on quarterly basis. In the tax period of the 3rd quarter in 2016, its remaining deductible VAT is VND 80 million. It may be deducted from the VAT incurred in the 4th quarter of 2016. If the tax deductible is not fully deducted in the 4th quarter of 2016, the 1st quarter and the 2nd quarter of 2017, enterprise A may deduct it from the VAT incurred in the 3rd quarter of 2017 and in subsequent tax periods.

2. The refund of VAT on annual goods and services used for investment activities, except circumstances defined in Point c Clause 3 of the Article, shall be applicable to a registered business which has recently been incorporated under an investment project and registered to pay VAT by invoice credit method, or an oil well exploration and development project undergoing the investment phase in at least 1 year and has yet progressed to operation. If the accumulated value added tax (VAT) on services and goods purchased for investment activities is VND 300 million or higher, the VAT shall be refundable.

3. Refund of VAT for investment projects

a) An active taxpayer which pays VAT by the invoice credit method shall separately declare input VAT on its investment projects currently under the investment phase in the same province where it is based (except the circumstances defined in Point c Clause 3 of this Article and except investment projects on construction of houses for sale or rent but without constituting any fixed assets) from the VAT on its ongoing business activities. The maximum deductible VAT from the investment projects is equal to the VAT payable on business activities in the period..

If the remaining deductible VAT is VND 300 million or more, it shall be refunded.

If the remaining deductible VAT is less than VND 300 million, it shall be carried forward to the next tax period of the project.

Example: Company A's headquarter is based in Hanoi. In July 2016, it started an investment project in Hanoi which currently undergoes the investment phase. Company A declares input VAT on such project separately.. In August 2016, input VAT on the project is VND 500 million. VAT on the company’s ongoing business activities is VND 900 million. Company A shall deduct the investment project's input VAT of VND 500 million from that on its business activities in progress (VND 900 million); thus, VAT payable by Company A in the tax period of August 2016 is VND 400 million.

Example: Company B's headquarter is based in Hai Phong. In July 2016, it commenced an investment project which currently undergoes the investment phase in Hai Phong. Company B declares input VAT on such project separately. In August 2016, input VAT on the project is VND 500 million. VAT on the company’s ongoing business activities is VND 200 million. Company B shall deduct VND 200 million from the investment project’s input VAT from that on the business activities in progress (VND 200 million). Therefore, 300 million VND in input VAT on the new project remains in the tax period of August 2016 after deduction. In this case, Enterprise B may claim a VAT refund.

Example: Company C’s headquarter is based in Ho Chi Minh city. In July 2016, it initiated an investment project in Ho Chi Minh city which currently undergoes the investment phase in Ho Chi Minh city. Company C declares input VAT on such project separately. In August 2016, input VAT on the project is VND 500 million. VAT on the company’s ongoing business activities is VND 300 million. Company C shall deduct VND 300 million from the investment project’s input VAT from that on the business activities in progress (VND 300 million). Therefore, 200 million VND in input VAT on the new project remains in the tax period of August 2016 after deduction. In this case, this amount of VAT shall not be refunded. Instead, company C shall aggregate 200 million VND with the input VAT on the project in September 2016.

Example: Company D’s headquarter is based in Danang city. In July 2016, it initiated an investment project in Ho Chi Minh city which currently undergoes the investment phase in Ho Chi Minh city. Company D declares input VAT on such project separately. In August 2016, input VAT on the project is VND 500 million. VAT on the enterprise’s ongoing business activities that remains after deduction is VND 100 million. In the tax period of August 2016, therefore, input VAT on the investment project (VND 500 million) may be refunded while the VAT on the company D’s ongoing business activities that remains after deduction (VND 100 million) shall be carried forward to the tax period of September 2016.

b) An active taxpayer which pays VAT by the invoice credit method shall declare, by separate documentation, and offset input VAT on its new investment projects which are under investment and have not applied for neither business nor tax registration in a province different from the location of its head office (except the circumstances defined in Point c Clause 3 of this Article and except investment projects on construction of houses for sale or rent without constitution of fixed assets) against the declared VAT on its ongoing business activities. The maximum VAT deductible from the investment projects is equal to the VAT payable on business activities in the period.

VAT on a new investment project shall be refunded if the remaining deductible input VAT on such project is VND 300 million or more.

If the remaining deductible input VAT is less than VND 300 million, it shall be carried forward to the next period.

If the taxpayer decides to establish project management boards or branches in provinces other than the province where its headquarter bases in to manage one or more projects on its behalf, such project management boards or branches shall submit their own tax declarations and refund claims to local tax authorities with which tax registration is applied provided they have their own legitimate official seals, maintain their own records according to accounting regulations, have bank accounts, have registered for tax and have obtained their own taxpayer identification numbers. When the project, from which the new enterprise derives, is completed and the procedure for business registration and tax registration is completed, the taxpayer who is the investor must aggregate the VAT incurred, the VAT refunded and not refunded, then request the new enterprise to declare and pay tax.

The investment project to which VAT is refunded according to Clause 2 and Clause 3 of this Article is an investment project defined in the law on investment.

Example: Company A's headquarter is based in Hanoi. In July 2016, it started an investment project in Hanoi which currently undergoes the investment phase and is not applied for neither business nor tax registration. Company A declares input VAT on this project in Hanoi using the VAT declaration form for investment projects. In August 2016, input VAT on the project is VND 500 million. VAT on the company’s ongoing business activities is VND 900 million. Company A shall deduct the investment project's input VAT of VND 500 million from that on its business activities in progress (VND 900 million); thus, VAT payable by Company A in the tax period of August 2016 is VND 400 million.

Example: Company B's headquarter is based in Hanoi. In July 2016, it started an investment project in Thai Binh which currently undergoes the investment phase and is not applied for neither business nor tax registration. Company B declares input VAT on this project in Hai Phong using the VAT declaration form for investment projects. In August 2016, input VAT on the project is VND 500 million. VAT on the company’s ongoing business activities is VND 200 million. Company B shall deduct the amount of VND 200 million from the investment project’s input VAT from that on the business activities in progress (VND 200 million). Therefore, 300 million VND in input VAT on the new project remains in the tax period of August 2016 after deduction. In this case, Company B may claim a VAT refund.

Example: Company C's headquarter is based in Ho Chi Minh City. In July 2016, it started an investment project in Dong Nai which currently undergoes the investment phase and is not applied for neither business nor tax registration. Company C declares input VAT on this project in Ho Chi Minh City using the VAT declaration form for investment projects. In August 2016, input VAT on the project is VND 500 million. VAT on the company’s ongoing business activities is VND 300 million. Company C shall deduct VND 300 million from the investment project’s input VAT from that on the business activities in progress (VND 300 million). Therefore, 200 million VND in input VAT on the new project still remains in the tax period of August 2016 after deduction. In this case, this amount of VAT shall not be refunded. Instead, company C shall aggregate 200 million VND with the input VAT on the project in September 2016.

Example: Company D’s headquarter is based in Hanoi. In July 2016, it started an investment project in Quang Nam which currently undergoes the investment phase and is not applied for neither business nor tax registration. Company D declares input VAT on this project in Danang City using the VAT declaration form for investment projects. In August 2016, input VAT on the project is VND 500 million. VAT on the enterprise’s ongoing business activities that remains after deduction is VND 100 million. In the tax period of August 2016, therefore, input VAT on the investment project (VND 500 million) may be refunded while the VAT on the company D’s ongoing business activities that remains after deduction (VND 100 million) shall be carried forward to the tax period of September 2016.

c) In the following events, a business shall not be eligible for a refund but can carry forward remaining deductible VAT on its investment project to the subsequent period:

c.1) The charter capital of the investment project of the business has not been fully contributed as registered as per the law. The business has submitted an application for refund of tax on its investment project since July 01, 2016 but the project’s registered charter capital was not fully contributed as per the law on the date of application.

c.2) An investment project is executed by a business conducting business in conditional business line(s) despite not satisfying business conditions as per the Investment Law; in other words, such investment project is run by a business establishment that engages in despite not being licensed to conduct business in conditional business line(s); by a business establishment that engages in despite not being certified qualified to conduct business in conditional business line(s); by a business establishment that engages in despite not being permitted by a competent authority to conduct business in conditional business line(s); or by a business establishment that engages in but does not meet conditions to conduct business in conditional business line(s) despite not being required by the law on investment to be permitted or certified thereof in writing.

c.3) An investment project is executed by a business establishment that conducts business in conditional business line(s) but fails to sustain business conditions during its operations; in other words, such investment projects are run by a business establishment that conducts business in conditional business line(s) but has its relevant license(s) revoked during its operations; by a business whose certificate(s) of eligibility to conduct business in conditional business line(s) is (are) revoked; by a business establishment that has the written permission revoked by a competent authority for conducting business in conditional business line(s); or by a business establishment that fails conditions to conduct business in conditional business line(s) as per the law on investment. In this event, the business shall be ineligible for the refund of VAT upon the revocation of one of the said documents or upon being exposed by competent government authorities as having failed conditions for conducting business in conditional business line(s).

c.4) The value of natural resources and/or minerals plus the energy cost of an investment project for extraction of natural resources and minerals which has been licensed since July 01, 2016 or an investment project on production of goods makes up 51% of its prime cost or above.

Natural resources and minerals, their value and valuation time, and the energy cost shall be determined according to Clause 23 Article 4 of the Circular.

a) In a month (if tax is declared monthly) or quarter (if tax is declared quarterly), if the input VAT on exported goods/services (including goods that are imported and subsequently exported to non-tariff areas and the goods that are imported and subsequently exported to other countries) of a business establishment remains at least VND 300 million after being offset against, it shall be refunded by month or quarter. If such input VAT is less than VND 300 million, it shall be offset against in the next month/quarter. r.

In a month/quarter, if a business establishment has both exported goods/services and goods/services sold domestically, input VAT on purchases used for manufacturing of exported goods/services shall be separately recorded. Otherwise, input VAT shall be determined according to the ratio of revenue from exported goods/services to total revenue from goods/services accrued from the tax period succeeding the period in which tax is refunded to the current period in which tax refund is claimed. If the input VAT on exported goods and services (including the input VAT separately recorded and the input VAT determined through the aforementioned ratio) remains at least VND 300 million after having been deducted from VAT on goods and services sold domestically, the business establishment shall receive a refund of VAT on exported goods and services. The refunded amount of VAT on exported goods and services shall not exceed the revenue from such exported goods and services multiplied by (x) 10%.

Certain cases of eligibility for tax refund upon exportation: The business establishment that has goods exported through entrustment; the business establishment that processes exports for foreign principals on a contract basis; the business establishment that has goods and materials exported for overseas construction works; and the business establishment whose exports are delivered to other domestic entities as requested by the importers.

b) VAT will not be refunded if the goods are imported and then exported outside a customs controlled area in accordance with regulations of law on customs or the goods are exported outside the customs control area in accordance with regulations of law on customs.

c) The tax authority shall grant a refund before inspection if the taxpayer who is a manufacturer of exports has not incurred any penalty for smuggling, illegal cross-border transport of goods, tax evasion, tax fraud, trade fraud for two consecutive years or the taxpayer does not pose a high risk according to the Law on Tax Administration and its instructional documents.

5. A business establishment that pays the value added tax by the invoice credit method shall receive a refund of overpaid VAT or of remaining deductible input VAT upon its transfer, conversion, merger, consolidation, full division, partial division, dissolution, bankruptcy or shutdown.

A business establishment that goes bankrupt, dissolve or shut down before being put into operation and has not incurred any output VAT on its primary trades in line with the investment projects shall not be required to revise the amount of VAT declared, deducted or refunded. Such business establishment must inform its supervisory tax authority of its dissolution, bankruptcy or shutdown as per regulations.

The refunded amount of VAT, upon a business establishment's completion of formalities as per the laws on dissolution or bankruptcy, shall be settled as per the laws on dissolution, bankruptcy and tax administration while the un-refunded amount of VAT shall not be refundable. If a business establishment shuts down and incurs no output VAT on its main business activities, it shall return the tax refund to the state budget. If VAT-levied assets are sold, the relevant input VAT on such assets shall not be subjected to adjustment.

Example: In 2015, Enterprise A, being under investment, did not initiate any business operation. The input VAT of VND 700 million which was incurred during its investment phase was refunded by tax authorities in August 2015. Enterprise A, in February 2016, decided to dissolve due to hardship. It informed tax authorities of its intent to dissolve. Prior to Enterprise A's completion of legal formalities for dissolution, tax authorities did not reclaim the VAT refund. Enterprise A, in twenty days before its fulfillment of legal formalities for official dissolution in October 2016, sold one (01) asset. Input VAT on such asset which was refunded was not subjected to adjustment. Enterprise A shall make out a declaration of refund VAT on the unsold assets and return such refund.

6. Projects and programs financed by grant ODA, grant aids or humanitarian aids shall be eligible for VAT refund.

a) For the projects financed by grant ODA: Project owners or main contractors or organizations that foreign sponsors designate to manage the projects shall receive a refund of VAT paid on goods and services acquired in Vietnam to serve the projects.

b) VAT paid on goods and services shall be refunded to Vietnam-based organizations spending foreign entities’ humanitarian aids on such goods and services for projects and programs that utilize grant aids and humanitarian aids.

Example: Red Cross was aided an amount of VND 200 million by an international organization to purchase humanitarian goods for the people in disaster-stricken provinces. The pre-tax worth of the goods was VND 200 million, plus an amount of VND 20 million in VAT. Red Cross shall receive a refund of VND 20 million as per regulations.

VAT paid on the projects and programs financed by grant ODA shall be refunded in accordance with the guidelines of the Ministry of Finance.

7. Entities granted diplomatic immunities and privileges as per relevant laws shall receive a refund of VAT paid, according to the VAT invoice or the receipt stating the VAT-included price, on the goods and services that they purchase in Vietnam for consumption.

8. Foreigners and Vietnamese expatriates holding passports or immigration papers issued by competent foreign authorities shall be receive refunds of tax on the goods that they purchase in Vietnam and carry upon departure. The refund of VAT shall be subject to the guidelines of the Ministry of Finance on VAT refund for the goods that foreigners and Vietnamese expatriates purchase in Vietnam and carry upon departure.

9. Tax refund for the businesses shall be at the discretion of competent authorities as per the laws and according to the cases of value added tax refund as defined in international treaties to which the Socialist Republic of Vietnam is a signatory.

Article 19. Conditions and procedure for VAT refund

1. To be eligible for tax refund according to Points 1 to 5 Article 18 of this Circular, the taxpayer must pay tax using credit-invoice method, be issued with a Certificate of Business registration or investment license or practice certificate, or a decision on establishment issued by a competent authority, have a legal seal, keep accounting records in accordance with accounting laws, and have deposit accounts at banks according to the taxpayer’s TIN.

2. Input VAT that has been claimed on the VAT declaration must not be aggregated with the deductible tax of the next month.

3. VAT shall be refunded in accordance with the procedures in the Law on Tax Administration and its guiding documents.

Article 20. Places to pay tax

1. Taxpayer shall declare and pay VAT in the locality where the business is situated.

2. If the taxpayer that declares and pays VAT using credit-invoice method has a financially dependent manufacturing facility in a province other than the province where the headquarter is situated, VAT shall be paid in both provinces.

3. If an enterprise or cooperative that uses direct method has a manufacturing facility in a province other than that where the headquarter is situated, or engages in extraprovincial sale, the enterprise or cooperative shall pay direct VAT on the revenue earned from extraprovincial sale in the province where the sale is made. The enterprise or cooperative is not required to pay direct VAT on such revenue, which has been declared at paid, at the headquarter.

4. When a provider of telecommunications services provides postpaid telecommunications services in a province other than the province where their headquarter is situated, and establish a financially dependent branch that pays VAT using credit-invoice method and also provides postpaid telecommunications services in that same province, the provider of telecommunications services shall declare and pay VAT on postpaid telecommunications services as follows:

- VAT on the total revenue from postpaid telecommunications services of the provide shall be declared at the supervisory tax authority of the headquarter.

- VAT shall be paid in the provinces where the headquarter and the branch are situated.

Direct VAT shall be paid at 2% of the revenue from telecommunications services provided in the province where the branch is situated (postpaid telecommunications services are subject to 10% tax)

5. VAT shall be declared and paid in accordance with the Law on Tax Administration and its guiding documents.

Chapter IV

IMPLEMENTATION

1. This Circular comes into force from January 01, 2014 and supersedes the Circular No. 06/2012/TT-BTC dated January 11, 2012 and the Circular No. 65/2013/TT-BTC dated May 17, 2013 of the Ministry of Finance.

2. Any taxpayer that declares VAT quarterly from July 01, 2013 shall receive VAT refund before the tax period of January 2014 (if tax is declared monthly) or before the first quarter of 2014 (if tax is declared quarterly) if input VAT is not completely deducted after 03 consecutive tax periods.

Example 85: Enterprise A declares tax monthly in May and June 2013, and starts declaring tax quarterly from the third quarter of 2013. If input VAT incurred in May 2013, June 2013, and the third quarter of 2013 is not completely deducted, company A will receive a refund of VAT at the end of the third quarter of 2013.

Example 86: Enterprise B declares tax monthly in June 2013 and starts declaring tax quarterly from the third quarter of 2013. If input VAT incurred in June 2013, and the third quarter of 2013 and the fourth quarter of 2013 is not completely deducted, enterprise B will receive a refund of VAT at the end of the fourth quarter of 2013.

3. Before January 2014 (if tax is declared monthly) or before the first quarter of 2014 (if tax is declared quarterly), any taxpayer that is eligible for tax refund according to the Circular No. 06/2012/TT-BTC dated January 11, 2012 and the Circular No. 65/2013/TT-BTC dated May 2013 of the Ministry of Finance shall receive a VAT refund.

At the end of December 2013 (if tax is declared monthly) or the fourth quarter of 2013 (if tax is declared quarterly), the input VAT that is not completely deducted after less than 03 consecutive tax periods in 2013 shall be transferred to 2014 to deduct and claim refund according to Clause 1 Article 18 of this Circular.

Example 87: VAT incurred by enterprise A is not completely deducted in October, November and December 2013. Thus, enterprise A shall receive a VAT refund according to Clause 1 Article 18 of the Circular No. 06/2012/TT-BTC dated January 11, 2012 of the Ministry of Finance.

Example 88: Enterprise B incurs VAT in October 2013. Input VAT is not completely deducted in only November 2013 and December 2013. At the end of December 2013, enterprise B is not eligible for tax refund according to the Circular No. 06/2012/TT-BTC. This remaining input VAT shall be transferred to 2014, during which tax refund will be considered, according to Clause 1 Article 18 of this Circular.

Article 89: Enterprise C incurs VAT in the third quarter of 2013. The input VAT that is not completely deducted in the fourth quarter of 2013 shall be transferred to 2014, during which tax refund will be considered, according to Clause 1 Article 18 of this Circular.

4. Every taxpayer shall deduct input VAT on fixed assets incurred before January 01, 2014 in accordance with the Circular No. 06/2012/TT-BTC dated January 11, 2012 and the Circular No. 65/2013/TT-BTC dated May 17, 2013 of the Ministry of Finance; the input VAT on fixed assets incurred from January 01, 2014 onwards shall be deducted in accordance with this Circular.

5. The input VAT on unprocessed or preprocessed farming, breeding, fishery products incurred before January 01, 2014 must be enumerated in the manifest of purchases on the VAT declaration of December 2013 or the fourth quarter of 2013.

Article 22. VAT collection

1. Tax authorities shall organize the collection of VAT and refund of VAT incurred by business establishments.

2. Customs authorities shall organize the collection of VAT on imported goods.

Difficulties that arise during the implementation of this Circular should be promptly reported to the Ministry of Finance for resolution./.

APPENDIX

RATES OF DIRECT VAT APPLIED TO VARIOUS BUSINESS LINES

1) Goods supply and distribution: 1%

- Wholesaling and retailing goods (except for goods sold by agents that earn commissions).

2) Services, construction exclusive of building materials: 5%

- Accommodation, hotel, motel services;

- Leases on houses, land, stores, workshops, assets, and other personal chattels;

- Leases on yards, machinery, vehicles; material handling, and other services related to transport such as parking, ticket selling;

- Postal services and mailing;

- Commissions for running agents, auction and brokerage services;

-  Legal counseling, audit, accounting, and financial counseling; tax brokerage and customs brokerage;

- Data processing services, lease on information portals, IT and telecommunications equipment;

- Office assistance services and other business assistance services;

- Steambath, massage, karaoke, nightclub, billards, Internet, and video game services;

- Tailoring, laundry services; hairdressing services;

- Other repair services including computer repair and domestic appliance repair;

- Infrastructural development consultancy, design, and supervision services;

- Other services;

- Construction and installation exclusive of building materials (including installation of industrial machinery and equipment).

3) Manufacturing, transport, services attached to goods, construction inclusive of building materials: 3%

- Manufacturing and processing products and goods;

- Mineral mining and processing;

- Cargo and passenger transport;

- Services attached to goods such as training, maintenance, technology transfers attached to goods sale;

- Food and drink services;

- Repair and maintenance of machinery, equipment, means of transport, automobiles, motorcycles and other motor vehicles;

- Construction and installation inclusive of building materials (including installation of industrial machinery and equipment).

4) Other lines of business: 2%

- Production of products subject to 5% VAT under credit-invoice method;

- Provision of services subject to 5% VAT under credit-invoice method;

- Other lines of business not mentioned above.

This is the consolidated document of:- The Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance providing guidance on implementation of the Law on Value-added Tax and the Government's Decree No. 209/2013/ND-CP dated December 18, 2013 providing guidance on some Articles of the Law on Value-Added Tax, which has been effective since January 01, 2014;- The Circular No. 119/2014/TT-BTC dated August 25, 2014 of the Ministry of Finance on amendments to Circular No. 156/2013/TT-BTC dated November 06, 2013, Circular No. 111/2013/TT-BTC dated August 15, 2013, Circular No. 219/2013/TT-BTC dated December 31, 2013, Circular No. 08/2013/TT-BTC dated January 10, 2013, Circular No. 85/2011/TT-BTC dated June 17, 2011, Circular No. 39/2014/TT-BTC dated March 31, 2014 and Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance to simplify tax formalities, which has been effective since September 01, 2014;- The Circular No. 151/2014/TT-BTC dated October 10, 2014 providing guidelines for implementation of the Government's Decree No. 91/2014/ND-CP dated October 01, 2014 on amendments to tax decrees, which has been effective since November 15, 2014;- The Circular No. 26/2015/TT-BTC dated February 27, 2015 of the Ministry of Finance providing guidelines for value-added tax and tax administration in the Government's Decree No. 12/2015/ND-CP dated February 12, 2015 on guidelines for the Law on Amendments to Laws and Decrees on taxation, and amendments to Circular No. 39/2014/TT-BTC dated March 31, 2014 of the Ministry of Finance on invoices for goods sale and service provision, which has been effective since January 01, 2015;- The Circular No. 193/2015/TT-BTC dated November 24, 2015 of the Ministry of Finance amending and supplementing the Circular No. 219/2013/TT-BTC of the Ministry of Finance dated December 31, 2013 providing guidance on implementation of the Law on Value-added Tax and the Government's Decree No. 209/2013/ND-CP dated December 18, 2013 providing guidance on some Articles of the Law on Value-Added Tax, which has been effective since January 10, 2016;- The Circular No. 130/2016/TT-BTC dated August 12, 2016 of the Ministry of Finance on guidelines for the implementation of the Government’s Decree No. 100/2016/ND-CP dated July 01, 2016 on the implementation of the Law on Amendments to Certain Articles of the Law on Value Added Tax, the Law on Special Excise Tax and the Law on Tax Administration and to Certain Articles of Tax-related Circulars, which has been effective since July 01, 2016;- The Circular No. 173/2016/TT-BTC dated October 28, 2016 of the Ministry of Finance amending and supplementing the first paragraph of Clause 3 Article 15 of Circular No. 219/2013/TT-BTC dated December 31, 2013 by the Ministry of Finance (which was amended by Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 and Circular No. 26/2015/TT-BTC dated February 27, 2015 by the Ministry of Finance), which has been effective since December 15, 2016;- The Circular No. 93/2017/TT-BTC dated September 19, 2017 of the Ministry of Finance on amendments to Clause 3 and Clause 4 Article 12 of Circular No. 219/2013/TT-BTC dated December 31, 2013 (amended by the Circular No. 119/2014/TT-BTC dated August 25, 2014); abrogation of Clause 7 Article 11 of Circular No. 156/2013/TT-BTC dated November 06, 2013, which has been effective since November 05, 2017;- The Circular No. 25/2018/TT-BTC dated March 16, 2018 of the Ministry of Finance on guidelines for the Government’s Decree No. 146/2017/ND-CP dated December 12, 2017 on amendments to some articles of the Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance and Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance, which has been effective since May 01, 2018;- The Circular No. 82/2018/TT-BTC dated August 30, 2018 of the Ministry of Finance on repeal of Example 37 in Point a.4 Clause 10 Article 7 of the Circular No. 219/2013/TT-BTC of the Ministry of Finance dated December 31, 2013 providing guidance on implementation of the Law on Value-added Tax and the Government's Decree No. 209/2013/ND-CP dated December 18, 2013 providing guidance on some Articles of the Law on Value-Added Tax, which has been effective since October 15, 2018.This document does not replace the 10 abovementioned Circulars.

The Circular No. 119/2014/TT-BTC dated August 25, 2014 of the Ministry of Finance on amendments to Circular No. 156/2013/TT-BTC dated November 06, 2013, Circular No. 111/2013/TT-BTC dated August 15, 2013, Circular No. 219/2013/TT-BTC dated December 31, 2013, Circular No. 08/2013/TT-BTC dated January 10, 2013, Circular No. 85/2011/TT-BTC dated June 17, 2011, Circular No. 39/2014/TT-BTC dated March 31, 2014 and Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance to simplify tax formalities is promulgated pursuant to:“The Law on Tax Administration No. 78/2006/QH11 dated November 29, 2006 and Law on amendments to the Law on Tax Administration No. 21/2012/QH13 dated November 20, 2012;The Law on Value-added Tax No. 13/2008/QH12 dated June 03, 2008 and Law on amendments to the Law on Value-added Tax No. 31/2013/QH13 dated June 19, 2013;The Government’s Decree No. 83/2013/ND-CP dated July 22, 2013 on guidelines for implementation of the Law on Tax Administration and the Law on Amendments to the Law on Tax Administration;The Government’s Decree No. 209/2013/ND-CP dated December 18, 2013 on guidelines for implementation of the Law on Value-Added Tax;The Government’s Decree No. 51/2010/ND-CP dated May 14, 2010 on invoices for goods sale and service provision and the Decree No. 04/2014/ND-CP dated January 17, 2014 on amendments to the Decree No. 51/2010/ND-CP dated May 14, 2010;The Government’s Decree No. 218/2013/ND-CP dated December 26, 2013 on guidelines for implementation of the Law on Corporate Income Tax;The Government's Decree No. 215/2013/ND-CP dated December 23, 2013 defining the functions, tasks, powers and organizational structure of the Ministry of Finance;At the request of the Director of the General Department of Taxation,Reforming and simplifying administrative procedures related to tax, the Minister of Finance hereby provides guidelines for amendments to some contents as follows:”- The Circular No. 151/2014/TT-BTC dated October 01, 2014 providing guidelines for implementation of the Government's Decree No. 91/2014/ND-CP dated October 01, 2014 on amendments to tax decrees is promulgated pursuant to:“The Law on Tax Administration No. 78/2006/QH11 and Law No. 21/2012/QH13 on Amendments to the Law on Tax Administration;The Law on Personal Income Tax No. 04/2007/QH12 and Law No. 26/2012/QH13 on Amendments to the Law on Personal Income Tax;The Law on Value-added Tax No. 13/2008/QH12 dated June 03, 2008 and Law on Amendments to the Law on Value-added Tax;The Law on Corporate Income Tax No. 14/2008/QH12 and Law No. 32/2013/QH13 on amendments to the Law on Corporate Income Tax;The Government’s Decree No. 83/2013/ND-CP dated July 22, 2013 on guidelines for implementation of the Law on Tax Administration and the Law on Amendments to the Law on Tax Administration;The Government’s Decree No. 65/2013/ND-CP dated June 27, 2013 on guidelines for implementation of the Law on Personal Income Tax and the Law on Amendments to the Law on Personal Income Tax;The Government’s Decree No. 209/2013/ND-CP dated December 18, 2013 on guidelines for implementation of the Law on Value-Added Tax;The Government’s Decree No. 218/2013/ND-CP dated December 26, 2013 on guidelines for implementation of the Law on Corporate Income Tax;The Government’s Decree No. 91/2014/ND-CP dated October 01, 2014 on amendments to tax decrees;The Government's Decree No. 215/2013/ND-CP dated December 23, 2013 defining the functions, tasks, powers and organizational structure of the Ministry of Finance;At the request of the Director of the General Department of Taxation,The Minister of Finance provide guidelines for implementation of regulations laid down in the Government’s Decree No. 91/2014/ND-CP dated October 01, 2014 on amendments to tax decrees as follows:”- The Circular No. 26/2015/TT-BTC dated February 27, 2015 of the Ministry of Finance providing guidelines for value-added tax and tax administration in the Government's Decree No. 12/2015/ND-CP dated February 12, 2015 on guidelines for the Law on Amendments to Laws and Decrees on taxation, and amendments to Circular No. 39/2014/TT-BTC dated March 31, 2014 of the Ministry of Finance on invoices for goods sale and service provision is promulgated pursuant to:“The Law on Tax Administration No. 78/2006/QH11 and Law No. 21/2012/QH13 on amendments to the Law on Tax Administration;The Law on Value-added Tax No. 13/2008/QH12 dated June 03, 2008 and Law on amendments to the Law on Value-added Tax;The Law No. 71/2014/QH13 on Amendments to Laws on Taxation;The Government’s Decree No. 51/2010/ND-CP dated May 14, 2010 and the Government’s Decree No. 04/2014/ND-CP dated January 17, 2014 on invoices for goods sale and service provision;The Government’s Decree No. 83/2013/ND-CP dated July 22, 2013 on guidelines for implementation of the Law on Tax Administration and the Law on Amendments to the Law on Tax Administration;The Government’s Decree No. 209/2013/ND-CP dated December 18, 2013 on guidelines for implementation of the Law on Value-Added Tax;The Government’s Decree No. 12/2015/ND-CP dated February 12, 2015 on guidelines for implementation of the Law on Amendments to Laws and Decrees on Taxation;The Government's Decree No. 215/2013/ND-CP dated November 23, 2013 defining the functions, tasks, powers and organizational structure of the Ministry of Finance;At the request of the Director of the General Department of Taxation,The Minister of Finance provide guidelines for value-added tax, tax administration and invoices for goods sale and service provision as follows:”- The Circular No. 193/2015/TT-BTC dated November 24, 2015 of the Ministry of Finance amending and supplementing the Circular No. 219/2013/TT-BTC of the Ministry of Finance dated December 31, 2013 providing guidance on implementation of the Law on Value-added Tax and the Government's Decree No. 209/2013/ND-CP dated December 18, 2013 providing guidance on some Articles of the Law on Value-Added Tax is promulgated as follows:“The Law on Value-added Tax No. 13/2008/QH12 dated June 03, 2008 and Law on amendments to the Law on Value-added Tax No. 31/2013/QH13 dated June 19, 2013;The Law No. 71/2014/QH13 on Amendments to Laws on Taxation dated November 26, 2014;The Government’s Decree No. 209/2013/ND-CP dated December 18, 2013 on guidelines for implementation of the Law on Value-Added Tax;The Government’s Decree No. 12/2015/ND-CP dated February 12, 2015 on guidelines for implementation of the Law on Amendments to Laws and Decrees on Taxation;The Government's Decree No. 215/2013/ND-CP dated November 23, 2013 defining the functions, tasks, powers and organizational structure of the Ministry of Finance;In furtherance of the Government’s Resolution the Government’s regular meeting - August 2015 dated September 07, 2015;At the request of the Director of the General Department of Taxation,The Minister of Finance provides guidelines for amendments to the Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance on guidelines for value-added tax as follows:- The Circular No. 130/2016/TT-BTC dated August 12, 2016 of the Ministry of Finance on guidelines for the implementation of the Government’s Decree No. 100/2016/ND-CP dated July 01, 2016 on the implementation of the Law on Amendments to Certain Articles of the Law on Value Added Tax, the Law on Special Excise Tax and the Law on Tax Administration and to Certain Articles of Tax-related Circulars is promulgated pursuant to:“The Law on Tax Administration No. 78/2006/QH11 and Law No. 21/2012/QH13 on amendments to the Law on Tax Administration;The Law on Value-added Tax No. 13/2008/QH12 dated June 03, 2008 and Law No. 31/2013/QH13 on amendments to the Law on Value-added Tax;The Law No. 106/2016/QH13 on amendments to the Law on Amendments to Certain Articles of the Law on Value Added Tax, the Law on Special Excise Tax and the Law on Tax Administration;The Law on Corporate Income Tax No. 14/2008/QH12 and Law No. 32/2013/QH13 on Amendments to the Law on Corporate Income Tax;The Government’s Decree No. 83/2013/ND-CP dated July 22, 2013 on guidelines for the Law on Tax Administration and the Law on Amendments to the Law on Tax Administration;The Government’s Decree No. 218/2013/ND-CP dated December 26, 2013 on guidelines for implementation of the Law on Corporate Income Tax;The Government’s Decree No. 100/2016/ND-CP dated July 01, 2016 on the implementation of the Law on Amendments to Certain Articles of the Law on Value Added Tax, the Law on Special Excise Tax and the Law on Tax Administration;The Government's Decree No. 215/2013/ND-CP dated November 23, 2013 defining the functions, tasks, powers and organizational structure of the Ministry of Finance;At the request of the Director of the General Department of Taxation,The Minister of Finance promulgates a Circular to provide guidelines for implementation of the Government’s Decree No. 100/2016/ND-CP dated July 01, 2016 on the implementation of the Law on Amendments to Certain Articles of the Law on Value Added Tax, the Law on Special Excise Tax and the Law on Tax Administration and to Certain Articles of Tax-related Circulars as follows:”- The Circular No. 173/2016/TT-BTC dated October 28, 2016 of the Ministry of Finance amending and supplementing the first paragraph of Clause 3 Article 15 of Circular No. 219/2013/TT-BTC dated December 31, 2013 by the Ministry of Finance (which was amended by Circular no. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 and Circular No. 26/2015/TT-BTC dated February 27, 2015 by the Ministry of Finance) is promulgated pursuant to:“The Law on Tax Administration No. 78/2006/QH11 and Law No. 21/2012/QH13 on amendments to the Law on Tax Administration;The Law on Value-added Tax No. 13/2008/QH12 and Law No. 31/2013/QH13 on amendments to the Law on Value-added Tax; Law No. 71/2014/QH13 on Amendments to the Laws on taxation;The Government’s Decree No. 209/2013/ND-CP dated December 18, 2013 providing guidance on some Articles of the Law on Value-Added Tax; the Government's Decree No. 91/2014/ND-CP dated October 01, 2014 on amendments to tax decrees;The Government’s Decree No. 83/2013/ND-CP dated July 22, 2013 on guidelines for implementation of the Law on Tax Administration and the Law on Amendments to the Law on Tax Administration;The Government’s Decree No. 12/2015/ND-CP dated February 12, 2015 on guidelines for implementation of the Law on Amendments to Laws and Decrees on Taxation;The Government's Decree No. 215/2013/ND-CP dated November 23, 2013 defining the functions, tasks, powers and organizational structure of the Ministry of Finance;At the request of the Director of the General Department of Taxation,The Minister of Finance hereby promulgates a Circular on amendments to decrees providing guidance on value-added tax as follows:”- The Circular No. 93/2017/TT-BTC dated September 19, 2017 of the Ministry of Finance on amendments to Clause 3 and Clause 4 Article 12 of Circular No. 219/2013/TT-BTC dated December 31, 2013 (amended by the Circular No. 119/2014/TT-BTC dated August 25, 2014); abrogation of Clause 7 Article 11 of Circular No. 156/2013/TT-BTC dated November 06, 2013 is promulgated pursuant to:“The Law on Tax Administration No. 78/2006/QH11 and Law No. 21/2012/QH13 on amendments to the Law on Tax Administration;The Law on Value-added Tax No. 13/2008/QH12 dated June 03, 2008 and Law No. 31/2013/QH13 on amendments to the Law on Value-added Tax;The Government’s Decree No. 209/2013/ND-CP dated December 18, 2013 providing guidance on some Articles of the Law on Value-Added Tax; the Government's Decree No. 91/2014/ND-CP dated October 01, 2014 on amendments to tax decrees;The Government’s Decree No. 83/2013/ND-CP dated July 22, 2013 on guidelines for the Law on Tax Administration and the Law on Amendments to the Law on Tax Administration;The Government’s Decree No. 12/2015/ND-CP dated February 12, 2015 on guidelines for implementation of the Law on Amendments to Laws and Decrees on Taxation;The Government's Decree No. 87/2017/ND-CP dated July 26, 2017 defining the functions, tasks, powers and organizational structure of the Ministry of Finance;At the request of the Director of the General Department of Taxation,The Minister of Finance promulgates a Circular on amendments to Clause 3 and Clause 4 Article 12 of Circular No. 219/2013/TT-BTC dated December 31, 2013 (amended by the Circular No. 119/2014/TT-BTC dated August 25, 2014) and abrogation of Clause 7 Article 11 of Circular No. 156/2013/TT-BTC dated November 06, 2013 as follows:”- The Circular No. 25/2018/TT-BTC dated March 16, 2018 of the Ministry of Finance on guidelines for the Government’s Decree No. 146/2017/ND-CP dated December 12, 2017 on amendments to some articles of the Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance and Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance is promulgated pursuant to:“The Law on Securities No. 70/2006/QH11 dated June 29, 2006 and Law No. 62/2010/QH12 on amendments to the Law on Securities dated November 24, 2010;“The Law on Personal Income Tax No. 04/2007/QH12 dated November 21, 2007 and Law on amendments to the Law on Personal Income Tax No. 26/2012/QH13 dated November 22, 2012;Pursuant to the Law on Enterprises No. 68/2014/QH13 dated November 26, 2014;The Law No. 71/2014/QH13 on Amendments to Laws on Taxation dated November 26, 2014;The Law No. 106/2016/QH13 on amendments to the Law on Amendments to Certain Articles of the Law on Value Added Tax, the Law on Special Excise Tax and the Law on Tax Administration;The Government’s Decree No. 65/2013/ND-CP dated June 27, 2013 on guidelines for implementation of the Law on Personal Income Tax and the Law on Amendments to the Law on Personal Income Tax;The Government’s Decree No. 12/2015/ND-CP dated February 12, 2015 on guidelines for implementation of the Law on Amendments to Laws and Decrees on Taxation;The Government’s Decree No. 100/2016/ND-CP dated July 01, 2016 on the implementation of the Law on Amendments to Certain Articles of the Law on Value Added Tax, the Law on Special Excise Tax and the Law on Tax Administration;The Government’s Decree No. 146/2017/ND-CP dated December 12, 2017 on amendments to the Government’s Decree No. 100/2016/ND-CP dated July 01, 2016 and Government’s Decree No. 12/2015/ND-CP dated February 12, 2015;The Government's Decree No. 87/2017/ND-CP dated July 26, 2017 defining the functions, tasks, powers and organizational structure of the Ministry of Finance;At the request of the Director of the General Department of Taxation,The Minister of Finance promulgates a Circular on guidelines for the Government’s Decree No. 146/2017/ND-CP dated December 12, 2017 on amendments to some articles of the Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance and Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance as follows:”- The Circular No. 82/2018/TT-BTC dated August 30, 2018 of the Ministry of Finance on repeal of Example 37 in Point a.4 Clause 10 Article 7 of the Circular No. 219/2013/TT-BTC of the Ministry of Finance dated December 31, 2013 providing guidance on implementation of the Law on Value-added Tax and the Government's Decree No. 209/2013/ND-CP dated December 18, 2013 providing guidance on some Articles of the Law on Value-Added Tax is promulgated pursuant to:“The Law on Tax Administration No. 78/2006/QH11 and Law No. 21/2012/QH13 on amendments to the Law on Tax Administration;The Law on Value-added Tax No. 13/2008/QH12 and Law No. 31/2013/QH13 on amendments to the Law on Value-added Tax; Law No. 71/2014/QH13 on Amendments to the Laws on taxation;The Government’s Decree No. 209/2013/ND-CP dated December 18, 2013 providing guidance on some Articles of the Law on Value-Added Tax; the Government's Decree No. 91/2014/ND-CP dated October 01, 2014 on amendments to tax decrees;The Government’s Decree No. 83/2013/ND-CP dated July 22, 2013 on guidelines for implementation of the Law on Tax Administration and the Law on Amendments to the Law on Tax Administration;The Government’s Decree No. 12/2015/ND-CP dated February 12, 2015 on guidelines for implementation of the Law on Amendments to Laws and Decrees on Taxation;The Government's Decree No. 87/2017/ND-CP dated July 26, 2017 defining the functions, tasks, powers and organizational structure of the Ministry of Finance;At the request of the Director of the General Department of Taxation,The Minister of Finance promulgates a Circular on repeal of Example 37 in Point a.4 Clause 10 Article 7 of the Circular No. 219/2013/TT-BTC of the Ministry of Finance dated December 31, 2013 providing guidance on implementation of the Law on Value-added Tax and the Government's Decree No. 209/2013/ND-CP dated December 18, 2013 providing guidance on some Articles of the Law on Value-Added Tax:”

This Clause is amended by Clause 1 Article 1 of the Circular No. 20/2015/TT-BTC providing guidelines for value-added tax and tax administration in the Government's Decree No. 12/2015/ND-CP dated February 12, 2015 on guidelines for the Law on Amendments to Laws, Decrees on taxation, and amendments to Circular No. 39/2014/TT-BTC dated March 31, 2014 of the Ministry of Finance on invoices for goods sale and service provision, which has been effective since January 01, 2015.

This Clause is amended by Clause 2 Article 1 of the Circular No. 26/2015/TT-BTC providing guidelines for value-added tax and tax administration in the Government's Decree No. 12/2015/ND-CP dated February 12, 2015 on guidelines for the Law on Amendments to Laws and Decrees on taxation, and amendments to Circular No. 39/2014/TT-BTC dated March 31, 2014 of the Ministry of Finance on invoices for goods sale and service provision, which has been effective since January 01, 2015.

This Clause is amended by Point a Clause 1 Article 1 of the Circular No. 130/2016/TT-BTC on guidelines for the implementation of the Government’s Decree No. 100/2016/ND-CP dated July 01, 2016 on the implementation of the Law on Amendments to Certain Articles of the Law on Value Added Tax, the Law on Special Excise Tax and the Law on Tax Administration and to Certain Articles of Tax-related Circulars, which has been effective since July 01, 2016.

This Clause is amended by Point b Clause 1 Article 1 of the Circular No. 130/2016/TT-BTC on guidelines for the implementation of the Government’s Decree No. 100/2016/ND-CP dated July 01, 2016 on the implementation of the Law on Amendments to Certain Articles of the Law on Value Added Tax, the Law on Special Excise Tax and the Law on Tax Administration and to Certain Articles of Tax-related Circulars, which has been effective since July 01, 2016.

This Clause is amended by Article 1 of the Circular No. 25/2018/TT-BTC on guidelines for the Government’s Decree No. 146/2017/ND-CP dated December 12, 2017 on amendments to some articles of the Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance and Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance, which has been effective since May 01, 2018.(This Clause is amended by Point c Clause 1 Article 1 of the Circular No.130/2016/TT-BTC, which has been effective since July 01, 2016).

This Point is added by Article 1 of the Circular No. 193/2015/TT-BTC amending and supplementing the Circular No. 219/2013/TT-BTC of the Ministry of Finance dated December 31, 2013 providing guidance on implementation of the Law on Value-added Tax and the Government's Decree No. 209/2013/ND-CP dated December 18, 2013 providing guidance on some Articles of the Law on Value-Added Tax, which has been effective since January 10, 2016.

This Clause is amended by Clause 2 Article 3 of the Circular No. 119/2014/TT-BTC on amendments to Circular No. 156/2013/TT-BTC dated November 06, 2013, Circular No. 111/2013/TT-BTC dated August 15, 2013, Circular No. 219/2013/TT-BTC dated December 31, 2013, Circular No. 08/2013/TT-BTC dated January 10, 2013, Circular No. 85/2011/TT-BTC dated June 17, 2011, Circular No. 39/2014/TT-BTC dated March 31, 2014 and Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance to simplify tax formalities, which has been effective since September 01, 2014.

Regulations on exchange rates applied when determining revenues and calculating taxes are repealed by Clause 4 Article 1 of the Circular No. 26/2015/TT-BTC providing guidelines for value-added tax and tax administration in the Government's Decree No. 12/2015/ND-CP dated February 12, 2015 on guidelines for the Law on Amendments to Laws and Decrees on taxation, and amendments to Circular No. 39/2014/TT-BTC dated March 31, 2014 of the Ministry of Finance on invoices for goods sale and service provision, which has been effective since January 01, 2015.

This Clause is amended by Clause 2 Article 1 of the Circular No. 130/2016/TT-BTC on guidelines for the implementation of the Government’s Decree No. 100/2016/ND-CP dated July 01, 2016 on the implementation of the Law on Amendments to Certain Articles of the Law on Value Added Tax, the Law on Special Excise Tax and the Law on Tax Administration and to Certain Articles of Tax-related Circulars, which has been effective since July 01, 2016.This Clause is amended by the Circular No. 26/2015/TT-BTC, which has been effective since January 01, 2015.

This Clause is amended by Clause 6 Article 1 of the Circular No. 26/2015/TT-BTC providing guidelines for value-added tax and tax administration in the Government's Decree No. 12/2015/ND-CP dated February 12, 2015 on guidelines for the Law on Amendments to Laws, Decrees on taxation, and amendments to Circular No. 39/2014/TT-BTC dated March 31, 2014 of the Ministry of Finance on invoices for goods sale and service provision, which has been effective since January 01, 2015.

This Clause is repealed by Clause 7 Article 1 of the Circular No. 26/2015/TT-BTC providing guidelines for value-added tax and tax administration in the Government's Decree No. 12/2015/ND-CP dated February 12, 2015 on guidelines for the Law on Amendments to Laws and Decrees on taxation, and amendments to Circular No. 39/2014/TT-BTC dated March 31, 2014 of the Ministry of Finance on invoices for goods sale and service provision, which has been effective since January 01, 2015.

This Clause is repealed by Clause 7 Article 1 of the Circular No. 26/2015/TT-BTC providing guidelines for value-added tax and tax administration in the Government's Decree No. 12/2015/ND-CP dated February 12, 2015 on guidelines for the Law on Amendments to Laws, Decrees on taxation, and amendments to Circular No. 39/2014/TT-BTC dated March 31, 2014 of the Ministry of Finance on invoices for goods sale and service provision, which has been effective since January 01, 2015.

This Clause is amended by Clause 8 Article 1 of the Circular No. 26/2015/TT-BTC providing guidelines for value-added tax and tax administration in the Government's Decree No. 12/2015/ND-CP dated February 12, 2015 on guidelines for the Law on Amendments to Laws and Decrees on taxation, and amendments to Circular No. 39/2014/TT-BTC dated March 31, 2014 of the Ministry of Finance on invoices for goods sale and service provision, which has been effective since January 01, 2015.

This Clause is amended by Clause 3 Article 3 of the Circular No. 119/2014/TT-BTC on amendments to Circular No. 156/2013/TT-BTC dated November 06, 2013, Circular No. 111/2013/TT-BTC dated August 15, 2013, Circular No. 219/2013/TT-BTC dated December 31, 2013, Circular No. 08/2013/TT-BTC dated January 10, 2013, Circular No. 85/2011/TT-BTC dated June 17, 2011, Circular No. 39/2014/TT-BTC dated March 31, 2014 and Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance to simplify tax formalities, which has been effective since September 01, 2014.

The paragraphs 1 to 5 of this Point are amended by Clause 1 Article 1 of the Circular No. 93/2017/TT-BTC dated September 19, 2017 of the Ministry of Finance on amendments to Clause 3 and Clause 4 Article 12 of Circular No. 219/2013/TT-BTC dated December 31, 2013 (amended by the Circular No. 119/2014/TT-BTC dated August 25, 2014); abrogation of Clause 7 Article 11 of Circular No. 156/2013/TT-BTC dated November 06, 2013, which has been effective since November 05, 2017.This Point is amended by Clause 3 Article 3 of the Circular No. 119/2014/TT-BTC, which has been effective since September 01, 2014.

This Clause is amended by Clause 3 Article 3 of the Circular No. 119/2014/TT-BTC on amendments to Circular No. 156/2013/TT-BTC dated November 06, 2013, Circular No. 111/2013/TT-BTC dated August 15, 2013, Circular No. 219/2013/TT-BTC dated December 31, 2013, Circular No. 08/2013/TT-BTC dated January 10, 2013, Circular No. 85/2011/TT-BTC dated June 17, 2011, Circular No. 39/2014/TT-BTC dated March 31, 2014 and Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance to simplify tax formalities, which has been effective since September 01, 2014.

This Clause is amended by Clause 4 Article 3 of the Circular No. 119/2014/TT-BTC on amendments to Circular No. 156/2013/TT-BTC dated November 06, 2013, Circular No. 111/2013/TT-BTC dated August 15, 2013, Circular No. 219/2013/TT-BTC dated December 31, 2013, Circular No. 08/2013/TT-BTC dated January 10, 2013, Circular No. 85/2011/TT-BTC dated June 17, 2011, Circular No. 39/2014/TT-BTC dated March 31, 2014 and Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance to simplify tax formalities, which has been effective since September 01, 2014.

This Clause is amended by Point a Clause 9 Article 1 of the Circular No. 26/2015/TT-BTC dated February 27, 2015 of the Ministry of Finance providing guidelines for value-added tax and tax administration in the Government's Decree No. 12/2015/ND-CP dated February 12, 2015 on guidelines for the Law on Amendments to Laws and Decrees on taxation, and amendments to Circular No. 39/2014/TT-BTC dated March 31, 2014 of the Ministry of Finance on invoices for goods sale and service provision, which has been effective since January 01, 2015.

This Clause is amended by Article 9 of the Circular No. 151/2014/TT-BTC dated October 10, 2014 providing guidelines for implementation of the Government's Decree No. 91/2014/ND-CP dated October 01, 2014 on amendments to tax decrees, which has been effective since November 15, 2014.

This Example is added by Clause 5 Article 3 of the Circular No. 119/2014/TT-BTC on amendments to Circular No. 156/2013/TT-BTC dated November 06, 2013, Circular No. 111/2013/TT-BTC dated August 15, 2013, Circular No. 219/2013/TT-BTC dated December 31, 2013, Circular No. 08/2013/TT-BTC dated January 10, 2013, Circular No. 85/2011/TT-BTC dated June 17, 2011, Circular No. 39/2014/TT-BTC dated March 31, 2014 and Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance to simplify tax formalities, which has been effective since September 01, 2014.

This Clause is added by Point b Clause 9 Article 1 of the Circular No. 26/2015/TT-BTC providing guidelines for value-added tax and tax administration in the Government's Decree No. 12/2015/ND-CP dated February 12, 2015 on guidelines for the Law on Amendments to Laws and Decrees on taxation, and amendments to Circular No. 39/2014/TT-BTC dated March 31, 2014 of the Ministry of Finance on invoices for goods sale and service provision, which has been effective since January 01, 2015.

This Article is amended by Clause 10 Article 1 of the Circular No. 26/2015/TT-BTC providing guidelines for value-added tax and tax administration in the Government's Decree No. 12/2015/ND-CP dated February 12, 2015 on guidelines for the Law on Amendments to Laws and Decrees on taxation, and amendments to Circular No. 39/2014/TT-BTC dated March 31, 2014 of the Ministry of Finance on invoices for goods sale and service provision, which has been effective since January 01, 2015.This Article is amended by the Circular No. 151/2014/TT-BTC dated October 01, 2014 providing guidelines for implementation of the Government's Decree No. 91/2014/ND-CP dated October 01, 2014 on amendments to tax decrees, which has been effective since November 15, 2014 and the Circular No. Circular No. 119/2014/TT-BTC dated August 25, 2014 of the Ministry of Finance on amendments to Circular No. 156/2013/TT-BTC dated November 06, 2013, Circular No. 111/2013/TT-BTC dated August 15, 2013, Circular No. 219/2013/TT-BTC dated December 31, 2013, Circular No. 08/2013/TT-BTC dated January 10, 2013, Circular No. 85/2011/TT-BTC dated June 17, 2011, Circular No. 39/2014/TT-BTC dated March 31, 2014 and Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance to simplify tax formalities, which has been effective since September 01, 2014.

This paragraph is amended by Article 1 of the Circular No. 173/2016/TT-BTC dated October 28, 2016 of the Ministry of Finance amending and supplementing the first paragraph of Clause 3 Article 15 of Circular No. 219/2013/TT-BTC dated December 31, 2013 by the Ministry of Finance (which was amended by Circular no. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 and Circular No. 26/2015/TT-BTC dated February 27, 2015 by the Ministry of Finance), which has been effective since December 15, 2016.

This Clause is amended by Clause 7 Article 3 of the Circular No. 119/2014/TT-BTC on amendments to Circular No. 156/2013/TT-BTC dated November 06, 2013, Circular No. 111/2013/TT-BTC dated August 15, 2013, Circular No. 219/2013/TT-BTC dated December 31, 2013, Circular No. 08/2013/TT-BTC dated January 10, 2013, Circular No. 85/2011/TT-BTC dated June 17, 2011, Circular No. 39/2014/TT-BTC dated March 31, 2014 and Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance to simplify tax formalities, which has been effective since September 01, 2014.

This Article is amended by Clause 3 Article 1 of the Circular No. 130/2016/TT-BTC on guidelines for the implementation of the Government’s Decree No. 100/2016/ND-CP dated July 01, 2016 on the implementation of the Law on Amendments to Certain Articles of the Law on Value Added Tax, the Law on Special Excise Tax and the Law on Tax Administration and to Certain Articles of Tax-related Circulars, which has been effective since July 01, 2016.This Article is amended by the Circular No. 26/2015/TT-BTC providing guidelines for value-added tax and tax administration in the Government's Decree No. 12/2015/ND-CP dated February 12, 2015 on guidelines for the Law on Amendments to Laws and Decrees on taxation, and amendments to Circular No. 39/2014/TT-BTC dated March 31, 2014 of the Ministry of Finance on invoices for goods sale and service provision, which has been effective since January 01, 2015.

This Clause is amended by Article 2 of the Circular No. 25/2018/TT-BTC on guidelines for the Government’s Decree No. 146/2017/ND-CP dated December 12, 2017 on amendments to some articles of the Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance and Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance, which has been effective since May 01, 2018.

Article 7 of the Circular No. 119/2014/TT-BTC dated August 25, 2014 of the Ministry of Finance on amendments to Circular No. 156/2013/TT-BTC dated November 06, 2013, Circular No. 111/2013/TT-BTC dated August 15, 2013, Circular No. 219/2013/TT-BTC dated December 31, 2013, Circular No. 08/2013/TT-BTC dated January 10, 2013, Circular No. 85/2011/TT-BTC dated June 17, 2011, Circular No. 39/2014/TT-BTC dated March 31, 2014 and Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance to simplify tax formalities, which has been effective since September 01, 2014, stipulates that:“Article 7. Effect1. This Circular comes into force from September 01, 2014.When a company needs time to prepare for following the procedures and making the forms provided in the Circulars mentioned in Clause 2 of this Article, it may choose the procedures and forms according to current regulations and the regulations on amendment by October 31, 2014 without being required to notify and register with the tax authority. The General Department of Taxation shall provide instructions on the implementation of this regulation.2. The instructions and forms provided in the Circular No. 156/2013/TT-BTC dated November 06, 2013, Circular No. 111/2013/TT-BTC dated August 15, 2013, Circular No. 219/2013/TT-BTC dated December 31, 2013, Circular No. 08/2013/TT-BTC dated January 10, 2013, Circular No. 85/2011/TT-BTC dated June 17, 2011, Circular No. 39/2014/TT-BTC dated March 31, 2014 and Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance that is amended, replaced or annulled by this Circular are repealed.3. Other administrative procedures related to taxation that are not mentioned in this Circular shall be implemented according to applicable regulations of law.Difficulties that arise during the implementation of this Circular should be promptly reported to the Ministry of Finance for resolution./.”- Article 22 of the Circular No. 151/2014/TT-BTC dated October 10, 2014 providing guidelines for implementation of the Government's Decree No. 91/2014/ND-CP dated October 01, 2014 on amendments to tax decrees, which comes into force from November 15, 2014, stipulates that:“Article 22. EffectThis Circular comes into force from November 15, 2014, except that regulations in Chapter I of this Circular shall apply to the corporate income tax period from 2014.”- Articles 4 and 5 of the Circular No. 26/2015/TT-BTC providing guidelines for value-added tax and tax administration in the Government's Decree No. 12/2015/ND-CP dated February 12, 2015 on guidelines for the Law on Amendments to Laws, Decrees on taxation, and amendments to Circular No. 39/2014/TT-BTC dated March 31, 2014 of the Ministry of Finance on invoices for goods sale and service provision stipulate that:“Article 4. Effect1. This Circular comes into force from the effective date of the Law No. 71/2014/QH13 on amendments to tax laws and the Government's Decree No. 12/2015/ND-CP on guidelines for the Law on Amendments to tax laws and decrees on taxation.2. Clause 2 Article 1 of this Circular shall apply to the contracts to buy agriculture machinery signed before the effective date of the Law No. 71/2014/QH13 (those mentioned in Clause 11 Article 10 of Circular No. 219/2013/TT-BTC, which is amended in Clause 2 Article 1 of this Circular) under which the ownership or right of use is transferred after the effective date of the Law no. 71/2014/QH13.3. With regard to contracts to build offshore fishing ships signed before January 01, 2015 at VAT-inclusive prices, if the ships are not done and transferred by January 01, 2015, Clause 2 Article 1 of this Circular shall apply to the total value of such ships.4. For the purpose of simplifying tax formalities, regulations on List of invoices, receipts for purchases and sales, and regulations on exchange rates applied when determining revenues and calculating taxes in the following documents shall be annulled:- Circular No. 05/2012/TT-BTC dated January 05, 2012 and Decree No. 113/2011/ND-CP dated December 08, 2011.- Circular No. 219/2013/TT-BTC dated December 31, 2013 and the Government's Decree No. 209/2013/ND-CP dated December 18, 2013.- Circular No. 156/2013/TT-BTC dated November 06, 2013.- The Circular No. 119/2014/TT-BTC dated August 25, 2014.5. Notices of tax exemption or reduction according to International Agreements submitted to tax authorities before this Circular comes into force shall be retained together with relevant documents in accordance with this Circular by agents or representative offices in Vietnam of foreign transport companies.6. During the implementation of this Circular, if the documents cited in this Circular are amended or replaced, the new documents shall apply.Article 5. Responsibility for implementation1. People’s Committees of provinces and central-affiliated cities shall direct competent authorities to implement regulations of the Government and instructions of the Ministry of Finance.2. Tax authorities shall disseminate and instruct taxpayers to implement this Circular.3. The entities regulated by this Circular must comply with instructions in this Circular.Difficulties that arise during the implementation of this Circular should be promptly reported to the Ministry of Finance for consideration and resolution./.”- Article 2 of the Circular No. 193/2015/TT-BTC amending and supplementing the Circular No. 219/2013/TT-BTC of the Ministry of Finance dated December 31, 2013 providing guidance on implementation of the Law on Value-added Tax and the Government's Decree No. 209/2013/ND-CP dated December 18, 2013 providing guidance on some Articles of the Law on Value-Added Tax, which comes into force from January 10, 2016, stipulates that:“Article 2. Effect1. This Circular comes into force from January 10, 2016.2. Organizations or enterprises paid remunerations by regulatory authorities for their provision of authorized collection or payment services before the entry into force of this Circular shall follow instructions provided for in this Circular. Difficulties that arise during the implementation of this Circular should be promptly reported to the Ministry of Finance (General Department of Taxation) for consideration and resolution./.”- Articles 6 and 7 of the Circular No. 130/2016/TT-BTC on guidelines for the implementation of the Government’s Decree No. 100/2016/ND-CP dated July 01, 2016 on the implementation of the Law on Amendments to Certain Articles of the Law on Value Added Tax, the Law on Special Excise Tax and the Law on Tax Administration and to Certain Articles of Tax-related Circulars, which comes into force from July 01, 2016, stipulate that:“Article 6. Effect1. This Circular comes into force, except for Clause 2 of this Article, from the effective date of the Law No. 106/2016/QH13 and the Government’s Decree No. 100/2016/ND-CP.2. Article 4 of this Circular takes effect from the tax period of 2016.Article 7. Responsibility for implementation1. People’s Committees of provinces and central-affiliated cities shall direct competent authorities to implement regulations of the Government and instructions of the Ministry of Finance.2. Tax authorities shall disseminate and instruct taxpayers to implement this Circular.3. The entities regulated by this Circular must comply with instructions in this Circular.Difficulties that arise during the implementation of this Circular should be promptly reported to the Ministry of Finance for consideration and resolution./.”- Article 2 of the Circular No. 173/2016/TT-BTC amending and supplementing the first paragraph of Clause 3 Article 15 of Circular No. 219/2013/TT-BTC dated December 31, 2013 by the Ministry of Finance (which was amended by Circular no. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 and Circular No. 26/2015/TT-BTC dated February 27, 2015 by the Ministry of Finance), which comes into force from December 15, 2016, stipulates that:“Article 2.This Circular comes into force from December 15, 2016.Difficulties that arise during the implementation of this Circular should be promptly reported to the Ministry of Finance for consideration and resolution./.”- Article 3 of the Circular No. 93/2017/TT-BTC dated September 19, 2017 of the Ministry of Finance on amendments to Clause 3 and Clause 4 Article 12 of Circular No. 219/2013/TT-BTC dated December 31, 2013 (amended by the Circular No. 119/2014/TT-BTC dated August 25, 2014); abrogation of Clause 7 Article 11 of Circular No. 156/2013/TT-BTC dated November 06, 2013, which comes into force from November 05, 2017, stipulates that:“Article 3. EffectThis Circular comes into force from November 05, 2017.Difficulties that arise during the implementation of this Circular should be promptly reported to the Ministry of Finance for consideration and resolution./.”- Article 5 of the Circular No. 25/2018/TT-BTC on guidelines for the Government’s Decree No. 146/2017/ND-CP dated December 12, 2017 on amendments to some articles of the Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance and Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance, which comes into force from May 01, 2018, stipulates that:“Article 5. Effect1. This Circular comes into force from May 01, 2018.2. Cases that arise from February 01, 2018 and are the subject of the Decree No. 146/2017/ND-CP are specified in the Decree No. 146/2017/ND-CP and Article 1, Article 2, Clauses 2, 3 and 4 Article 3 of this Circular.3. Difficulties that arise during the implementation of this Circular should be promptly reported to the Ministry of Finance for consideration and resolution./.”- Article 2 of the Circular No. 82/2018/TT-BTC on repeal of Example 37 in Point a.4 Clause 10 Article 7 of the Circular No. 219/2013/TT-BTC of the Ministry of Finance dated December 31, 2013 providing guidance on implementation of the Law on Value-added Tax and the Government's Decree No. 209/2013/ND-CP dated December 18, 2013 providing guidance on some Articles of the Law on Value-Added Tax, which comes into force from October 15, 2018, stipulates that:“Article 2.1. This Circular comes into force from October 15, 2018.2. Difficulties that arise during the implementation of this Circular should be promptly reported to the Ministry of Finance for consideration and resolution./.”

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