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MINISTRY OF FINANCE
GENERAL DEPARTMENT OF TAXATION
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THE SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
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No. 2679/TCT-CS
Re. Value-added tax and
corporate income tax policies for microfinance programs and projects
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Hanoi, June 24, 2024
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To: Department of
Taxation of Tien Giang Province
The General Department of
Taxation received the Official Dispatch No. 1426/CTTGI-TTHT dated April 05,
2024 of the Department of Taxation of Tien Giang Province on the value-added
tax (VAT) and corporate income tax (CIT) policies for microfinance programs and
projects funded by Tien Giang Capital Aid Fund for Women's Economic
Development (MOM Fund). The General Department of Taxation gives its opinions
on this issue hereunder:
A quotation from
clause 1 Article 1 of the National Assembly’s Law No. 31/2013/QH13 dated June
19, 2013 on amendments to some Articles of the Law on Value-added Tax
specifying goods and services not subject to tax:
“8. The following
finance, banking and securities services:
a) Credit extension
services including loan grant; discounted and rediscounted transfer of
negotiable instruments and other valuable papers; guarantee; finance lease;
credit card issuance; domestic factoring; international factoring; other forms
of credit extension according to regulations of law;
...”
A quotation from clause 2
Article 3 of the Decree No. 12/2015/ND-CP dated February 12, 2015 on amendments
to point a clause 2 Article 3 of the Government’s Decree No. 209/2013/ND-CP
dated December 18, 2013 on value-added tax:
“Article 3. Amendments to Decree No. 209/2013/ND-CP dated December 18, 2013
on guidelines for the Law on Value-added Tax, Article 2 of Decree No.
91/2014/ND-CP dated October 01, 2014 on amendments to Decrees on taxation:
...
...
...
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2. Point a Clause 2 of
Article 3 is amended as follows:
“a) Credit extension
services include:
- Loan grant;
- Discounted and
rediscounted transfer of negotiable instruments and other valuable papers;
- Guarantee;
- Finance lease;
- Credit card
issuance;
- Domestic factoring; international factoring;
...” ”
...
...
...
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“Article
1. Amendments to some Articles of Circular No. 219/2013/TT-BTC dated December 31, 2013 of the
Ministry of Finance on guidelines for the Law on Value-added tax and the
Government's Decree No. 209/2013/ND-CP dated December 18, 2013 on guidelines
for the Law on Value-added tax (amended by Circular
No. 119/2014/TT-BTC dated August 25, 2014 and Circular
No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of
Finance) as follows:
…
3. Point a clause 8 of
Article 4 (amended in Article 8 of Circular No. 151/2014/TT-BTC dated
October 10, 2014) is amended as follows:
“a) Credit extension
services include:
- Loan grant;
- Discounted and
rediscounted transfer of negotiable instruments and other valuable papers;
- Bank guarantee;
- Finance lease;
- Credit card
issuance.
...
...
...
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A quotation from Article
9 of the Circular No. 37/2019/TT-BTC dated June 25, 2019 of the Ministry of
Finance on guidelines for financial regime for
microfinance programs and projects of political organizations, socio-political
organizations and non-governmental organizations:
“Article
9. Policies on taxes, fees and charges
Microfinance programs
and projects shall comply with regulations of laws on taxes, fees and charges.”
A quotation from clause 4
Article 15 of the Government’s Decree No. 218/2013/ND-CP dated December 26,
2013 elaborating and providing guidelines on implementation of the
Law on Corporate Income Tax:
“Article 15.
Preferential tax rate
…
4. 20% tax rate (17%
from January 01, 2016) shall be applied to people's credit funds and
microfinance institutions.
People’s credit funds
and microfinance institutions shall apply 20% CIT rate after the period over
which 10% tax rate is applied expires as prescribed in Clause 1 of this
Article, and apply 17% tax rate from January 01, 2016. Microfinance
institutions defined in this Clause must be established and operate in
accordance with the Law on Credit Institutions.”
A quotation from clause 9
Article 4 of the Government’s Decree No. 218/2013/ND-CP dated December 26, 2013
(amended by clause 3 Article 1 of the Government’s Decree No. 12/2015/ND-CP
dated February 12, 2015):
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…
9..…income from
revenue-generated activities by performing the tasks assigned by the State of
the State financial funds: ... Poor Women Support Fund,...”
Pursuant to the
aforementioned regulations and contents of the Official Dispatch No.
1426/CTTGI-TTHT dated April 05, 2024 of the Department of Taxation of Tien
Giang Province:
- Regarding VAT:
In case Tien Giang Capital
Aid Fund for Women's Economic Development (MOM Fund) provides any of the credit
extension services specified in clause 8 Article 4 of the Circular No.
219/2013/TT-BTC amended by clause 3 Article 1 of the Circular No.
26/2015/TT-BTC, such service shall not be subject to VAT.
- Regarding CIT:
In case MOM Fund is a
microfinance program/project, conducts production or business activities
(financial activities) and annually distributes profits to Tien Giang Lottery
One Member Company Limited, it is required to pay CIT as prescribed in clause 4
Article 15 of the Government’s Decree No. 218/2013/ND-CP dated December 26,
2023, except for the case specified in clause 9 Article 4 of the Decree No.
218/2013/ND-CP.
For your information and
compliance./.
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BY ORDER OF DIRECTOR GENERAL
PP. DIRECTOR GENERAL OF POLICY DEPARTMENT
DEPUTY DIRECTOR GENERAL
Manh Thi Tuyet Mai