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THE NATIONAL
ASSEMBLY
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No. 13/2008/QH12
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Hanoi, June 3,
2008
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LAW
ON VALUE-ADDED TAX
Pursuant to the 1992
Constitution of the Socialist Republic of Vietnam, which was amended and
supplemented under Resolution No. 51/2001/QH10;
The National Assembly promulgates the Law on Value-Added Tax.
Chapter I
GENERAL PROVISIONS
Article 1.-
Governing scope
This Law provides for objects
subject and not subject to value-added tax, taxpayers, tax bases, tax
calculation methods, and tax credit and refund.
Article 2.-
Value-added tax
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Article 3.-
Taxable objects
Goods and services used for
production, trading or consumption in Vietnam are subject to value-added tax,
except those specified in Article 5 of this Law.
Article 4.-
Taxpayers
Taxpayers include organizations
and individuals producing or trading in goods or services subject to
value-added tax (below referred to as business establishments) and
organizations and individuals importing goods subject to value-added tax (below
referred to as importers).
Article 5.-
Non-taxable objects
1. Cultivation and husbandry
products, and reared and fished aquatic products which have not yet been
processed into other products or have been just preliminarily processed and
sold by producing and fishing organizations and individuals, and products at
the stage of importation.
2. Products which are animal
breeds and plant varieties, including breeding eggs, breeding animals,
seedlings, seeds, sperms, embryos and genetic materials.
3. Irrigation and drainage; soil
ploughing and harrowing; dredging of intra-field canals and ditches for
agricultural production; services of harvesting farm produce.
4. Salt products made of
seawater, natural rock salt, refined salt and iodized salt.
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6. Transfer of land use rights;
7. Life insurance, student
insurance, insurance on domestic animals, insurance on plants and reinsurance.
8. Credit provision services;
securities trading; capital transfer; derivative financial services, including
interest-rate swap contracts, forward contracts, futures contracts, call or put
options, foreign currency sales, and other derivative financial services as
prescribed by law.
9. Healthcare and animal health
services, including medical examination and treatment and preventive services
for humans and domestic animals.
10. Public post and
telecommunications and universal Internet services under the Governments
programs.
11. Public services on
sanitation and water drainage in streets and residential areas; maintenance of
zoos, flower gardens, parks, street greeneries and public lighting; funeral
services;
12. Renovation, repair and
construction of cultural, artistic, public service and infrastructure works and
residential houses for social policy beneficiaries, which are funded with
peoples contributions or humanitarian aid.
13. Teaching and vocational
training as provided for by law.
14. State budget-funded radio
and television broadcasting.
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16. Mass transit by bus and
tramcar.
17. Machinery, equipment and
supplies which cannot be manufactured at home and need to be imported for
direct use in scientific research and technological development activities;
machinery, equipment, spare parts, special-purpose means of transport and
supplies which cannot be manufactured at home and need to be imported for
prospecting, exploring and developing oil and gas fields; aircraft, drilling
platforms and ships which cannot be manufactured at home and need to be
imported for the formation of enterprises fixed assets or which are hired from
foreign parties for production and business activities or for lease.
18. Special-purpose weapons and
military equipment for security and defense purposes.
19. Goods imported as
humanitarian aid or non-refundable aid; gifts for state agencies, political
organizations, socio-political organizations, socio-political-professional
organizations, social organizations, socio-professional organizations or
peoples armed forces units; donations or gifts for Vietnam-based individuals
within the Government-prescribed quotas; belongings of foreign organizations
and individuals within diplomatic immunity quotas; and personal effects within
duty-free luggage quotas.
Goods and services sold to
foreign organizations or individuals or international organizations for use as
humanitarian aid, and non-refundable aid to Vietnam.
20. Goods transferred out of
border gate or transited via the Vietnamese territory; goods temporarily
imported for re-export; goods temporarily exported for re-import; raw materials
imported for the production or processing of goods for export under contracts
signed with foreign parties; goods and services traded between foreign
countries and non-tariff areas and between non-tariff areas.
21. Technology transfer under
the Law on Technology Transfer; transfer of intellectual property rights under
the Law on Intellectual Property; computer software.
22. Gold imported in the form of
bars or ingots which have not yet been processed into fine-art articles,
jewelries or other products.
23. Exported products which are
unprocessed mined resources or minerals as prescribed by the Government.
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25. Goods and services of
business individuals who have a monthly income lower than the common minimum
salary level applicable to domestic organizations and enterprises.
Establishments trading in
non-taxable goods or services specified in this Article are not entitled to
input value-added tax credit or refund, except the cases subject to the tax
rate of 0% specified in Clause 1, Article 8 of this Law.
Chapter II
TAX BASES AND TAX
CALCULATION METHODS
Article 6.-
Tax bases
Value-added tax bases include
taxable price and tax rate.
Article 7.-
Taxable price
1. The taxable price is
specified as follows:
a/ For goods and services sold
by business establishments, the taxable price is the selling price exclusive of
value-added tax. For excise tax-liable goods and services, the taxable price is
the selling price inclusive of excise tax but exclusive of value-added tax;
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c/ For goods and services used
for barter, internal consumption or donation, the taxable price is the price
for calculating value-added tax on goods and services of the same or equivalent
kinds at the time of barter, consumption or donation;
d/ For asset lease, the taxable
price is the rent exclusive of value-added tax;
In case of asset lease for which
rents are paid periodically or in advance for a certain lease duration, the
taxable price is the rent paid periodically or in advance, exclusive of
value-added tax;
In case of hiring foreign
machinery, equipment or means of transport which cannot be manufactured at home
for sublease, the taxable price excludes the rent payable to the foreign party;
e/ For goods sold by mode of
installment or deferred payment, the taxable price is the lump-sum selling
price of such goods, exclusive of value-added tax, excluding the interest on
installment or deferred payment;
f/ For goods processing, the
taxable price is the processing remuneration exclusive of value-added tax;
g/ For construction and
installation activities, the taxable price is the value of the handed-over
work, work item or job, exclusive of value-added tax. If construction or
installation activities do not cover materials, machinery or equipment, the
taxable price is the construction or installation value, excluding the value of
materials, machinery or equipment;
h/ For real estate trading, the
taxable price is the real estate-selling price exclusive of value-added tax,
excluding the charge for transferring land use rights or the land rent
remittable into the state budget;
i/ For commission-enjoying goods
or service trading agency and brokerage, the taxable price is the commission on
these activities, exclusive of value-added tax;
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Price
exclusive of value-added tax
=
Payment
price
1
+
goods
or service tax rate (%)
2. Taxable prices of goods and
services specified in Clause 1 of this Article include surcharges and
additional charges to be enjoyed by business establishments.
3. Taxable prices are determined
in Vietnam dong. In case taxpayers have foreign currency turnover, such
turnover must be converted into Vietnam dong at the average exchange rate on
the inter-bank foreign currency market, announced by the State Bank of Vietnam
at the time turnover is generated, for the determination of taxable prices.
Article 8.-
Tax rates
1. The tax rate of 0% applies to
exported goods and services, international transportation and goods and
services not liable to value-added tax specified in Article 5 of this Law upon
exportation, except cases of transfer of technologies or intellectual property
rights abroad; offshore reinsurance services; credit provision, capital
transfer and derivative financial services; post and telecommunications
services; and exported products which are unprocessed mined resources and
minerals specified in Clause 23, Article 5 of this Law.
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a/ Clean water for production
and daily life;
b/ Fertilizers; ores for
fertilizer production; insecticides, pesticides and plant and animal growth
stimulators;
c/ Feeds for cattle, poultry and
other domestic animals;
d/ Services of digging,
embanking and dredging canals, ditches, ponds and lakes for agricultural
production; growing, tending, and preventing pests and insects for, plants;
preliminary processing and preservation of agricultural products;
e/ Unprocessed cultivation,
husbandry and fishery products, except products specified in Clause 1, Article
5 of this Law;
f/ Preliminarily processed
rubber latex; preliminarily processed turpentine; nets, main ropes and fibers
for making fishing-nets;
g/ Fresh and live food;
unprocessed forest products, except timber, bamboo shoots and products
specified in Clause 1, Article 5 of this Law;
h/ Sugar; by-products in sugar
production, including molasses, bagasse and sludge;
i/ Products made of jute, rush,
bamboo, leaf, straw, coconut husks and shells and Eichhornia crassipes, and
other handicrafts made of agricultural raw materials; preliminarily processed
cotton; paper for newspaper printing;
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k/ Medical equipment and
instruments; medical cotton and bandage; preventive and curative medicines;
pharmaco-chemistry products and pharmaceuticals used as raw materials for the
production of curative and preventive medicines;
l/ Teaching and learning aids,
including models, figures, boards, chalk, rulers, compasses, and equipment and
tools exclusively used for teaching, research and scientific experiments;
m/ Cultural, exhibition,
physical training and sports activities; art performances; film production;
film import, distribution and screening;
n/ Children toys; books of all
kinds, except books specified in Clause 15, Article 5 of this Law;
o/ Scientific and technological
services under the Law on Science and Technology.
3. The tax rate of 10% applies
to goods and services not listed in Clauses 1 and 2 of this Article.
Article 9.-
Tax calculation methods
Value-added tax calculation
methods include value-added tax credit method and method of calculation of tax
based directly on added value.
Article
10.- Tax credit method
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a/ The payable value-added tax
amount according to the tax credit method is the output value-added tax amount
minus the creditable input value-added tax amount;
b/ The output value-added tax
amount is the total amount of value-added tax on sold goods and services
indicated in the added-value invoice;
c/ The creditable input
value-added tax amount is the total value-added tax amount indicated in the
added-value invoice on goods or service purchase and the document proving the
payment of value-added tax on imported goods, and must satisfy the conditions
specified in Article 12 of this Law.
2. The tax credit method applies
to business establishments which fully observe regulations on accounting,
invoices and documents as prescribed by the law on accounting, invoices and
documents, and register to pay tax according to the tax credit method.
Article
11.- Method of calculation of tax based directly on added value
1. The method of calculation of
tax based directly on added value is specified as follows:
a/ The payable value-added tax
amount according to the method of calculation of tax based directly on added
value is the added value of sold goods or services multiplied by the
value-added tax rate;
b/ The added value is the
selling price of goods or services minus the purchase price of such goods or
services.
2. The method of calculation of
tax based directly on added value applies to the following cases:
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b/ Gold, silver and gem trading
activities.
Chapter
III
TAX CREDIT AND REFUND
Article
12.- Input value-added tax credit
1. Business establishments which
pay value-added tax according to the tax credit method are entitled to input
value-added tax credit as follows:
a/ Input value-added tax on
goods or services used for the production or trading of goods or services
subject to value-added tax may be wholly credited;
b/ For goods or services used
for the production and trading of goods or services both subject and not
subject to value-added tax, only the amount of input value-added tax on goods
or services used for the production and trading of goods or services subject to
value-added tax is creditable. The input value-added tax on fixed assets used
for the production and trading of goods or services both subject and not
subject to value-added tax may be wholly credited;
c/ The input value-added tax on
goods or services sold to organizations or individuals that use humanitarian or
non-refundable aid capital may be wholly credited;
d/ The input value-added tax
arising in a month shall be declared and credited upon the determination of the
payable tax amount of that month. In case a business establishment detects
errors in the declared or credited input value-added tax amount, additional
declaration and credit may be conducted; the maximum time limit for additional
declaration and credit is 6 months from the time of detecting errors.
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a/ Having an added-value invoice
on goods or service purchase or a document proving the payment of value-added
tax at the stage of importation;
b/ Having a via-bank payment
document of purchased goods or services, except goods or services valued at
under twenty million Vietnam dong upon each time of purchase;
c/ For exported goods and
services, apart from the conditions specified at Points a and b of this Clause,
the business establishment must also have a contract signed with a foreign
party on goods sale or processing or service provision, a goods or service sale
invoice, a via-bank payment document and a customs declaration.
Payment for exported goods or
services by clearing between exported goods or services and imported goods or
services or paying debts on behalf of the State is regarded as via-bank
payment.
Article
13.- Cases eligible for tax refund
1. Business establishments which
pay value-added tax according to the tax credit method are entitled to
value-added tax refund if, for three or more consecutive months, they have some
input value-added tax amount not yet fully credited.
Business establishments having
registered to pay value-added tax according to the tax credit method are
entitled to tax refund if they have new investment projects and some amount of
value-added tax on purchased goods or services used for investment not yet
fully credited and the remaining tax amount of two hundred million Vietnam dong
or more.
2. Business establishments which
export goods or services in a month are entitled to value-added tax refund on a
monthly basis if they have a non-credited input value-added tax amount of two
hundred million Vietnam dong or more.
3. Business establishments which
pay value-added tax according to the tax credit method are entitled to
value-added tax refund if upon ownership transformation, enterprise
transformation, merger, consolidation, separation, split, dissolution,
bankruptcy or operation termination, they have an overpaid value-added tax
amount or have some input value-added tax amount not yet fully credited.
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Article
14.- Invoices and documents
1. Goods and service purchase
and sale must be accompanied by invoices and documents according to law and the
following regulations:
a/ Business establishments which
pay value-added tax according to the tax credit method shall use added-value
invoices; such an invoice must be filled in fully and properly, displaying all
surcharges and additional charges (if any). In case value-added tax-subject
goods or services are sold with added-value invoices that do not indicate
value-added tax amounts, the output value-added tax shall be determined to be
the payment price indicated in the invoice multiplied by the value-added tax
rate, except cases specified in Clause 2 of this Article;
b/ Business establishments which
pay tax according to the method of calculation of tax based directly on added
value shall use sale invoices.
2. For stamps and tickets which
are payment documents pre-printed with payment prices, those prices are
inclusive of value-added tax.
Chapter IV
IMPLEMENTATION
PROVISIONS
Article
15.- Implementation effect
1. This Law takes effect on
January 1, 2009.
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a/ The 1997 Law on Value-Added
Tax;
b/ Law No. 07/2003/QH11 Amending
and Supplementing a Number of Articles of the Law on Value-Added Tax;
3. To annul Article 2 of Law No.
57/2005/QH11 Amending and Supplementing a Number of Articles of the Law on
Excise Tax and the Law on Value-Added Tax.
Article
16.- Implementation guidance
The Government shall detail and
guide the implementation of Articles 5, 7, 8, 12 and 13 and other necessary
contents of this Law to meet management requirements.
This Law was passed on June 3,
2008, by the XIIth National Assembly of the Socialist Republic of Vietnam at
its third session.
CHAIRMAN OF THE
NATIONAL ASSEMBLY
Nguyen Phu Trong
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