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THE MINISTRY OF FINANCE
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SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No:
107/1999/TT-BTC
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Hanoi, SEPTEMBER 1, 1999
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CIRCULAR
GUIDING THE ACCOUNTING OF VALUE ADDED TAX
(VAT) ON FINANCIAL RENTING ACTIVITIES
Based on Circular No. 49/1999/TT-BTC of May 6,
1999 of the Ministry of Finance guiding the application of the Law on Value
Added Tax (VAT) to financial leasing activities, the Ministry of Finance hereby
guides the accounting of VAT on financial renting activities as follows:
I.
GENERAL PROVISIONS
1. This Circular shall apply to the enterprises
with financial renting activities.
2. This Circular shall not apply to:
- The enterprises with financial leasing
activities;
- Financial renting activities of credit institutions
that currently apply banking and credit institutions’ accounting
system;
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3. This Circular shall only provide guidance on
points of amendments and/or supplements. Those points which are not guided in
this Circular shall comply with current enterprise accounting regime.
II.
SPECIFIC PROVISIONS
1. For units with financial renting (with fixed
assets) for production and/or business activities which are liable to pay VAT
by tax deduction method, when receiving the financial renting fixed assets and
financial leasing service invoices from the lessor, accountant shall make
entries as follows:
+ When receiving the financial-renting fixed
assets, the accountant shall base him-/herself on financial leasing contracts
and relevant vouchers to reflect the financial-renting fixed assets value
according to the prices without input VAT (the input VAT is deductible),
writing:
Debit: Account 212 - Financial-renting fixed
assets
Debit: Account 133 - Deductible VAT
Credit: Account 342 - Long-term debts
+ At the end of the period, the accountant shall
base him-/herself on the financial-leasing service invoices and the input VAT
amount, as well as the output VAT amount, to determine the deductible input VAT
amount in the period as prescribed by the tax regime so as to determine VAT
amount to be paid in the period and the input VAT amount to be deducted in the
period, writing:
Debit: Account 3331 - VAT amount to be paid
(33311)
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2. For the units having financial-renting fixed
assets used for production and/or business of goods and/or services either
liable to VAT by direct method, or not liable to VAT, when receiving the
financial-renting fixed assets, the accountant shall base him-/herself on the
financial renting contracts and relevant vouchers to reflect financial-renting
fixed assets value according to the prices with VAT (input VAT is not
deductible), writing:
Debit: Account 212 - Financial-renting fixed
assets
Credit: Account 342 - Long-term debts
3. Basing him-/herself on the financial leasing
service invoices in each period, the accountant shall determine the amount to
be paid to the lessor in the period, thereby to calculate and determine the
rentals interest amount to be paid in the period, due long-term debts, writing:
Debit: Account 342 - Long-term debts (Total
rentals amount to be paid in the period minus (-) rentals interest amount to be
paid)
Debit: Account 642 - Enterprise management
expenses (Rentals interest amount to be paid in the period)
Credit: Account 315 - Due long-term debts (Total
rentals amount to be paid in the period)
+ When paying the fixed assets rentals to the
lessor, writing:
Debit: Account 315 - Due long-term debts
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4. Fees for committing to use capital to be paid
to the lessor, writing:
Debit: Account 642 - Enterprise management
expenses
Credit: Account 342 - Long-term debts
Credit: Accounts 111, 112
5. At the end of the period, the accountant
shall deduct financial-renting fixed assets depreciation into the production
and/or business costs as prescribed, writing:
Debit: Accounts 627, 641, 642, ...
Credit: Account 2142 - Renting fixed assets
depreciation
6. When returning the financial-renting fixed
assets to the lessor, the accountant shall reflect the reduction of
financial-renting fixed assets value, writing:
Debit: Account 214 - Fixed assets depreciation
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7. In cases where the financial-renting
contracts stipulate that the lessee only rents part of the property value then
repurchases such property, when the property ownership right is transferred,
the accountant shall reflect the reduction of financial-renting fixed assets
and the increase of tangible fixed assets owned by the enterprise, writing:
Debit: Account 211 - Tangible fixed assets
Credit: Account 212 - Financial-renting fixed
assets
And at the same time writing the conversion of
depreciation value:
Debit: Account 2142 - Renting fixed assets
depreciation
Credit: Account 2141 - Tangible fixed assets
depreciation
8. In cases where money must be additionally
paid for the repurchase of fixed assets, the accountant shall, together with
inscribing the conversion of the financial-renting fixed assets into the
enterprise-owned fixed assets (by 2 above-said entries), have to reflect the
value increase of the repurchased fixed assets, basing him-/herself on final
financial leasing service invoices and relevant vouchers, writing:
Debit: Account 211 - Tangible fixed assets
Credit: Accounts 111, 112, ...
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1. This Circular takes effect as from the
effective date of Circular No. 49/1999/TT-BTC of May 6, 1999 of the Ministry of
Finance. The earlier regulations which are contrary to those in this Circular
are now annulled.
2. Any problems arising in the course of
implementation shall be reported by the units to the Ministry of Finance for
study and settlement.
FOR THE MINISTER OF FINANCE
VICE MINISTER
Tran Van Ta