Công văn 1762/CT-TTHT thuế giá trị gia tăng hàng hóa để khuyến mại cho tặng khách hàng Hồ Chí Minh 2016

Dear Daikin Air Conditioning (Vietnam) Joint Stock Company (Daikin Vietnam JSC for short)

Address: 14^th-15^th Floor, Nam A Building, 201 - 203 Cach Mang Thang 8 street, ward 4, district 3
TIN: 0301450108

In reply to the Letter of Inquiry No. E1201/A7A-CV dated January 14, 2016 from Daikin Vietnam JSC about tax policies, HCMC Tax Department gives the following instructions:

Pursuant to the Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance, providing instructions about value-added tax (VAT):

+ Clause 5 of Article 7 lays down taxable prices:

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.

+ Clause 5 of Article 14 lays down input VAT deduction rules:

“Input VAT on the goods (whether purchased externally or produced by the taxpayer) used as gifts; used for the purpose of sales promotion or advertising in any form; or used in the manufacture and trading of goods or services subject to VAT, may be deducted.”

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“b) Sellers must issue invoices for goods and services, including those used for sales promotion, advertising and as samples; goods and services used for donation, exchange, or paid as salaries for employees and those that are used internally (except for goods circulated internally to proceed with production).

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Pursuant to Article 4 in the Circular No. 96/2015/TT-BTC dated June 22, 2015 on amendments and supplements to Article 6 in the Circular No. 78/2014/TT-BTC dated June 18, 2014, providing guidance on corporate income tax (CIT), on classification of deductible and non-deductible expenses used in determination of taxable income:

“Article 6. Deductible and non-deductible expenses used when calculating taxable income

1. Except the non-deductibles specified in clause 2 of this Article, enterprises may claim deduction for any expense fully meeting the following conditions:  

a) Such expense is actually incurred from their business and production activities.

b) Such expense is fully invoiced or documented as required by law.

c) If the invoice value of each payment of the expense incurred from purchase of goods and services is at least VND 20 million (inclusive of VAT), the proof of non-cash payment is required.

The proof of non-cash payment shall be subject to regulations laid down in legislative documents on value-added tax.

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According to the aforesaid regulations, if Daikin Vietnam JSC runs any sales promotion program by using its goods as promotional items, sample products, advertisements, donations or gifts offered to its customers in accordance with commercial law, Daikin Vietnam JSC must issue the invoice for these goods, specifying the description and quantity of items; clearly noting that these goods are used as promotional items, sample products, advertisements, donations or gifts presented to its customers; filling in data fields, such as unit price; amount; subtotal; total written in number zero (0); tax rate; VAT amount (drawing a cross if not available); input VAT on promotional goods, and may claim tax deduction for these invoiced goods (as long as prescribed requirements for eligibility for input tax deductions are fully satisfied). With respect to promotional items other than those stipulated in commercial law, Daikin Vietnam JSC is obliged to issue invoices in which VAT amount payable is declared and calculated like sale invoices to customers. In reference to these output VAT invoices, Daikin Vietnam JSC is not entitled to input VAT deductions. 

If Daikin Vietnam JSC buys several goods like raincoats, bags, umbrellas, USBs, etc. with its logo for use as presents to its customers who are not bound to purchase its goods or services in return for these presents, it must issue VAT invoices as a basis for calculation and payment of VAT, but not need to determine sales subject to CIT, in which case Daikin Vietnam JSC is allowed to include expenses for purchase of goods used as gifts to its customers in deductibles when determining income subject to CIT (as long as these expenses fully meet prescribed conditions for eligibility for being included in deductibles).

If Daikin Vietnam JSC incurs any expense for its customers' visits to its factories abroad which is not related to its production and business activities, such expense cannot be charged into deductibles in the process of determining income subject to CIT.

HCMC Tax Department is requesting you to comply with regulations laid down in legislative documents referred to herein.

PP. DIRECTOR
DEPUTY DIRECTOR




Tran Thi Le Nga