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THE COUNCIL OF MINISTERS
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SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom – Happiness
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No.
351-HDBT
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Hanoi, October 2, 1990
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DECREE
ON
TURNOVER TAX
THE COUNCIL OF MINISTERS
Pursuant to the Law on the Organization of the Council of Ministers dated
4 July 1981;
Pursuant to the Law on Turnover Tax;
Pursuant to the Resolution of the State Council No. 270B-NQ-HDNN8 dated 8
August 1990 regarding the proclamation and implementation of the Law on
Turnover Tax, the Law on Special Sales Tax and the Law on Profits Tax;
DECREES:
Chapter I
SCOPE OF APPLICATION
Article 1
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Article 2
The following business shall not
be subject to turnover tax:
1. Agricultural production which
is subject to agricultural tax.
2. The production of commodities
which are subject to special sales tax.
3. Production of goods for
export.
Chapter II
BASIS OF CALCULATION OF TURNOVER TAX
Article 3
The amount of turnover in
respect of which tax is to be paid shall be the total revenue earned: from
sales; pursuant to sub-contract; as commissions on sales; or for services
provided: during the tax period and after the taxpayer has made the sales,
performed the sub-contract, earned the commission or provided the services, as
described in article 8 of the Law on Turnover Tax, prior to any deductions
being made for costs incurred and regardless of whether the taxpayer has actually
received the revenue.
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2. Turnover from construction
shall be the amount paid or payable upon completion of construction and any
payments for repairs and the provision of building services.
3. Turnover from transportation
shall be fees paid for the transport of commodities, passengers, cargo and
other items.
4. Turnover from commerce shall
be all proceeds from the sale of goods including those internally consumed.
5. Turnover from the provision
of services shall be fees received for those services including labour costs,
raw materials, spare parts, if any, and other expenses:
(a) Turnover from post and
telecommunication services shall be revenue received from postage charges
(including the sale of postage stamps) and from all other business activities
and services provided.
(b) Turnover from banking and
finance shall be all interest paid by borrowers, service fees and other bank
charges.
(c) Turnover from property
leasing shall be all rents and other payments received.
6. Schools and educational
training establishments which produce goods outside the scope of their normal
activities shall also be liable to pay the turnover tax which is applicable to
the particular activity concerned.
A school which requires funds
for the purposes of maintenance and improvement of its facilities and
equipment, may submit a proposal which accords with the plans of its own
branches or locality. The proposal shall be considered by the finance office
which, in the event that it deems it appropriate, may make funds available to
the school from State Revenue.
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Article 4
In accordance with the
provisions of article 9 of the Law on Turnover Tax, the Council of Ministers
shall delegate to the Ministry of Finance the task of determining the turnover
tax rates to be applied to turnover to which the Law on Turnover Tax applies.
Where a manufacturer but for
this provision would be liable to pay tax on the basis of its type of business
and raw materials used and also on the basis of the purpose of its products,
the manufacturer shall only be liable to pay tax on the latter basis.
Article 5
Where a business establishment
conducts a number of different economic activities to which different rates of
turnover tax apply, those establishments shall pay turnover tax in accordance
with the individual rates which apply to each separate activity. Where establishments
are unable separately to calculate the turnover which arises from each separate
activity, then the highest applicable tax rate shall be applied to the whole
turnover of the establishment.
Chapter III
REGISTRATION, DECLARATION AND
PAYMENT OF TURNOVER TAX
Article 6
Each business establishment
shall register at the tax office closest to its place of business in accordance
with paragraph 1 of article 10 of the Law on Turnover Tax.
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Article 7
Each business establishment
shall maintain full and proper books of account in accordance with the
provisions of the Ordinance on Accounting and Statistics dated 10 May 1988, and
shall keep all books, receipts, and other documents in relation to the receipt
of revenue from the supply of goods and services in accordance with all
relevant provisions as may be in force from time to time.
Article 8
The Ministry of Finance shall
issue all vouchers to be used by all establishments operating in the country.
Article 9
A business establishment shall,
upon request made by a tax office for the production of documents and data
which relate to the calculation of turnover tax:
1. Provide all necessary
documents and data within the time required.
2. Provide explanations for all
unclear entries in its declaration, books of account, records and vouchers.
A business establishment is not
permitted to refuse, upon the demand of the tax office, to produce or explain
any of the information referred to above on the basis of confidentiality or
sensitivity of information.
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Article 10
Turnover tax shall be paid
periodically or monthly within the time determined by the tax office for each
establishment. In each case payment shall be made no later than on the
fifteenth day of the month following that in respect of which the payment is
due.
Each small household business
establishment shall pay tax on turnover at the end of each month on the date
stipulated by the tax office.
Article 11
Where a business establishment
operating within an approved fixed area, sells goods outside that area and pays
turnover tax on the goods of that trading lot, it shall not be obliged to pay
further turnover tax at its approved fixed area of business.
Chapter IV
REDUCTIONS OF AND EXEMPTIONS
FROM TURNOVER TAX
Article 12
Consideration for exemption from
or reduction of turnover tax shall take place as follows:
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(a) The elderly and disabled.
(b) Small traders who trade only
in order to maintain a minimal living standard.
(c) Employees of the State who
are paid the minimum award wage for their services.
2. Exemptions from, or
reductions of, turnover tax shall be considered in respect of business
establishments which suffer losses as a result of natural disasters, war, and
other contingencies.
(a) Particular consideration
shall be given where the value of losses incurred is between twenty (20) per
cent and fifty (50) per cent of the establishment's expected taxable turnover
for the year.
Any proposed reduction shall be
considered by a tax office at the provincial level and in the event that it is
approved, the reduction shall be for an amount which is proportionate to the
loss incurred.
(b) Where the value of the
losses incurred is greater than fifty (50) per cent of the establishment's
expected turnover for the year, the consideration for tax exemption or
reduction shall be undertaken by the General Department of Taxation.
Article 13
The following shall not, for the
time being, be subject to turnover tax.
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Provincial people's committees
shall also consider and make decisions regarding the reduction of or exemption
from turnover tax for certain important businesses managed by the local
authority, particularly those located in mountainous regions and encountering
difficulties, which are in need of State support in order to maintain their operations.
The Ministry of Finance shall
make regulations on the reductions of and exemptions from turnover tax in
respect of institutes, stations and farms performing general research and
testing and farms breeding animals for the purpose of such research and
testing, in order to reduce the amount of public funds allocated for scientific
research.
Chapter V
FINAL PROVISIONS
Article 14
The Council of Ministers shall
issue separate rules for rewards for tax offices and individual tax officers
who satisfactorily carry out their assigned duties and discover breaches of the
Law on Turnover Tax.
Article 15
All regulations previously in
force in respect of enterprise tax, tax to be paid on trade in lots, and the
State tax collection system shall no longer be of effect.
Article 16
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State owned enterprises, which
have not yet transferred their capital and assets, shall continue to make all
payments in accordance with the State tax system, by deducting the amount to be
paid from profits, until the transfer of capital and assets is complete, which
shall be no later than 31 December 1990.
Article 17
The Minister of Finance shall
provide all assistance necessary for the implementation of this Decree.
FOR THE COUNCIL OF MINISTERS
VICE CHAIRMAN
Vo Van Kiet