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THE
GOVERNMENT
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No.
158/2003/ND-CP
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Hanoi,
December 10, 2003
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DECREE
DETAILING THE IMPLEMENTATION OF THE VALUE ADDED TAX LAW AND
THE LAW AMENDING AND SUPPLEMENTING A NUMBER OF ARTICLES OF THE VALUE ADDED TAX
LAW
THE GOVERNMENT
Pursuant to the December 25,
2001 Law on Organization of the Government;
Pursuant to May 10, 1997 Value Added Tax Law No. 02/1997/QH9 and June 17,
2003 Law No. 07/2003/QH11 Amending and Supplementing a Number of Articles of
the Value Added Tax Law;
At the proposal of the Minister of Finance,
DECREES:
Chapter I
GENERAL PROVISIONS
Article 1.-
Value added tax is a tax calculated on the added value of goods or services
arising in the process of from production, circulation to consumption.
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Article 3.-
Value added tax payers include organizations and individuals that produce goods
and/or provide services subject to value added tax in Vietnam, irrespective of
their business lines, forms and organization (hereinafter called the business
establishments) as well as other organizations and individuals that import
goods and/or purchase services, which are subject to value added tax, from
foreign countries (hereinafter called the importers).
Article 4.-
Objects not subject to value added tax include:
1. Products of cultivation
(including products from planted forests) and husbandry; cultured and fished
aquatic and marine products, which have not yet been processed into other
products or have been just commonly preliminarily processed and sold by
producing or fishing organizations and/or individuals themselves.
Products which have been just
commonly preliminarily processed as prescribed in this Clause are those which
have been just dried, frozen, cleaned or peeled, but not yet processed at a
higher degree or processed into other products.
2. Products being animal breeds
or plant varieties, including eggs, breeds, saplings, seeds, sperms, germs and
genetic materials at the stages of culture, importation and commercial
operation.
3. Salt products made from
seawater, natural rock salt, refined salt, iodized salt.
4. Equipment, machinery and
special-use transport means in technological chains, and construction supplies
which cannot be produced at home and need to be imported for the formation of
enterprises’ fixed assets; equipment, machinery, supplies and transport means
which cannot be produced at home and need to be imported for direct use in
scientific research and technological development activities; aircraft,
derricks and ships hired from foreign countries for use in production and
business, which cannot be produced at home; equipment, machinery, spare parts,
special-use transport means and supplies which cannot be produced at home and
need to be imported for activities of prospecting, exploring and developing oil
and gas fields.
In cases where the
establishments import equipment and machinery chains in complete sets, which
are not subject to value added tax, but such complete chains include equipment
and machinery which can be produced at home, the whole complete equipment and
machinery chains shall not be subject to value added tax.
To assign the Ministry of
Planning and Investment to assume the prime responsibility for, and coordinate
with the concerned ministries and agencies in, promulgating the list of
equipment, machinery, spare parts, special-use transport means and construction
supplies which can be produced at home for use as basis for distinguishing them
from those which cannot be produced at home and need to be imported and are not
subject to value added tax as prescribed in this Clause.
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5. State-owned dwelling houses
sold by the State to current tenants.
6. Transfer of land use right.
7. Credit services and
investment funds, including capital lending activities; loan guarantee;
discount of negotiable instruments and valuable papers; sale of loan security
assets for debt retrieval, financial leasing by Vietnam-based financial and
credit institutions; capital transfer activities and securities trading
activities.
8. Life insurance; insurance for
school pupils; insurance for domestic animals and cultivation plants, and
non-commercial insurance.
9. Medical examination and
treatment, prophylactic and human healthcare services, and veterinary services.
10. Cultural, exhibition as well
as physical training and sport activities of mass movement nature, physical
training and competition activities free of charge or with charges but not for
commercial purposes.
Art performance activities such
as song and dance, music shows, drama, circus and other art performance
activities; art show organization services; production of films of various
kinds.
Import, distribution and
projection of motion pictures and video documentaries: for motion pictures,
regardless of themes and types; for films recorded on video tapes and discs,
only newsreels, reportage and scientific films.
11. Teaching and job-training
activities, including general education, foreign language and informatics
teaching, and training of other jobs.
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13. Publication, import and
distribution of newspapers, magazines, specialized news bulletins, political
books, textbooks (including those in form of audio or video tapes or discs and those
recorded with electronic data), course books, books of legal documents,
scientific and technical books, books in ethnic minority languages, propaganda
and mass mobilization paintings, pictures and posters; money printing.
14. Public services of sanitation
and water drainage on streets and in residential quarters; maintenance of zoos,
flower gardens, parks, street greenery and public lighting; funeral services.
15. Maintenance, repair and
construction of cultural, art and public welfare works, infrastructure and
houses of gratitude with funds contributed by people or from humanitarian aids,
including cases where the State partially provides support capital of no more
than 30% of the actual total costs of such works.
16. Public passenger
transportation by bus or tramcar in service of people’s travel within inner
cities and industrial parks or between urban centers and neighboring industrial
parks at uniform fare rates set by competent bodies.
17. The State’s basic surveys
funded with the State budget, including geological and mineral surveys and
exploration; water resources, measuring and mapping, hydro-meteorological and
environmental surveys.
18. Water irrigation and
drainage in service of agricultural production; clean water exploited by
organizations or individuals themselves in mountainous, island, deep-lying and
remote areas in service of daily life in such areas.
19. Weapons and military
equipment for exclusive use in service of national defense and/or security,
specified jointly by the Ministry of Finance, the Ministry of Defense and/or
the Ministry of Public Security. For weapons and military equipment purchased
or manufactured with the State budget capital source, the tax exemption must be
specified in the budget estimates.
20. Goods imported in the
following cases: humanitarian aid and non-refundable aid goods; gifts for State
agencies, political organizations, socio-political organizations, social
organizations, socio-professional organizations and people’s armed force units;
gifts and donations for individuals in Vietnam within the limits set by the
Government; foreign organizations’ and individuals’ personal effects under
diplomatic-immunity quotas; belongings within the duty-free luggage limits;
personal effects of overseas Vietnamese brought along upon their returns to the
country.
Goods sold to international
organizations or foreigners for use as humanitarian aid or non-refundable aid
to Vietnam.
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22. International
transportation; goods and services directly supplied for international
transportation and re-insurance services to foreign countries.
International transportation
includes passenger and cargo transportation from Vietnam to foreign countries
in various forms.
Goods and services supplied for
international transportation mean goods and services directly sold by
Vietnam-based business establishments to Vietnamese and foreign international
transport means for direct use for international transport means’ activities
according to the Finance Ministry’s regulations.
23. Technology transfer under
the provisions of Chapter III of the Civil Code of the Socialist Republic of
Vietnam. For contracts on technology transfer accompanied by transfer of
machinery and equipment, the tax exemption shall apply only to the value of the
transferred technologies; computer software, except for export computer
software.
24. Post, telecommunications and
Internet services universalized under the Government’s programs.
25. Gold imported in form of
ingots or pieces and gold of various kinds not yet processed into fine-art
articles, jewelry or other products. Gold in form of ingots or pieces and
unprocessed gold of various kinds which are defined in accordance with
international regulations.
26. Export products which are
mineral resources exploited but not yet processed into other products and
specified as follows:
- Crude oil;
- Stone slabs, sand, rare earth;
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- Manganese, tin, iron,
chromite, emenhite and apatite ores.
The Ministry of Finance shall
coordinate with the Ministry of Natural Resources and Environment and relevant
agencies in basing themselves on the State’s requirements on natural resource
and mineral management in each period to submit to the Government for
adjustment the list of mineral resources of various kinds prescribed in this
Clause.
27. Products being artificial
parts used for substitution of diseased people’s organs; crutches, wheelchairs
and other tools used exclusively for the disabled;
28. Goods and services of
business individuals with a monthly average income level lower than the minimum
wage level prescribed by the State for State employees. Such income shall be
determined to be the turnover minus reasonable expenses for business activities
of such business individuals.
Business establishments shall
not be entitled to the deduction and reimbursement of input value added tax on
goods and services used for production and/or trading of goods and services not
subject to value added tax prescribed in this Article, but shall have to calculate
it into the value of goods and services, fixed assets’ original prices or
business expenditures.
Chapter II
TAX CALCULATION BASES
AND METHODS
Article 5.-
The bases for calculating value added tax are the tax calculation prices and
tax rates.
Article 6.-
The value added tax calculation prices are prescribed as follows:
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2. For import goods and services
purchased from organizations or individuals overseas:
a/ For import goods, they shall
be the border-gate import prices plus (+) import tax (if any) plus (+) special
consumption tax (if any). The border-gate import prices shall be determined
according to the regulations on import tax calculation prices;
b/ For services purchased from
organizations or individuals overseas, they shall be the prices paid to such
foreign organizations or individuals, not yet including the value added tax.
3. For goods and services used
for exchange or internal consumption (except for cases where goods and services
are internally transferred for continuing the production/business process and
not subject to the value added tax), gifts and donations, they shall be the
value added tax calculation prices of goods or services of the same or
equivalent kinds at the time such activities are conducted.
4. For property leasing
activities, irrespective of kinds of property and leasing forms, they shall be
the leasing prices exclusive of tax. In cases where the rental is paid in
installments or in advance for a certain leasing duration, they shall be such
rental exclusive of value added tax, paid in installments or in advance.
For cases of renting foreign
derricks, machinery, equipment and/or transport means which cannot be produced
at home for sub-lease, the tax calculation prices shall exclude the rentals to
be paid to foreign countries.
5. For goods sold by mode of
installment payment, they shall be the non-tax sale prices of such goods, paid
in lump sum (excluding the installment payment interests), but not calculated
according to the amount of money paid in each installment.
6. For goods processing, they
shall be the non-tax processing prices (including remuneration, fuel, power,
auxiliary materials and other processing expenses).
7. For construction and
installation activities, they shall be the non-tax construction or installation
prices of projects, project items or work volume completed; in cases where the
project construction or installation is paid according to the unit prices,
project item volumes or work volumes completed and handed over, the value added
tax shall be calculated on the value of the completed and handed-over volumes.
In cases where construction and installation also involve the supply of raw
materials, materials and machinery, the value added tax calculation prices
shall include also the value of such raw materials, materials and machinery. In
cases where construction and installation do not involve the supply of raw
materials, materials and machinery, the value added tax calculation prices
shall be the construction or installation value excluding the value of raw
materials, materials, machinery and equipment.
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For activities of investment in
infrastructure for lease, the tax calculation prices shall exclude (-) the land
rentals to be paid to the State budget.
8. For real-estate dealing
activities, the value added tax calculation prices shall exclude (-) the land
prices as prescribed to determine the land-use levies payable to the State
budget or the compensation money when the State recovers land at the time the
real estates are sold.
9. For goods and services
sale/purchase agency or brokerage activities with commissions, the non-tax
prices serving as tax calculation bases shall be the commissions earned from
such activities.
10. For particular goods and
services entitled to the use of payment vouchers in which the inscribed payment
prices are the prices inclusive of the value added tax, the non-tax prices
serving as tax calculation bases shall be the prices inclusive of tax divided
by [1 + tax rates (%) of such goods or services].
The tax calculation prices of
goods and/or services defined in this Article shall also include additional
levies and surcharges enjoyed by the business establishments.
The Ministry of Finance shall
provide specific guidance on the value added tax calculation prices of goods
and services specified in this Article.
Article 7.-
Value added tax rates
1. The tax rate of 0% shall
apply to export goods and services, including also goods processed for export,
as well as export goods and services not subject to value added tax.
a/ Export services are those
directly provided to foreign-based organizations and individuals and consumed
outside the Vietnamese territory.
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c/ The following cases shall not
be subject to the value added tax rate of 0%:
- International transportation;
goods and services directly supplied for international transportation; tour
services to foreign countries; reinsurance services to foreign countries;
credit services, financial investment and securities investment to foreign
countries; export products being unprocessed exploited mineral resources
prescribed in Clause 26, Article 4 of this Decree, which are not subject to
value added tax.
- Goods and services sold to
export-processing enterprises and export-processing zones, including insurance,
banking, post, telecommunications, consultancy, audit, accountancy,
transportation, loading and unloading, lease of houses, working offices,
warehouses storing yards, consumption services for individual laborers, petrol
and oil sold to transport means which are subject to value added tax at the
prescribed rates applicable to goods consumed in Vietnam.
2. The tax rate of 5% shall
apply to the following goods and services:
a/ Clean water in service of
production and daily life, except for clean water not subject to tax mentioned
in Clause 18, Article 4 of this Decree and assorted beverages subject to the
tax rate of 10%.
b/ Fertilizers, ores for
fertilizer production; insecticides as well as domestic animal and plant growth
stimulants.
c/ Medical special-use
equipment, machinery and instruments; medical cotton and bandage; curative and
preventive medicines; chemical-pharmaceutical products and materia medica being
raw materials for the production of curative and preventive medicines.
d/ Teaching and learning aids
being models, paintings, boards, chalks, rulers and pairs of compasses as well
as equipment and instruments used exclusively for teaching, research and
testing.
e/ Printing of assorted products
not subject to value added tax, prescribed in Clause 13, Article 4 of this
Decree, except for money printing.
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g/ Cultivation and husbandry
products; fished aquatic and marine products which have not yet been processed
or have just been cleaned, frozen, dried or peeled at the stage of commercial
operation.
h/ Fresh and raw foodstuff,
food, forestry products (except for timber and bamboo shoots) not yet processed
at the stage of commercial operation, except for objects prescribed in Clause
1, Article 4 of this Decree.
Food includes paddy, rice,
maize, sweet potato and manioc; wheat, rice flour, maize powder, sweet potato
powder, manioc powder, wheat flour.
Fresh and raw foodstuffs are
those which have not yet been processed or have just been preliminarily
processed.
Unprocessed forestry products
are those exploited from natural forests belonging to the groups of rattan,
bamboo, mushrooms, Jew’s ears; roots, leaves, flowers, medicinal plants and
forestry products of other kinds.
i/ Sugar; by-products in sugar
production, including molasses, bagasse, sludge.
j/ Products made of jute, rush,
bamboo and leaves, which are those produced or processed from main raw
materials belonging the groups of jute, rush, bamboo, rattan, fan-palm,
coconut.
k/ Cotton preliminarily
processed from home-grown cotton, which is shelled, seeded and classified.
l/ Feeds for cattle, poultry and
other domestic animals.
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n/ Services in direct service of
agricultural production, including such activities as plowing, raking soil for
agricultural production; digging, embanking and dredging canals, ditches, ponds
and lakes in service of agricultural production; rearing, planting, tending and
farming products, preventing insects and diseases; harvesting, preliminary
processing and preservation of agricultural products.
o/ Pit-coal, soil, stone, sand,
gravel.
p/ Base chemicals; mechanical
products (except for consumer mechanical products); molds of various types;
explosive materials; grinding stones; newsprint; insecticide sprayers;
preliminarily processed rubber latex; artificial plywood; industrial concrete
products, including concrete bridge girder, concrete house beams and frames,
concrete piles, concrete electric poles, concrete culvert pipe, concrete boxes
of various types, non-standard prefabricated panels and reinforced concrete
structures, merchandise concrete; tires and sets of tires and inner tubes of
900-20 size or larger; neutral glass tubes (tubes and shaped cylinders); nets,
ropes and fibers for knitting fishing nets.
q/ Refined, rolled and pulled
products of ferrous metal, non-ferrous metal and precious metal, except for
import gold prescribed in Clause 25, Article 4 of this Decree.
r/ Automatic data processors and
parts as well as accessories thereof (including assorted computers and their
parts and accessories).
s/ Maintenance, repair and
restoration of historical-cultural relics and museums, except for activities
prescribed in Clause 15, Article 4 of this Decree.
t/ Transportation, loading and
unloading; dredging channels, canals, river ports and seaports; salvage and
rescue activities;
u/ Distribution and screening of
video films (except for the distribution and screening of video documentaries
prescribed in Clause 10, Article 4 of this Decree).
3. The tax rate of 10% shall
apply to the following goods and services:
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b/ Merchandise electricity sold
by electricity production/business establishments.
c/ Electronic products; consumer
mechanical products, electric items.
d/ Chemicals (except for base
chemicals prescribed at Point q, Clause 2 of this Article), cosmetics.
e/ Fibers, fabrics, garment and
embroidered products; sanitary napkin and baby’s nappy.
f/ Paper (except for newsprint prescribed
at Point q, Clause 2 of this Article) and paper products.
g/ Milk, confectionery,
beverages and other processed foodstuffs.
h/ Porcelain, china, glass,
rubber and plastic products; timber and timber products; cement, bricks, tiles
and other construction materials (except for products subject to the tax rate
of 5%).
i/ Construction and
installation; houses and technical infrastructures of establishments assigned
or leased land by the State for construction investment for business purposes.
j/ Post, telecommunications and
Internet services (except for post, telecommunications and Internet services
prescribed in Clause 24, Article 4 of this Article).
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l/ Legal consultancy services
and other consultancy services.
m/ Audit, accountancy, survey
and design services.
n/ Photo taking, printing and
enlargement; tape printing, recording and rent; videoing; photocopying.
o/ Hotel, tourism, food- and
drink-catering.
p/ Goods and services subject to
special consumption tax.
q/ Gold, silver, gems (except
for import gold prescribed in Clause 25, Article 4 of this Decree).
r/ Ocean shipping agency.
s/ Brokerage services.
t/ Other goods and services not
prescribed in Article 4 and Clauses 1 and 2 of this Article.
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Article 8.- Value
added tax calculation methods
1. Tax deduction method:
The payable value added tax
amount shall be determined as equal to the output value added tax amount minus
(-) the deductible input value added tax amount.
a/ An output value added tax
amount shall be equal to the tax calculation price of the sold taxable goods or
service multiplied (x) by the value added tax rate of such goods or service.
In cases where an establishment
sells goods or provides services, which are subject to value added tax, but
fails to specifically inscribe the non-tax sale prices and value added tax on
added value invoices, the output value added tax shall be calculated on the
sale prices of such goods or services, except for cases where added value
invoices are allowed to be inscribed with payment prices being the prices
inclusive of value added tax.
b/ Deductible input value added
tax shall be equal to the total value added tax amount inscribed in the added
value invoices for purchase of goods or services; vouchers on payment of value
added tax on import goods used for production of or trading in goods or
services subject to value added tax; vouchers on payment of value added tax on
behalf of foreign organizations or individuals as prescribed at Point f, Clause
1, Article 9 of this Decree.
c/ The tax deduction method
shall apply to all business establishments, except for those subject to the
method of direct calculation on the added value according to the provisions of
Clause 2 of this Article.
2. The method of direct
calculation on the added value:
The payable value added tax
amount shall be equal to the added value of the sold taxable goods or services
multiplied (x) by the value added tax rate applicable to such goods or
services.
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The payment prices of goods or
services purchased or sold are the actual purchase or sale prices inscribed on
the purchase or sale invoices of such goods or services, including the value
added tax and additional levies and/or surcharges enjoyed by the sellers.
The payment prices of purchased
goods or services shall be determined as equal to the value of purchased goods
or services, including the value added tax, which have been used for production
of, or trading in, sold goods or services subject to value added tax.
In cases where a business
establishment fails to effect the purchase and/or sale of goods and services
with full invoices and vouchers used as basis for determining the added value
according to the above-said regulations, the added value shall be determined as
follows:
- For business establishments
that sell goods or services with full invoices and vouchers as required, thus
accurately determining their turnover from the sale of goods or services, but
fail to sufficiently acquire purchase invoices of goods or services, the added
value shall be determined as equal to the turnover multiplied (x) by the
percentage (%) of the added value calculated on the turnover.
- For business individuals who
fail to apply or improperly apply the invoices for purchase and sale of goods
or services, the tax agencies shall base themselves on the business situation
of each business individual to fix the taxable turnovers; the added value shall
be determined as equal to the fixed turnover multiplied (x) by the percentage
(%) of the added value calculated on the turnover.
b/ The percentage (%) of the added
value calculated on the turnover used as basis for determining the added value
shall be set by the tax agencies, suitable to each business line.
The Finance Ministry shall guide
the determination of specific added value for each business line.
c/ The method of direct
calculation on the added value shall apply only to the following subjects:
-Vietnamese production/business
individuals as well as foreign organizations and individuals doing business in
Vietnam not under the Law on Foreign Investment in Vietnam, that fail to fully
meet the conditions on accounting, invoices and vouchers for use as bases for
tax calculation by the tax deduction method.
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Article 9.-
Input value added tax deduction:
1. Business establishments that
pay value added tax by the tax deduction method shall be entitled to the
deduction of input value added tax as follows:
a/ Value added tax on goods and
services purchased for production of, or trading in, goods and services subject
to value added tax shall be fully deducted.
b/ For input value added tax on
goods and services purchased for production of, or trading in, goods and
services which are subject to value added tax and which are not subject to
value added tax, only the input tax on goods and services used for production
of, or trading in, goods and services subject to value added tax shall be
deducted.
The business establishments
shall have to separately account deductible and non-deductible input tax; in
cases where they cannot do so, they shall be entitled to deduct tax according
to the percentage (%) between the taxable turnover and the total sale turnover.
c/ Deductible input tax incurred
in any month shall be declared and deducted upon the determination of the
payable tax amount of such month. The time limit for declaration shall be
within 3 months after tax incurred in a month is declared. For added value
invoices of purchased goods and services, which are over 3 months, the business
establishments must not declare and deduct tax but have to include it in the
value of goods, services, fixed assets’ original prices or business
expenditures.
Particularly for fixed assets,
if the deductible input tax amount is large, it shall be gradually deducted or
reimbursed according to the provisions of Article 15 of this Decree.
d/ To be entitled to deduction
or reimbursement of input value added tax, export goods and services must fully
satisfy the following conditions and procedures:
- Export goods declarations with
the customs offices’ certification that export procedures have been carried out
for the goods (applicable to export goods);
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- Making via-bank payment and
cases regarded as via-bank payment such as: deduction from foreign loan debts,
foreign parties authorize the third parties being foreign-based organizations
or individuals to make via-bank payment (except for cases where export is paid
in form of goods barter, debt payment for the State, labor export with money
directly collected from exporting laborers; export goods sold at overseas
fairs, exhibitions and a number of export goods and services subject to special
form of payment decided by the Prime Minister);
- Invoices of sale of goods
and/or services to foreign traders.
In cases where export goods and
services have been certified by the customs offices (for export goods) but fail
to satisfy one of the other conditions and procedures mentioned above, the
business establishments shall not be entitled to deduct the input value added
tax but have to include it in their business expenditures. The Finance Ministry
shall provide specific guidance on procedures and conditions for the
application of this case.
For business establishments that
pay value added tax by the method of direct calculation on the added value, if
they shift to pay the value added tax by tax deduction method, they shall only
be entitled to calculate and deduct input value added tax as prescribed for
invoices and vouchers made after the date the value added tax is calculated
according to the tax deduction method.
e/ For business establishments
purchasing particular goods and services from foreign business organizations
and/or individuals that pay value added tax by the tax deduction method and use
added value invoices inscribed with payment prices being the prices inclusive
of the value added tax, the prices inclusive of tax shall serve as basis for
determination of the non-tax prices and deductible input value added tax
according to the calculation method mentioned in Clause 10, Article 6 of
this Decree.
f/ In cases where establishments
do business in Vietnam and purchase goods and services from foreign
organizations and/or individuals doing business in Vietnam, that do not belong
to investment forms under the Law on Foreign Investment in Vietnam or implement
Vietnamese accounting regimes, they shall have to pay value added tax on behalf
of foreign contractors. Establishments doing business in Vietnam shall be
entitled to calculate and deduct the value added tax amount already paid on the
latter’s behalf.
2. Bases for determining the
deductible input value added tax amount prescribed above shall be as follows:
a/ For purchased goods or
services, it shall be the value added tax amount inscribed on the added value
invoices of goods or service purchase; for cases where the tax has been paid on
behalf of foreign contractors or other subjects as prescribed by law, it shall
be vouchers of the on-behalf payment of tax.
b/ For import goods, it shall be
the already paid value added tax amount inscribed on the vouchers of payment of
value added tax on import goods.
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3. Business establishments shall
not be entitled to deduct input value added tax for added value invoices used
not according to law provisions such as the use of forged invoices or vouchers
on payment of value added tax, falsely-declared invoices (goods or services are
not purchased or sold), or invoices inscribed with a value higher than the
actual value of sold goods or services.
Article
10.- Business establishments shall have to effect the purchase and sale of
goods and services with full invoices and vouchers strictly according to law
provisions. Invoices on purchase and sale of goods and services prescribed for
business establishments shall be as follows:
1. Business establishments that
pay tax by the tax deduction method shall have to use the added value invoices.
When making goods and service sale invoices, business establishments shall have
to fully and accurately fill in the items on the invoices; regarding sale
prices, they must clearly inscribe: non-tax sale prices, surcharges and charges
outside the sale prices (if any), value added tax, payment prices inclusive of
tax.
2. Business establishments that
pay tax by the method of direct calculation on the added value shall use goods
sale invoices. The sale prices of goods and services inscribed on the invoices
shall be the payment prices inclusive of the value added tax.
3. Business establishments that
use invoices and vouchers printed by themselves shall have to register the
specimens of their invoices and vouchers with the Finance Ministry (the General
Department of Tax) and may use them only after obtaining written notices of the
Finance Ministry (the General Department of Tax).
4. Business establishments that
directly retail their goods to consumers at sale prices lower than the set
prices shall have to make the added value invoices or goods sale invoices. If
they fail to make invoices, they shall have to make lists of retailed goods
according to the form set by the tax agencies for use as basis for value added
tax calculation; in cases where the purchasers request added value invoices or
goods sale invoices, they shall have to make such invoices strictly according
to regulations.
5. Business establishments that
commit acts of printing, distributing or using invoices in contravention of
regulations in order to evade tax or commit frauds in value added tax deduction
or reimbursement shall, apart from having the evaded tax amounts
retrospectively collected or reimbursed, be sanctioned for tax-related
administrative violations, if their violations are serious, they shall be
examined for penal liability according to law provisions.
Chapter III
TAX REGISTRATION,
DECLARATION, PAYMENT AND SETTLEMENT
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1. All business establishments
liable to pay value added tax prescribed in Article 3 of this Decree, including
their attached units and affiliates, shall have to register with the tax
agencies of the localities where they conduct their business activities the
business locations, business lines, existing number of laborers, capital, tax
payment places and other relevant criteria under the tax agencies’ guidance.
For newly set up establishments,
the time limit for tax registration shall be within ten days after they are
granted business registration certificates; in cases where they have not yet
been granted business registration certificates but conduct business
activities, they must register tax payment before conducting business
activities. For business establishments that have already registered tax
payment, in case of a merger, consolidation, division, splitting, change of
ownership form, dissolution, bankruptcy or change of business lines or places,
the business establishments shall also have to declare such with the tax
agencies at least 5 days before such changes are made.
2. For business establishments
that pay tax by the method of direct calculation on the added value, if they
fully meet the conditions on the regime of invoices, vouchers and accounting
books, make tax declaration and payment strictly according to regulations and
voluntarily register the application of tax calculation by the tax deduction
method, which have been examined and certified by the tax agencies, the tax
agencies shall notify such to the establishments for implementation; in the
course of implementation, if the establishments fail to strictly observe the
prescribed conditions, the tax agencies shall make notices on the suspension of
tax calculation according to the tax deduction method.
The Finance Ministry shall guide
procedures for tax registration and payment and competence to consider and
permit business establishments which are liable to pay tax by the method of
direct calculation on the added value to pay tax according the tax deduction
method prescribed in this Article.
Article
12.- Business establishments and importers shall have to make value added
tax declaration according to the following regulations:
1. Business establishments that
deal in goods and services subject to value added tax shall have to make
monthly value added tax declaration and submit tax declarations together with
lists of purchased/sold goods and services, which shall serve as bases for
determining monthly payable tax amounts, to the tax agencies within the first
ten days of the subsequent month. Even in cases where there is no turnover from
the sale of goods or services, where input tax and output tax do not arise, the
business establishments shall still have to make and submit declarations to the
tax agencies. The establishments shall have to fully declare tax strictly
according to the set form and bear legal responsibility for the accuracy of
their declaration.
The time for calculating arising
output value added tax shall be the time the business establishments have
transferred ownership (use right, for case of sale in form of installment
payment) of goods or provided services to the purchasers, irrespective of
whether the purchasers have paid or not yet paid therefor. When selling goods
or providing services, the business establishments shall have to make invoices
according to law provisions.
Foreign-based organizations and
individuals that do not have their Vietnam-based offices but provide goods
and/or services subject to value added tax to Vietnam-based organizations and
individuals, the latter shall have to make value added tax declaration and
payment on behalf of foreign-based organizations and individuals.
2. Business establishments and
importers that import goods subject to value added tax shall have to make and
submit value added tax declaration upon each importation together with the
import tax declaration with the import tax-collecting agencies.
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Article
13.- Payment of value added tax into the State budget
1. Business establishments shall
have to pay value added tax fully and on time into the State budget.
a/ For business establishments
that pay tax according to the tax deduction method, after submitting the value
added tax declarations to the tax agencies, they shall have to pay value added
tax into the State budget. The deadline for monthly tax payment shall be the
25th day of the subsequent month. In cases where business establishments have
large amounts of payable value added tax amounts (an average of VND 200
million/month or more), they shall have to pay tax once every 5 or 10 days in a
month. At the month-end, after making tax declaration and calculation, business
establishments shall have to pay the outstanding tax amounts into the State
budget. The deadline for paying the outstanding tax amounts shall be the 25th
day of the subsequent month.
b/ Business establishments, that
fail to fully abide by the regimes on accounting and tax payment invoices and
vouchers according to the method of direct calculation, shall have to pay value
added tax fully and on time into the State budget according to the tax
agencies’ tax payment notices. The deadline for monthly tax payment shall be
the 25th day of the subsequent month.
c/ For business households and
individuals that are based in areas far from the State treasuries or that
conduct itinerant or irregular business activities, the tax agencies shall
collect and remit tax into the State budget. The time limit for the tax
agencies to remit the collected tax amounts into the State budget shall be
within 3 days, or 6 days for mountainous areas, islands and areas where travel
is difficult, after the tax amounts are collected.
2. Business establishments and
goods importers shall have to pay value added tax upon each importation.
The time limit for notifying and
the time limit for paying the value added tax on import goods shall coincide
with the time limit for notifying the import tax payment. For goods not subject
to import tax, the time limit for value added tax declaration and payment shall
comply with the regulations applicable to goods subject to import tax.
For import goods not subject to
value added tax as prescribed in Clause 4, Article 4 of this Decree, if
establishments sell them or use them for other purposes, they shall have to
make value added tax declaration and payment according to the regulations
applicable to other goods.
3. In a tax calculation period
(a month), if business establishments have overpaid tax amounts of the previous
period, such overpaid amounts shall be deducted from the payable tax amount of
the subsequent period, if they have not fully paid tax, they shall have to
fully pay the outstanding tax amount of the previous period. Business
establishments liable to pay value added tax according to the tax deduction
method, which have the input tax amount larger than the output tax amount in a
tax calculation period, shall be entitled to deduct such larger tax amount from
the subsequent tax calculation period. In cases where business establishments
make new investment in fixed assets and have large amounts of deductible input
tax, they shall be entitled to gradual tax deduction or tax reimbursement
according to the provisions of Article 15 of this Decree.
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In cases where business
establishments have turnovers in foreign currencies, they must convert such
foreign currencies into Vietnam dong at the exchange rates announced by Vietnam
State Bank at the time the foreign currency turnovers are generated in order to
determine the payable tax amounts.
The Finance Ministry shall
provide specific guidance on tax payment procedures suitable to each mode of
tax payment and each tax payer prescribed in this Article.
Article
14.- Business establishments shall have to make annual tax settlement with
the tax agencies. The tax settlement years shall be the calendar years. Within
sixty days after the year-end, business establishments shall have to send tax
settlement reports to the tax agencies and fully remit the outstanding tax
amounts into the State budget within ten days after submitting the tax settlement
reports; in case of overpayment, the overpaid amounts shall be deducted from
the payable tax amounts of the subsequent period.
In case of merger,
consolidation, division, splitting, dissolution, bankruptcy or change of
ownership form; assignment, sale, contracting or lease of State enterprises,
business establishments shall have to make tax settlement with the tax agencies
and send tax settlement reports to the tax agencies within forty five days
after the issuance of the decisions on such merger, consolidation, division,
splitting, dissolution, bankruptcy or change of ownership form; assignment,
sale, contracting or lease of State enterprises.
Business establishments shall
have to declare all the payable tax amounts, the already paid amounts, the outstanding
amounts or overpaid amounts by the time prescribed for tax settlement. The
establishments shall have to fully and accurately declare the criteria and data
according to the tax settlement forms; send tax settlements to the tax agencies
of the localities where they register the tax payment within the time limits
prescribed above.
The Finance Ministry shall set
forms and guide the value added tax settlement prescribed in this Article.
Article
15.- The reimbursement of the paid value added tax as prescribed in Article
16 of the Value Added Tax Law is specified as follows:
1. Business establishments
liable to pay tax according to the tax deduction method shall be considered for
tax reimbursement if after three consecutive months or more their input tax amounts
have not yet fully been deducted. Business establishments entitled to tax
reimbursement consideration in this case shall include also those that make
extensive or intensive investment.
Business establishments that
export goods and/or services in large volumes and values according to seasons
or business affairs, if the amount of input value added tax on export goods or
services not yet fully deducted in the month is VND 200 million or more, they
shall be considered for monthly tax reimbursement. Business establishments that
have export goods eligible for value added tax reimbursement must fully satisfy
the conditions and procedures prescribed at Point d, Clause 1, Article 9 of
this Decree.
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3. Operating business
establishments liable to pay tax according to the tax deduction method, that
have projects for investment in new production establishments, which are in the
investment period, have not yet operated, registered their business or tax, and
have the amounts of value added tax on goods and services used for investment
projects of VND 200 million or more, shall be considered for quarterly tax
reimbursement. Business establishments shall have to separately declare and
make dossiers on tax reimbursement for such investment projects.
4. Business establishments, that
make tax settlement upon their division, splitting, dissolution, bankruptcy or
change of ownership form; assignment, sale, contracting or lease of State
enterprises, have input value added tax amount not yet fully deducted or have
overpaid value added tax amounts.
5. Value added tax reimbursement
for projects funded by the Official Development Assistance (ODA) capital
sources:
a/ For projects funded with
non-refundable ODA capital: The project owners or principal contractors shall
be reimbursed the value added tax amounts already paid within the purchase
prices of goods or services used for their projects.
b/ For projects funded with ODA
capital being non-refundable State budget capital: the projects owners or
principal contractors shall be reimbursed the value added tax amounts already
paid upon the importation or purchase of domestic goods and services used for
their projects.
6. Vietnam-based organizations,
which use foreign organizations’ or individuals’ humanitarian aids for the
purchase of value added tax-liable goods in Vietnam to provide humanitarian
aids, shall be reimbursed the value added tax amounts on such goods.
7. Subjects enjoying the
diplomatic privileges and immunities under the provisions of the Ordinance on
Diplomatic Privileges and Immunities, that purchase goods and/or services in
Vietnam at the prices inclusive of the value added tax for use shall be
reimbursed the paid value added tax amounts inscribed in the added value
invoices.
8. Business establishments that
have tax reimbursement decisions of competent agencies according to law
provisions.
To be entitled to tax
reimbursement according to the provisions of this Article, organizations and
individuals shall have to send their written requests enclosed with tax
reimbursement dossiers to the grassroots tax collection managing agencies. The
tax agencies shall have to examine and determine the to be-reimbursed tax
amounts and carry out procedures for tax reimbursement or request competent
agencies to make tax reimbursement to the establishments.
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Article
16.- The tax agencies shall have the following tasks, powers and
responsibilities:
1. To guide business
establishments that have registered their business in making value added tax
registration, declaration and payment strictly according to the provisions of
the Value Added Tax Law.
For business establishments that
fail to strictly observe the regulations on tax registration, declaration and
payment, the tax agencies shall issue the first notices, if after receiving the
first notices, the establishments still fail to implement them, the tax
agencies may handle tax-related administrative violations.
2. To notify the business
establishments that pay tax according to the tax deduction method to make
explanations, adjustments, supplements or re-declaration in cases where their
value added tax declarations have failed to state the full and accurate payable
tax amounts. To notify the business establishments that pay tax according to
the method of direct calculation of the payable tax amounts and the time limits
for tax payment as prescribed. Tax payment notices must be sent to the tax payers
3 days before the date of tax payment inscribed in the notices.
If past the prescribed tax
payment time limits, the business establishments fail to pay tax, to notify
them of the tax amounts and fines for deferred tax payment according to the
provisions of Clause 2, Article 19 of the Value Added Tax Law. The time limits
for calculating monthly fines for deferred tax payment shall count from the
26th day of the subsequent month or from the date of tax payment notified by
the tax agencies to the tax payers. The time limits for calculating fines for
deferred payment for import goods and other cases shall be after the prescribed
date of tax payment inscribed in the tax notices. If business establishments
still fail to pay tax and fine amounts stated in the notices, the tax agencies
may apply or request competent agencies to apply handling measures prescribed
in Clause 4, Article 19 of the Value Added Tax Law in order to ensure the full
collection of tax and fine amounts. If the above-mentioned handling measures have
been applied, but the business establishments still fail to fully pay tax and
fine amounts, the tax agencies shall transfer the dossiers of the cases to law
bodies for handling.
3. To examine and inspect the
tax declaration, payment and settlement by business establish-ments strictly
according to law provisions.
4. To handle tax-related
administrative violations and settle tax-related complaints according to law
provisions.
5. To request tax payers to
provide accounting books, invoices, vouchers as well as other dossiers and
documents related to tax calculation and payment; to request credit
institutions, banks as well as other relevant organizations and individuals to
provide documents related to tax calculation and payment.
6. To keep and use data and
documents provided by business establishments and other subjects in accordance
with the prescribed regime.
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1. Tax payers fail to implement
or improperly implement the regimes on accounting, invoices and vouchers.
For business establishments
liable to pay tax according to the method of direct calculation on the added
value, that fail to effect or fully effect the goods purchase/sale with invoices
and vouchers, the tax agencies shall base themselves on their business
situation to determine the added value and the payable tax amounts according to
the tax calculation method prescribed in Clause 2, Article 8 of this Decree.
For individuals conducting
medium- and small-scale business, the fixed tax amount to be paid each time
shall be determined for use as basis for tax collection in each period of 6 or
12 months, depending on business lines and price fluctuations as well as
business situation of the tax payers. The tax agencies shall have to publicly
notify the tax levels set for such subjects.
For individuals conducting
medium- and small-scale business that pay tax at the levels prescribed for each
period, if there are any changes in their business lines, scales or turnovers,
they shall have to declare such with the tax agencies for consideration and
adjustment of the set tax levels. In cases where they fail to make declaration
or make untruthful declaration, the tax agencies may set the payable tax levels
suitable to practical business situation. Individuals that cease to conduct
business activities shall have to declare such with the tax agencies for tax
exemption or reduction consideration; if they cease their business activities
for 15 days or more in a month, they shall be considered for 50% reduction of
the payable tax amounts of the month, if they cease their business activities
for the whole month, they shall be exempt from tax for such month.
The Finance Ministry shall guide
the determination of the percentage (%) of the added value calculated on the
turnovers for use as basis for determination of the payable value added tax
suitable to each business line; as well as the procedures for declaring
business cessation and the tax reduction for business households prescribed in
this Article.
2. Tax payers fail to declare
or, if past the prescribed time limits for submitting declarations, they have
been reminded thereof but still fail to strictly comply therewith, or have
submitted their tax declarations but falsely declared the bases for determining
the value added tax amounts.
3. Tax payers refuse to produce
accounting books, invoices, vouchers and relevant necessary documents related
to value added tax calculation.
4. Tax payers conduct business
without business registration, without tax payment registration and/or
declaration, as detected through inspection.
The tax agencies shall base
themselves on the investigation documents on establishments’ business
activities or the tax amounts to be paid by other business establishments
engaged in the same business lines with equivalent scales to determine the tax
amounts to be paid by each business establishment mentioned above.
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Chapter IV
HANDLING OF VIOLATIONS
AND COMMENDATION
Article
18.- Tax payers or tax officials that violate the Value Added Tax Law
shall, depending on their acts and the seriousness of their violations, be
handled according to the provisions of Articles 19 and 21 of the Value Added
Tax Law.
Article
19.- Tax agencies and tax officials that well fulfil the assigned tasks;
organizations and individuals that record achievements in the implementation of
the Value Added Tax Law; and tax payers that well fulfil their tax payment
obligations shall be rewarded and/or commended according to the Government’s
regulations.
Chapter V
IMPLEMENTATION PROVISIONS
Article
20.- The collection of value added tax is prescribed as follows:
1. The tax agencies shall have
to collect value added tax and reimburse value added tax for goods and services
of production/business establishments.
2. The customs offices shall
have to collect value added tax on import goods.
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The Finance Ministry shall
specify the collection of value added tax prescribed in this Article.
Article
21.- The value added tax amounts to be reimbursed to the subjects
prescribed in Article 15 of this Decree shall be paid from the tax
reimbursement funds which are set up with deductions from the collected value
added tax amounts. The Finance Ministry shall specify the tax reimbursement and
accounting of value added tax collection and reimbursement prescribed in this
Article.
Article
22.- This Decree takes implementation effect as from January 1, 2004 and
replaces the Government’s Decrees No. 79/2000/ND-CP of December 29, 2000, No.
76/2002/ND-CP of September 13, 2002, No. 95/2002/ND-CP of November 11, 2002 and
No. 108/2002/ND-CP of December 25, 2002 detailing the implementation of the
Value Added Tax Law.
Article
23.- The Finance Ministry shall guide the implementation of this Decree.
The ministers, the heads of the
ministerial-level agencies, the heads of the agencies attached to the
Government and the presidents of the provincial/municipal People’s Committees
shall have to implement this Decree.
ON BEHALF OF THE GOVERNMENT
PRIME MINISTER
Phan Van Khai