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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:
142/1999/TT-BTC
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Hanoi, December 10, 1999
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CIRCULAR
GUIDING THE VALUE
ADDED TAX APPLICABLE TO ODA-FUNDED PROJECTS
Pursuant to Value Added Tax Law No.
02/1997/QH9 of May 10, 1997 and the Government’s Decrees
detailing the implementation of this Law.
Pursuant to the National Assembly Standing Committee’s
Resolution No. 90/1999/NQ-UBTVQH10 of September 3, 1999 amending and
supplementing a number of lists of goods and services not subject to value
added tax and the value added tax rates of a number of goods and services;
Pursuant to the Prime Minister’s Decision No. 223/1999/QD-TTg
of December 7, 1999 on the value added tax applicable to ODA-funded projects;
The Ministry of Finance hereby guides the application of value added tax to
ODA-funded programs and projects (hereinafter collectively referred to as
projects) as follows:
I. FOR
PROJECTS USING NON-REFUNDABLE ODA
1. For imported goods and supplies:
Goods and supplies imported for implementation
of projects using non-refundable ODA shall not be subject to VAT. For being
exempt from value added tax, when importing goods and/or supplies for their
projects, the project owners or contractors shall submit to the customs offices
a written certification by the competent agency that such goods and/or supplies
are non-refundable aid goods, together with the import dossier.
2. For
domestically-purchased goods and services:
a/ Goods and services provided by principal
contractors to non-refundable ODA-funded projects shall not be subject to VAT
(principal contractors are understood as organizations and/or individuals that
directly sign contracts with projects owners to carry out construction and
installation work, provide consultancy or major goods and supplies to the
projects). Principal contractors shall be reimbursed the value added tax amount
already paid when purchasing domestic goods and/or services.
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- An official dispatch requesting tax
reimbursement, made according to form No. 09/GTGT issued together with the
Finance Ministry’s Circular No. 89/1998/TT-BTC
of June 27, 1998.
- A list of invoices on the added value of goods
and services procured for project implementation, made according to form No.
03/GTGT issued together with the Finance Ministry’s Circular
No. 89/1998/TT-BTC of June 27, 1998.
b/ Goods and/or services purchased from domestic
suppliers by the project owners with their value added tax already paid shall
be entitled to tax reimbursement. After receiving the payment invoices from the
domestic suppliers, the project owners shall send dossiers to the tax office
for tax reimbursement. The tax reimbursement dossier shall be compiled as
guided in Clause a above, excluding the copy(ies) of the contract(s) for
subcontracting part of the work to sub-contractors.
II. FOR
PROJECTS FUNDED WITH ODA LOANS AS NON-REFUNDABLE STATE BUDGET INVESTMENT
Projects funded with ODA loans as non-refundable
State budget investment prescribed in Article 2 of the Prime Minister’s
Decision No. 223/1999/QD-TTg of December 7, 1999, include projects funded with
ODA loans and projects funded with combined ODA capital (projects partly funded
with non-refundable ODA which is not provided under a separate agreement)
wholly or partly invested with State budget (central or local budget) capital.
The above-said projects shall be reimbursed the
VAT amounts already paid on goods and/or supplies imported and goods and
supplies domestically purchased for their implementation.
1. For imported goods and supplies:
The value added tax amounts paid for imported
goods and supplies as prescribed in the VAT Law shall be reimbursed. The tax
reimbursement dossier includes:
+ An official dispatch requesting VAT
reimbursement, made according to form No. 09/GTGT issued together with the
Finance Ministry’s Circular No. 89/1998/TT-BTC
of June 27, 1998;
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+ The import and export goods declaration (a
copy certified by the project owner)
+ The customs office’s receipt
of VAT paid on imported goods, or a paper on the tax payment made via bank
account transfer, with the Treasury�s
certification (the original);
+ The entrusted import contract, for cases where
other enterprises are entrusted to import the goods (a copy certified by the
project owner or principal contractor);
+ The contract signed between the project owner
and the principal contractor, for cases where the principal contractor directly
fills in the goods import procedures (a copy stamped and certified by the
project owner).
Where the project owner directly imports goods
and/or supplies subject to VAT, he/she may seek permission to apply the mutual
ceasing of the payable VAT and import tax (if any). The mutual ceasing
procedures and order shall be the same as in cases of mutual ceasing of import
tax.
2. For domestically-purchased goods and
services:
The VAT amount paid by the project owners when
purchasing goods and/or services shall be reimbursed. Right after receiving the
payment invoices from the supplier(s), the project owners shall send dossiers
to the tax office for tax reimbursement. The tax reimbursement dossier shall be
as prescribed in Clause b, Point 2, Section I above.
Where the project owner signs contracts with
principal contracts and the contract price does not include VAT, the principal
contractors, when making final settlement with the project owner, must not
account VAT therein and they shall be reimbursed the VAT amount paid for
purchased goods and/or services. The tax reimbursement dossier, submitted by
the principal contractors, shall be as guided at Clause a, Point 2, Section I
above together with the project owner’s official dispatch, for the
first-time submission, requesting the VAT amount to be reimbursed directly to
the principal contractor as the contract price does not include VAT.
III. FOR
OTHER PROJECTS FUNDED WITH LOANS
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Project owners shall themselves seek and use the
source of domestic capital, but not the ODA capital source, to pay VAT. The VAT
amount paid during the course of project implementation shall be deducted or
reimbursed according to the guidance in the Finance Ministry’s
Circular No.89/1998/TT-BTC of June 27, 1998 and Circular No.93/1999/TT-BTC of
July 28, 1999.
IV.
PROCEDURES FOR TAX CODE REGISTRATION
1. For principal contractors:
- Domestic principal contractors shall use their
granted tax codes for transactions and completion of the VAT reimbursement
procedures.
- Foreign principal contractors doing business
in Vietnam and already granted tax codes may continue using such tax codes for
completing the tax reimbursement procedures.
- Foreign contractors that do business for the
first time in Vietnam or are doing business in Vietnam but not yet granted tax
codes (i.e. contractors that declare and pay taxes through Vietnamese
organizations and/or individuals by mode of tax deduction) must compile
dossiers and send them to the tax office of the locality where they have their
executive offices (for contractors having executive offices) or the tax office
of the locality where their project is constructed, according to form No.
04-DK-TCT issued together with the Finance Ministry’s Circular
No. 79/1998/TT-BTC of June 12, 1998. The tax office shall grant tax codes to
foreign contractors according to regulations.
2. For project owners:
- Project owners that have registered their tax
codes, shall use these codes when carry out the tax reimbursement procedures.
- For newly-established project owners wishing
to register tax codes to carry out the tax reimbursement procedures, they shall
compile a dossier to register tax codes with the tax office of the place where
they have their executive offices, within 10 days after receiving the
investment decision of a competent agency according to the Finance Ministry’s
Circular No. 79/1998/TT-BTC of June 12, 1998.
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V. VAT
REIMBURSEMENT ORDER
1. Tax reimbursing agency:
The local tax offices (of the provinces and
centrally-run cities) that grant tax codes shall effect the tax reimbursement
according to the guidance of this Circular. In cases where a work is divided
into many bidding packages or constructed in different localities, each having
a separate project management board, the tax office of the locality where the
project owner or principal contractor has the main executive office shall
effect the tax reimbursement.
In cases where a project owner imports goods
and/or supplies and fills in the procedures for mutual ceasing of VAT as guided
at Point 1, Section II of this Circular, no tax reimbursement shall be made.
2. Order and time limit for tax reimbursement:
a/ For refundable ODA-funded projects and
projects with non-refundable State budget investment:
After receiving valid dossiers requesting tax
reimbursement from project owners or principal contractors, within three
working days at most, the provincial/municipal Tax Departments shall make tax
reimbursement decisions and send them to the State Treasury and concurrently to
the project finance management agency. Where a principal contractor is eligible
for tax reimbursement, when making a tax reimbursement decisions, the tax
agency shall send a copy of such decision to the concerned project owner for
monitoring.
Where a dossier requesting tax reimbursement is
incomplete, within two working days the Tax Department must inform the project
owner or principal contractor of the reason therefor so that the latter can
complete the dossier.
The State Treasury shall reimburse tax to the
project owners or principal contractors within two days after receiving the tax
reimbursement decisions of the tax agencies.
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c/ For projects using non-refundable ODA or
projects with non-refundable State budget investment, that have had investment
decisions and are being implemented before the effective date of Decision No.
223/1999/QD-TTg, the VAT amounts already paid by the project owners or
principal contractors shall be handled as follows:
- For cases where VAT amounts have been
calculated and paid under the Finance Ministry’s Circular
No. 82/1999/TT-BTC of June 30, 1999, the input VAT amounts which have not yet
been deducted or fully deducted shall be deducted or reimbursed as prescribed
in this Circular.
- For cases where a project was allocated
reciprocal capital (in 1999 and before) from the local budget or central budget
(of a ministry and branch) or the bid price, which has been approved for
signing the contract, already contained the payable tax amount, the project
owner must use the allocated reciprocal capital to pay any arising VAT amounts.
- For cases where a project has not yet been
allocated any reciprocal capital for paying VAT, the project owner or principal
contractor shall be reimbursed the paid VAT amount as prescribed above. The tax
reimbursement dossier should be added with the certification of a competent
agency that the project owner has not yet been allocated reciprocal capital for
paying VAT.
As in the past a number of project owners and
principal contractors were not granted tax codes, for cases where project
owners or foreign contractors paid VAT but the receipts of VAT on imported
goods or payment vouchers issued to them were not inscribed with the project
owners’ or foreign contractors’ tax codes,
tax reimbursement shall be also made as guided in this Circular.
3. Examination and settlement of reimbursed VAT
amounts
Project owners or principal contractors shall be
held responsible for the accuracy of their tax reimbursement dossier. Where
there is a doubt, the tax agency shall be entitled to check the bases for tax
reimbursement and after their works are completed the project owners or
principal contractors must settle their taxes with the tax agency as
prescribed.
VI.
RECORDING AN INCREASE IN THE INVESTMENT CAPITAL
For project funded with ODA loans or projects
funded with combined ODA sources as non-refundable budget investment, when
receiving the tax reimbursement decisions from the tax agency, the financial
agency in charge of such projects shall record an increase in the capital
allocated to the project owners. When making the annual plan on reciprocal
capital under the guidance in Joint Circular No. 06/1998/TTLT-BKH-BTC of August
14, 1998 of the Ministry of Finance and the Ministry of Planning and
Investment, the project owners do not need to make a plan on reciprocal capital
for paying VAT.
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This Circular takes effect from the effective
date of the Prime Minister’s Decision No. 223/1999/QD-TTg of
December 7, 1999 and replaces Circular No. 82/1999/TT-BTC of June 30, 1999 of
the Ministry of Finance.
For localities where the VAT reimbursement
fund is not enough for making tax reimbursement to ODA-funded projects, they
must report such to the Ministry of Finance for consideration and adjustment as
prescribed in the Finance Minister’s Decision No. 1632/1998/QD-BTC of
November 17, 1998.
If, in the course of implementation, any problem
arise, units are requested to report them to the Ministry of Finance for
consideration and settlement.
FOR THE MINISTER OF FINANCE
VICE MINISTER
Pham Van Trong