Joint Circular No. 08-TTLT guiding the implementation of tax policies for business operations of units under the Ministry of National Defense.

CIRCULAR

NUMBER 08-TTLB OF MAY 18, 1992 ISSUED BY THE JOINT MINISTRY OF FINANCE AND NATIONAL DEFENSE GUIDING THE IMPLEMENTATION OF TAX POLICIES FOR BUSINESS OPERATIONS OF UNITS UNDER THE MINISTRY OF NATIONAL DEFENSE 

- BASED ON CURRENT TAX LAWS AND ORDINANCES;

- BASED ON THE CHARACTERISTICS OF BUSINESS OPERATIONS OF UNITS UNDER THE MINISTRY OF NATIONAL DEFENSE;

 THE JOINT MINISTRY OF FINANCE AND NATIONAL DEFENSE GUIDES THE IMPLEMENTATION OF VALUE ADDED TAX, SPECIAL CONSUMPTION TAX, INCOME TAX, AND PROFIT TAX AS FOLLOWS:

I. TAXPAYERS AND PLACE OF PAYMENT

1- Taxpayers.

ALL UNITS UNDER THE MINISTRY OF NATIONAL DEFENSE ENGAGED IN BUSINESS ACTIVITIES SUCH AS PRODUCTION, EXPLORATION, CONSTRUCTION, TRANSPORTATION, COMMERCE, FOOD SERVICES, AND OTHER SERVICES ARE SUBJECT TO THE PAYMENT OF THE TYPES OF TAXES AS PROVIDED BY LAW, EXCEPT FOR THE FOLLOWING CASES:

a) PRODUCTION, REPAIR OF WEAPONS, MILITARY EQUIPMENT, AND MILITARY UTENSILS; CONSTRUCTION OF MILITARY PROJECTS, SUPPLY AND TRANSPORTATION, AND MILITARY TECHNICAL SERVICES PERFORMED DIRECTLY BY UNITS UNDER THE MINISTRY OF NATIONAL DEFENSE ARE EXEMPT FROM TAX.

IF THESE ACTIVITIES ARE ASSIGNED TO ORGANIZATIONS OR INDIVIDUALS OUTSIDE THE ARMED FORCES FOR PRODUCTION, PROCESSING, OR SERVICE PROVIDING, THEN THE PARTY RECEIVING THE ASSIGNMENT MUST PAY THE TAX.

b) PRODUCTION BY PRISONS, REHABILITATION CAMPS, FACTORIES, RESEARCH INSTITUTES, EXPERIMENTAL STATIONS, AND MILITARY UNITS UNDER THE MINISTRY OF NATIONAL DEFENSE USED FOR SELF-EQUIPMENT AND INTERNAL CONSUMPTION IS EXEMPT FROM TAX.

IF PRODUCTS ARE SOLD OR SERVICES ARE PROVIDED TO THE MARKET, THEN THE PART OF THE REVENUE GENERATED FROM THESE SALES OR SERVICES MUST BE DECLARED AND SUBMITTED AS TAX, EXCEPT FOR AGRICULTURAL AND FOOD PRODUCTS.

c) BUSINESS OPERATIONS COMBINING WITH NATIONAL DEFENSE AND SECURITY TASKS IN CRUCIAL AREAS (MOUNTAINOUS REGIONS, BORDER AREAS, SEAS, AND ISLANDS) WHERE UNITS FACE DIFFICULTIES AND REQUIRE GOVERNMENT SUPPORT TO MAINTAIN THEIR OPERATIONS MAY BE ELIGIBLE FOR TAX REDUCTION OR EXEMPTION PURSUANT TO ARTICLE 18 OF THE VALUE ADDED TAX LAW.

d) RESEARCH, APPLICATION, AND TESTING ACTIVITIES SERVING NATIONAL DEFENSE THAT INVOLVE A SMALL AMOUNT OF PRODUCTS OR TECHNICAL SERVICES RELATED TO RESEARCH TOPICS PROVIDED TO THE MARKET MAY BE ELIGIBLE FOR TAX REDUCTION OR EXEMPTION ON A CASE-BY-CASE BASIS AS DETERMINED BY THE MINISTRY OF FINANCE.

FOR THE ABOVE CASES OF TAX EXEMPTION OR REDUCTION, THE MINISTRY OF NATIONAL DEFENSE WILL ISSUE SPECIFIC REGULATIONS ON FINANCIAL MANAGEMENT SUITABLE FOR THE MILITARY'S CHARACTERISTICS.

ALL BUSINESS OPERATIONS OF MILITARY UNITS NOT FALLING UNDER THE SCOPE OF THE ABOVE POINTS a, b, c, AND d MUST FULLY PAY THE TYPES OF TAXES AS PROVIDED BY LAW AND ACCORDING TO THE GUIDELINES BELOW:

2. PLACE OF PAYMENT.

a) NATIONAL DEFENSE ENTERPRISES (ENTERPRISES, FACTORIES, JOINT FACTORIES, COMPANIES, SCIENTIFIC PRODUCTION JOINT FACTORIES, ETC., ESTABLISHED BY THE STATE COUNCIL AND THE MINISTRY OF NATIONAL DEFENSE WITH THE MISSION OF PRODUCTION, REPAIR, SUPPLY, AND TRANSPORTATION SERVICES FOR NATIONAL DEFENSE) USE THEIR CAPACITY TO PRODUCE, REPAIR, TRANSPORT, AND PROVIDE SERVICES FOR CIVILIAN ECONOMY: UNITS SPECIALIZED IN ECONOMIC ACTIVITIES ARE ASSIGNED THE TASK OF COMBINING PRODUCTION AND BUSINESS WITH STRATEGIC AREA PROTECTION.

- REGISTER, DECLARE, AND PAY VALUE ADDED TAX AND SPECIAL CONSUMPTION TAX (IF APPLICABLE) FOR PRODUCTS SERVING THE CIVILIAN ECONOMY AT THE LOCAL TAX DEPARTMENT OR BRANCH.

- PAY INCOME TAX AND PROFIT TAX THROUGH THE NATIONAL DEFENSE FINANCIAL SYSTEM.

b) OTHER UNITS (FACTORIES, COMPANIES, TOTAL COMPANIES, ETC.) NOT FALLING UNDER THE SCOPE OF POINT 2.a ABOVE MUST REGISTER, DECLARE, AND PAY ALL TYPES OF TAXES AT THE LOCAL TAX DEPARTMENT OR BRANCH.

II. PROCEDURES FOR PAYMENT, REFUND, AND USE OF COLLECTED TAXES

1. PROCEDURES FOR PAYMENT.

a) FOR TAXES PAID TO LOCAL TAX AUTHORITIES.

BASED ON THE REGIMES AND PROCEDURES FOR PAYMENT OF EACH TYPE OF TAX AS PROVIDED IN THE TAX LAWS AND GUIDING CIRCULARS OF THE MINISTRY OF FINANCE, LOCAL TAX AUTHORITIES SHALL GUIDE PRODUCTION AND BUSINESS ENTITIES TO DECLARE AND PAY TAXES PROMPTLY INTO THE TREASURY. THE TAX REVENUES OF PRODUCTION AND BUSINESS ENTITIES ARE RECORDED IN THE "OTHER INCOME" CATEGORY OF THE CENTRAL BUDGET (ITEM 47) ACCORDING TO THE APPROPRIATE CHAPTER, TYPE, SECTION, AND RANK OF THE NATIONAL BUDGET. THIS REVENUE IS INCLUDED IN THE COMPLETION RESULTS OF THE TAX AUTHORITIES AT ALL LEVELS.

b) FOR TAXES PAID THROUGH THE NATIONAL DEFENSE FINANCIAL SYSTEM, THE CURRENT REGULATIONS OF THE MINISTRY OF NATIONAL DEFENSE SHALL APPLY.

2. REGARDING THE REFUND OF TAXES.

- QUARTERLY, BASED ON TAX PAYMENT DOCUMENTS (TAX PAYMENT RECEIPTS, DOCUMENTS OF FUNDS DEPOSITED INTO THE TREASURY BY PRODUCTION AND BUSINESS ENTITIES UNDER THE MINISTRY OF NATIONAL DEFENSE), THEY SHALL PREPARE A LIST OF EACH TYPE OF TAX PAID WITH THE CONFIRMATION OF THE NATIONAL TREASURY AND LOCAL TAX AUTHORITIES AND SEND IT TO THE MINISTRY OF NATIONAL DEFENSE. THE MINISTRY OF NATIONAL DEFENSE WILL AGGREGATE THE TAXES PAID (WITH ATTACHED LIST AND TAX PAYMENT DOCUMENTS OF THE UNITS) AND SEND THEM TO THE MINISTRY OF FINANCE. THE MINISTRY OF FINANCE HAS THE RESPONSIBILITY TO REFUND THE TAXES TO THE MINISTRY OF NATIONAL DEFENSE IN A TIMELY AND COMPLETE MANNER.

- THE REFUND OF TAXES TO THE MINISTRY OF NATIONAL DEFENSE SHALL BE IMPLEMENTED IN 1992.

3. MANAGEMENT AND USE OF TAXES:

THE MINISTRY OF NATIONAL DEFENSE IS RESPONSIBLE FOR USING THE REFUNDED TAXES IN 1992 AND THE TAXES COLLECTED THROUGH THE NATIONAL DEFENSE FINANCIAL SYSTEM IN ACCORDANCE WITH THE PURPOSE AND CONTENT OF THE NATIONAL DEFENSE BUDGET. ANNUALLY, THE MINISTRY OF NATIONAL DEFENSE IS RESPONSIBLE FOR SETTLING THE TAX REVENUE WITH THE STATE.

III. IMPLEMENTATION.

1. THE JOINT MINISTRIES OF FINANCE AND NATIONAL DEFENSE ARE RESPONSIBLE FOR DISSEMINATING THE CONTENTS OF THIS CIRCULAR TO THE UNITS AND ORGANIZATIONS UNDER THEIR AUTHORITY.

PRODUCTION AND BUSINESS UNITS UNDER THE MINISTRY OF NATIONAL DEFENSE MUST PROMPTLY AND STRICTLY IMPLEMENT THE STATE REGULATIONS ON BUSINESS REGISTRATION, TAX PAYMENT REGISTRATION, OPENING AND RECORDING ACCOUNT BOOKS ACCORDING TO THE STATISTICAL AND ACCOUNTING ORDINANCE. THE ORGANIZATIONS OF THE TWO MINISTRIES HAVE THE RESPONSIBILITY TO GUIDE THE PRODUCTION AND BUSINESS UNITS UNDER THE MINISTRY OF NATIONAL DEFENSE TO IMPLEMENT THE CONTENTS OF THIS CIRCULAR CORRECTLY.

2. THE MINISTRY OF NATIONAL DEFENSE AND THE MINISTRY OF FINANCE SHALL UNIFY THE LIST OF UNITS ENGAGED IN BUSINESS OPERATIONS REQUIRED TO PAY TAXES AS PROVIDED IN POINT a, SECTION 2, PART I OF THIS CIRCULAR AND NOTIFY THE LOCAL AUTHORITIES TO MONITOR THE IMPLEMENTATION.

3. TO ENSURE MILITARY SECRECY, UNITS LISTED IN POINT 2 ABOVE ARE RESPONSIBLE FOR REGISTERING AND EXPLAINING TO LOCAL TAX AUTHORITIES ONLY THE FOLLOWING TWO ITEMS:

- ECONOMIC PRODUCTS AND QUANTITY;

- REVENUE FROM ECONOMIC ACTIVITIES AND PRODUCTS SOLD TO THE MARKET.

In addition to regular inspections for tax collection management, where the tax authority needs to conduct audits on units listed herein, there must be agreement between the Ministry of National Defense and the Ministry of Finance, and participation of representatives from the Ministry of National Defense is required. The Ministry of National Defense will notify the audited unit, which has the responsibility to strictly comply with all requirements and assist the audit team in completing their tasks.

4- For taxes and other revenues not mentioned in this Circular, they shall be implemented in accordance with current State regulations and guidance from the Ministry of Finance.

5- This Circular takes effect from January 1, 1992. Previous regulations of the Ministry of Finance and the Ministry of National Defense that conflict with this Circular are hereby abolished. Any difficulties encountered during implementation should be promptly reported by the units and tax authorities to both Ministries for timely study and resolution.