Circular No. 09/1999/TT-BTC guides the management and use of invoices for purchasing and selling state reserve goods.

CIRCULAR

Guidelines for managing and using invoices for purchasing and selling state reserve goods

Pursuant to the Value Added Tax Law No. 02/1997/QH9 dated May 10, 1997, the Government's Decree No. 28/1998/NĐ-CP dated May 11, 1998 detailing the implementation of the Value Added Tax Law, the Government's Decree No. 102/1998/NĐ-CP dated December 21, 1998 supplementing and amending certain provisions of the Government's Decree No. 28/1998/NĐ-CP dated May 11, 1998 detailing the implementation of the Value Added Tax Law, and Circulars of the Ministry of Finance guiding the implementation of value added tax;

Pursuant to the Government's Decree No. 10/CP dated February 24, 1996 promulgating the State Reserve Management Regulation;

Pursuant to Decision No. 885/1998/QĐ-BTC dated July 16, 1998 of the Minister of Finance promulgating the issuance, management, and use of sales invoices;

To implement the provisions of the Value Added Tax Law accurately and suitably with the organizational structure and operations of the state reserve management system, the Ministry of Finance guides the management and use of invoices for purchasing and selling state reserve goods as follows:

I) GENERAL PROVISIONS:

1) The subjects applying the guidelines on managing and using invoices for purchasing and selling state reserve goods under this Circular are agencies and units within the state reserve management system (hereinafter referred to collectively as the State Reserve Agency) as stipulated in the State Reserve Management Regulation issued together with the Government's Decree No. 10/CP dated February 24, 1996, including:

The State Reserve Administration, State Reserve Branches, and direct subordinate State Reserve Warehouses of the State Reserve Administration; Ministries, sectors, and reserve management agencies and units under ministries and sectors assigned tasks to manage the state reserve fund implementing the financial management system for administrative and public service units issued pursuant to Decision No. 999 TC/QĐ/CĐKT dated November 2, 1996 of the Minister of Finance, Decision No. 393QĐ-TCKH dated December 31, 1996 of the Director of the State Reserve Administration regarding the issuance of the accounting system for state reserves, and Decision No. 62/1998/QĐ-CDTQG dated July 7, 1998 of the Director of the State Reserve Administration regarding the supplementation and amendment of certain contents of the state reserve accounting system;

State-owned enterprises assigned the task of managing state reserve goods must carry out the purchase, sale, and rotation of state reserve goods in accordance with the regulations of the Government on the State Reserve Management Regulation.

2) The purchase price, export, and sale prices of state reserve goods are the actual payment prices recorded on the sales invoice as stipulated in Article 24 of the State Reserve Management Regulation issued together with the Government's Decree No. 10/CP dated February 24, 1996.

3) The State Reserve Agencies must manage and use the invoice and voucher system in accordance with the provisions of Circular No. 29/1998/TT-BTC dated March 11, 1998 of the Ministry of Finance guiding the financial management system for implementing the State Reserve Management Regulation issued together with the Government's Decree No. 10/CP dated February 24, 1996, and the specific guidance provided in this Circular.

4) The State Reserve Agencies mentioned in Point 1 of this Section shall not be required to pay taxes according to the tax laws in the following cases when exporting or selling state reserve goods:

a) Exporting and selling (including selling to other units for export) according to plans and decisions of the Prime Minister;

b) Exporting and selling (including selling to other units for export) for rotating new goods according to plans (including selling inferior or lower quality goods);

c) Direct exports and entrusted exports according to government regulations;

d) Internal transfers between one or among State Reserve Agencies according to decisions of the agency heads or competent authorities;

đ) Other exports and sales as prescribed by the Government.

For the above cases of exports and sales, the State Reserve Agencies must prepare a list of exported and sold goods attached to the export and sale vouchers as stipulated in this Circular and clearly indicate the itemized plan, decision, or order from the competent authority specifying the list of state reserve goods exported and sold.

5) For goods and services subject to value added tax produced and traded outside the state reserve goods list, beyond the specified quantity of state reserve goods, or not falling under the cases of export and sale mentioned in Point 4 of this Section, registration, declaration, payment of taxes, and other fees must be carried out in accordance with current tax and fee laws.

II) SPECIFIC PROVISIONS:

1) Organizations and individuals engaged in producing and trading goods that sell goods to State Reserve Agencies for state reserves must use sales invoices as stipulated in Decision No. 885/1998/QĐ-BTC dated July 16, 1998 of the Minister of Finance promulgating the issuance, management, and use of sales invoices and Section IV Part B of Circular No. 89/1998/TT-BTC dated June 27, 1998 of the Ministry of Finance guiding the implementation of the Government's Decree No. 28/CP/1998/NĐ-CP dated May 11, 1998 detailing the implementation of the Value Added Tax Law.

2) When State Reserve Agencies export or sell state reserve goods, they may use the following types of documents:

a) When exporting state reserve goods for sale or export (including direct export and entrusted export) as stipulated in Points 4a, 4b, and 4c of Section I of this Circular, State Reserve Agencies must use state reserve sales invoices printed and issued by the State Reserve Administration according to the model specified in this Circular. In case the State Reserve Administration has not yet printed and issued state reserve sales invoices, the State Reserve Agencies may register with the Provincial Tax Department to temporarily use general sales invoices during the first quarter of 1999, but must clearly indicate "sale of state reserve goods" when using them.

When issuing state reserve sales invoices, State Reserve Agencies must fully and correctly record all elements on the invoice and clearly indicate: the name, address, and tax code of the selling unit and the buyer (if the buyer does not have a tax code or does not provide it, the selling unit must cross out the tax code box of the buyer). The price recorded on the invoice is the actual payment price with the buyer.

The actual payment selling price is the implementation price as prescribed in Article 24 of the National Reserve Management Regulation issued together with Decree No. 10/CP dated February 24, 1996 of the Government, which may be the selling price set by the Government or competent authority, the auction selling price, or the market price. For goods in the national reserve subject to value-added tax, the actual payment selling price shall be determined as the price inclusive of value-added tax.

b) In cases of internal transfer sales and other national reserve goods sales as stipulated in point 4d, 4đ, Section I of this Circular, the National Reserve Agency must use the goods dispatch note printed, issued, and managed by the National Reserve Agency.

3) Business establishments subject to value-added tax under the deduction method, purchasing national reserve goods for production, business operation, or export (except in cases where the National Reserve Agency directly exports or entrusts export as stipulated in point 4c, Section I of this Circular), are entitled to deduct value-added tax (VAT) on goods subject to VAT according to the following provisions:

Business establishments base their determination of whether purchased goods are subject to VAT or exempt from VAT on the sales invoice issued by the seller and compare it with the provisions of the Law on Value-Added Tax. If the purchased goods are subject to VAT, they determine the purchase price excluding VAT and the deductible input VAT based on the payment price stated on the invoice using the following formula:

 Example: Company A purchases 100 tons of rice from National Reserve Agency B. Company A must pay a total amount of 147 million VND as stated on the sales invoice for national reserve goods. Rice is subject to VAT at a rate of 5%. Therefore, Company A calculates the purchase price excluding VAT and VAT on purchased goods as follows:

Purchase Price Excluding VAT = 147 million = 140 million

                                                             1 + 5%

VAT on Purchased Goods = 140 million x 5% = 7 million.

4) The self-calculation of the purchase price excluding VAT and VAT for input tax deduction as stipulated in point 3 above does not apply to the following cases:

Business establishments purchasing national reserve goods that are exempt from VAT.

Purchasing national reserve goods without a valid sales invoice as prescribed in this Circular, or having a sales invoice but without the selling price stated or without payment.

Business establishments calculating VAT directly on added value.

The National Reserve Agency purchasing goods from another National Reserve Agency.

The National Reserve Agency directly exporting or entrusting export.

5) The State Treasury has the responsibility to print, issue, and distribute invoices to all National Reserve Agencies; when using sales invoices, National Reserve Agencies must register with the Provincial Tax Department regarding the invoice format and quantity used.

6) The Provincial Tax Department has the responsibility to guide the use of sales invoices for national reserve goods according to the instructions in this Circular; simultaneously, it will inspect the calculation and accounting of purchase prices and VAT on national reserve goods purchased by business establishments to ensure prevention of VAT revenue loss in national reserve goods trading businesses.

III) IMPLEMENTATION:

1) This Circular takes effect from the date of issuance; any other regulations concerning invoices and purchase-sale vouchers for national reserve goods contrary to this Circular are invalid.

Financial management regulations for national reserves continue to be implemented according to current regulations.

2) National Reserve Agencies engaged in production, business operations, and services subject to taxes in Vietnam and importing goods not included in the national reserve must use invoices and vouchers for goods and service transactions, maintain accounting records for business entities, and comply with the payment of VAT, corporate income tax, import duties, and other taxes and revenues (if applicable) according to the current laws on taxes and other revenues.

During implementation, if there are any difficulties, units are advised to promptly report to the Ministry of Finance (General Department of Taxation) for research and resolution./.