Circular No. 10216/TC/TCT regarding procedures and documents for exported goods subject to a 0% Value Added Tax (VAT) rate.

LETTER

OF THE MINISTRY OF FINANCE NUMBER 10216 TC/TCT ON OCTOBER 26, 2001
REGARDING PROCEDURES AND DOCUMENTS FOR EXPORT GOODS SUBJECT TO A 0% VAT RATE
IN THE PROCESS OF IMPLEMENTING VAT REFUNDS, SOME ISSUES HAVE EMERGED CONCERNING THE DOCUMENTATION USED TO CONFIRM THAT GOODS ARE ACTUALLY EXPORTED; BASED ON THE PROVISIONS OF THE COMMERCIAL LAW AND THE REGULATIONS ON CUSTOMS PROCEDURES FOR EXPORTING GOODS, THE MINISTRY OF FINANCE GUIDES SPECIFICALLY THE DOCUMENTATION AND EVIDENCE TO PROVE THAT GOODS ARE ACTUALLY EXPORTED, AS PROVIDED IN POINT 1.1, SECTION II, PART B OF CIRCULAR NO. 122/2000/TT-BTC AS FOLLOWS:

Dear: - Ministries, ministerial-level agencies, government agencies

- Provincial People's Committees, municipal people's committees under direct central jurisdiction

1. EXPORT CONTRACT WITH FOREIGN ENTITIES

A BUSINESS OPERATING UNDER THE VAT DEDUCTION METHOD THAT EXPORTS GOODS TO FOREIGN TRADERS (INCLUDING CROSS-BORDER TRADE BETWEEN VIETNAM AND CHINA, LAOS, AND CAMBODIA) MUST HAVE AN EXPORT CONTRACT SIGNED WITH FOREIGN TRADERS IN WRITING IN ACCORDANCE WITH THE PROVISIONS OF ARTICLES 49, 50, AND 81 OF THE COMMERCIAL LAW. PURCHASE AND SALE TRANSACTIONS WITH FOREIGN TRADERS THROUGH TELEGRAMS, TELEX, FAX, EMAIL, AND OTHER ELECTRONIC COMMUNICATIONS WITH THE ESSENTIAL CONTENTS OF A PURCHASE AND SALE CONTRACT AS PROVIDED IN ARTICLE 50 OF THE COMMERCIAL LAW ARE ALSO CONSIDERED AS CONTRACTS.

IN CASES WHERE GOODS ARE SOLD TO FOREIGN TRADERS WITHOUT COMPLYING WITH THE ABOVE MENTIONED CONTRACT REQUIREMENTS, THE 0% VAT RATE SHALL NOT BE APPLICABLE. SPECIAL GUIDELINES WILL APPLY FOR EXPORTS AS SPECIFIED BY THE GOVERNMENT.

FOR CASES WHERE GOODS WERE EXPORTED THROUGH BORDER LAND ROUTES FROM JANUARY 1, 2001 TO OCTOBER 1, 2001, IF BUSINESSES DID NOT ESTABLISH WRITTEN PURCHASE AND SALE CONTRACTS BUT MET ALL OTHER REQUIRED PROCEDURES (AS LISTED BELOW), THEY MAY STILL APPLY THE 0% VAT RATE.

2. CONFIRMATION OF ACTUAL EXPORTED GOODS BY CUSTOMS AUTHORITIES

EXPORTED GOODS ARE THOSE THAT HAVE COMPLETED CUSTOMS PROCEDURES; THEY MUST HAVE A CONFIRMATION FROM THE CUSTOMS AUTHORITY ON THE EXPORT AND IMPORT DECLARATION FORM (ABBR. CUSTOMS DECLARATION FORM) AS FOLLOWS:

- FOR LAND EXPORTS, IF THE CUSTOMS PROCEDURE LOCATION DIFFERS FROM THE EXPORT PORT, THE CUSTOMS DECLARATION FORM MUST BE SIGNED AND STAMPED BY THE CUSTOMS AUTHORITY IN THE "CUSTOMS PROCEDURE COMPLETION CONFIRMATION" SECTION AND CONFIRM THE ACTUAL EXPORT OF GOODS IN THE "EXPORT/IMPORT CONFIRMATION" SECTION.

- FOR LAND AND AIR EXPORTS, IF THE CUSTOMS PROCEDURE IS HANDLED AT THE SAME PORT, THE CUSTOMS DECLARATION FORM MUST BE SIGNED AND STAMPED BY THE PORT CUSTOMS AUTHORITY IN THE "CUSTOMS PROCEDURE COMPLETION CONFIRMATION" SECTION.

- FOR SEAPORT EXPORTS, THE CUSTOMS DECLARATION FORM MUST BE SIGNED AND STAMPED BY THE EXPORT CUSTOMS AUTHORITY IN THE "CUSTOMS PROCEDURE COMPLETION CONFIRMATION" SECTION; IF GOODS HAVE COMPLETED CUSTOMS PROCEDURES BUT COULD NOT BE EXPORTED AND WERE RETURNED TO DOMESTIC TERRITORY, THE CUSTOMS AUTHORITY MUST REVOKE THE CUSTOMS DECLARATION FORM, AND THE BUSINESS SHALL NOT USE IT AS EVIDENCE TO APPLY THE 0% VAT RATE WHEN DECLARING AND REFUNDING VAT FOR EXPORTED GOODS; IF GOODS HAVE COMPLETED CUSTOMS PROCEDURES BUT ONLY PART WAS EXPORTED AND THE REMAINING PART WAS RETURNED TO DOMESTIC TERRITORY, THE EVIDENCE OF ACTUAL EXPORTED GOODS IS THE CUSTOMS DECLARATION FORM WITH THE EXPORT CUSTOMS AUTHORITY'S CONFIRMATION AND ADJUSTMENT OF THE ACTUAL EXPORT QUANTITY.

3. VAT INVOICE FOR EXPORTED GOODS

ACCORDING TO THE GUIDELINES IN POINT 5.4, SECTION IV, PART B OF CIRCULAR NO. 122/2000/TT-BTC, THE VAT INVOICE MUST BE ISSUED AFTER THE EXPORT PROCEDURES ARE COMPLETED: CUSTOMS PROCEDURES ARE COMPLETED, AND THE GOODS ARE DELIVERED IN ACCORDANCE WITH THE CONTRACT SIGNED WITH FOREIGN TRADERS.

4. PAYMENT DOCUMENTS

PAYMENT DOCUMENTS FOR GOODS SOLD TO FOREIGN TRADERS MUST BE CONSISTENT WITH THE PURCHASE AND SALE CONTRACT AND THE CENTRAL BANK'S REGULATIONS ON CURRENCY AND PAYMENT METHODS. IN CASES OF DEFERRED PAYMENTS THAT HAVE NOT YET REACHED THE PAYMENT DEADLINE, THE BUSINESS MUST COMMIT TO PROVIDING COMPLETE DOCUMENTATION AS REQUIRED UNTIL THE PAYMENT DATE SPECIFIED IN THE CONTRACT.

THE ABOVE MENTIONED DOCUMENTATION MUST BE KEPT BY THE BUSINESS AND NOT SUBMITTED TO THE TAX AUTHORITY. WHEN DECLARING OR REFUNDING TAX, THE BUSINESS MUST CORRECTLY AND COMPLETELY DECLARE ALL RELATED PROCEDURAL DOCUMENTS FOR EXPORTED GOODS AND BE RESPONSIBLE FOR THE DECLARED DATA UNDER THE LAW. DURING TAX AUDITS, THE BUSINESS MUST PRESENT ALL RELATED DOCUMENTATION AND BE RESPONSIBLE FOR THE DECLARED DATA. DURING TAX AUDITS, THE BUSINESS MUST PRESENT ALL DOCUMENTATION RELATING TO THE DECLARED TAX AND THE REQUESTED REFUND.

EXPORTED GOODS WITHOUT THE ABOVE MENTIONED DOCUMENTATION SHALL NOT BE ELIGIBLE FOR THE 0% VAT RATE. THESE GOODS SHALL NOT BE SUBJECT TO OUTPUT VAT BUT SHALL NOT BE ALLOWED TO DEDUCT INPUT VAT RELATED TO EXPORTED GOODS; THE EXPORTING BUSINESS MUST INCLUDE THIS IN ITS COSTS.

ANY ISSUES ARISING DURING IMPLEMENTATION SHOULD BE REPORTED TO THE MINISTRY OF FINANCE (GENERAL DEPARTMENT OF TAXATION) FOR RESOLUTION.

During the implementation process, if any difficulties arise, it is recommended that agencies report to the Ministry of Finance (General Department of Taxation) for resolution.