Joint Circular No. 113/1998/TTLT-BTC-BQP guiding the implementation of tax policies for business operations and services of units under the Ministry of National Defense

JOINT CIRCULAR

JOINT CIRCULAR NO. 113/1998/TTLT-BTC-BQP OF THE MINISTRY OF FINANCE AND THE MINISTRY OF NATIONAL DEFENSE ON AUGUST 7, 1998 GUIDING THE IMPLEMENTATION OF TAX POLICIES FOR PRODUCTION, BUSINESS, AND SERVICE ACTIVITIES OF UNITS UNDER THE MINISTRY OF NATIONAL DEFENSE

BASED ON CURRENT LAWS AND ORDINANCES ON TAXES AND THE STATE BUDGET LAW;
IN ORDER TO BE CONSISTENT WITH THE CHARACTERISTICS OF PRODUCTION AND BUSINESS ACTIVITIES OF UNITS UNDER THE MINISTRY OF NATIONAL DEFENSE, THE MINISTRY OF FINANCE AND THE MINISTRY OF NATIONAL DEFENSE ISSUE GUIDELINES FOR THE IMPLEMENTATION OF TAX POLICIES FOR PRODUCTION, BUSINESS, AND SERVICE ACTIVITIES OF UNITS UNDER THE MINISTRY OF NATIONAL DEFENSE AS FOLLOWS:

I. SCOPE OF APPLICATION:

1. TAXPAYERS: ALL UNITS UNDER THE MINISTRY OF NATIONAL DEFENSE ENGAGED IN PRODUCTION, CONSTRUCTION, TRANSPORTATION, COMMERCE, FOOD SERVICES, AND OTHER BUSINESS ACTIVITIES (HEREINAFTER REFERRED TO AS PRODUCTION AND BUSINESS) MUST DECLARE AND PAY ALL TYPES OF TAXES AND OTHER REVENUES INTO THE STATE BUDGET ACCORDING TO THE PROVISIONS OF CURRENT LAWS AND ORDINANCES ON TAXES AND THE CURRENT SYSTEM OF STATE BUDGET COLLECTION.

2. TEMPORARILY, NO BUSINESS INCOME TAX WILL BE COLLECTED FROM THE PRODUCTION AND SERVICE ACTIVITIES OF WEAPONS AND SPECIAL EQUIPMENT MAINTENANCE AND REPAIR BY UNITS UNDER THE MINISTRY OF NATIONAL DEFENSE.

II. REGISTRATION, DECLARATION, PAYMENT, AND SETTLEMENT OF TAXES:

1. ALL UNITS UNDER THE MINISTRY OF NATIONAL DEFENSE INCLUDING STATE ENTERPRISES ENGAGED IN BUSINESS, ADMINISTRATIVE AND PUBLIC SERVICE UNITS UTILIZING TECHNICAL MATERIALS AND LABOR TO PRODUCE GOODS, PROVIDE SERVICES FOR CIVIL ECONOMY (EXCEPT STATE ENTERPRISES ENGAGED IN PUBLIC SERVICES FOLLOWING THE GUIDELINES AT POINT 2 BELOW) MUST REGISTER, DECLARE, AND PAY ALL TAXES AND OTHER REVENUES REQUIRED BY LAW (BUSINESS INCOME TAX, SPECIAL CONSUMPTION TAX, INCOME TAX, USE OF CAPITAL FEES, ETC.) INTO THE STATE BUDGET WITH THE LOCAL TAX AUTHORITIES WHERE THE UNITS ARE LOCATED.

2. FOR STATE ENTERPRISES ENGAGED IN PUBLIC SERVICES UNDER THE MINISTRY OF NATIONAL DEFENSE, THE REGISTRATION, DECLARATION, PAYMENT, AND SETTLEMENT OF TAXES SHALL BE AS FOLLOWS:

a. DECLARE, PAY, AND SETTLE BUSINESS INCOME TAX, SPECIAL CONSUMPTION TAX, NATURAL RESOURCES TAX, HIGH INCOME PERSONAL INCOME TAX, AND ANY FEES AND CHARGES (IF APPLICABLE) FROM PUBLIC SERVICE ACTIVITIES AND OTHER BUSINESS ACTIVITIES OUTSIDE PUBLIC SERVICE TASKS ACCORDING TO THE CURRENT LAWS AND REGULATIONS ON TAXES AND OTHER REVENUES WITH THE LOCAL TAX AUTHORITIES WHERE THE UNITS ARE LOCATED.

PROCEDURES AND SEQUENCES FOR DECLARING, PAYING, AND SETTLEMENT OF TAXES AND OTHER REVENUES MENTIONED ABOVE SHALL BE IMPLEMENTED ACCORDING TO THE GUIDELINES ISSUED BY THE MINISTRY OF FINANCE FOR THE IMPLEMENTATION OF CURRENT LAWS AND ORDINANCES ON TAXES, FEES, AND OTHER REVENUES.

b. DECLARE, PAY, AND SETTLE CORPORATE INCOME TAX (INCLUDING INCOME FROM PUBLIC SERVICE TASKS AND INCOME FROM OTHER BUSINESS ACTIVITIES OUTSIDE PUBLIC SERVICE TASKS), AND OTHER REVENUES AS PROVIDED FOR IN POINT 3, SECTION II OF CIRCULAR NO. 32/1998/TT-BTC DATED MARCH 17, 1998 OF THE MINISTRY OF FINANCE GUIDING THE IMPLEMENTATION OF TAX POLICIES AND OTHER STATE BUDGET REVENUES FOR STATE ENTERPRISES ENGAGED IN PUBLIC SERVICES ACCORDING TO THE FOLLOWING PROCEDURES AND SEQUENCES:

b1. ANNUALLY, BASED ON THE PLANS ASSIGNED BY THE MINISTRY OF NATIONAL DEFENSE, THE ENTERPRISES MUST PREPARE PLANS FOR COLLECTING AND PAYING TAXES AND OTHER REVENUES AND REPORT THEM TO THE MINISTRY OF NATIONAL DEFENSE FOR COMBINED REPORTING TO THE MINISTRY OF FINANCE, INCLUDING SEPARATELY THE CORPORATE INCOME TAX AND OTHER REVENUES THAT THE UNITS MUST DECLARE AND PAY TO THE MINISTRY OF NATIONAL DEFENSE.

b2. DURING THE PLAN PERIOD, EACH QUARTER, THE ENTERPRISES MUST PREPARE TAX DECLARATIONS FOR CORPORATE INCOME TAX AND OTHER REVENUES AND SEND THEM TO THE MINISTRY OF NATIONAL DEFENSE AND THE MINISTRY OF FINANCE, SPECIFYING THE AMOUNTS TO BE PAID, ALREADY PAID, AND STILL OWED FOR EACH ITEM; SIMULTANEOUSLY, THEY MUST ISSUE A STANDING ORDER TO PAY THE CORPORATE INCOME TAX AND OTHER REVENUES DIRECTLY INTO THE ACCOUNT OF THE MINISTRY OF NATIONAL DEFENSE OPEN AT THE STATE TREASURY IN HANOI CITY. THE AMOUNTS OF CORPORATE INCOME TAX AND OTHER REVENUES PAID BY STATE ENTERPRISES ENGAGED IN PUBLIC SERVICES UNDER THE MINISTRY OF NATIONAL DEFENSE MUST BE MONITORED AND ACCOUNTED FOR SEPARATELY. PERIODICALLY AND AT YEAR-END (OR IN SPECIAL CASES), THE MINISTRY OF NATIONAL DEFENSE MUST PREPARE A COMBINED REPORT (ATTACHED WITH A DETAIL LIST OF EACH TAX ITEM SUBMITTED BY EACH UNIT) WITH THE ENDORSEMENT OF THE STATE TREASURY IN HANOI CITY AND SEND IT TO THE MINISTRY OF FINANCE FOR REVIEW AND DECISION OR TO RECORD THE REVENUE INTO THE STATE BUDGET (TRANSFER 100% TO THE CENTRAL BUDGET) WHILE RECORDING EXPENSES FROM THE STATE BUDGET FOR THE MINISTRY OF NATIONAL DEFENSE, OR DEPOSIT INTO THE STATE BUDGET. b3. AT THE END OF THE YEAR, WITHIN THE PRESCRIBED TIME LIMIT, STATE ENTERPRISES ENGAGED IN PUBLIC SERVICES UNDER THE MINISTRY OF NATIONAL DEFENSE MUST REPORT THE SETTLEMENT OF TAXES AND OTHER REVENUES TO BE PAID INTO THE STATE BUDGET ACCORDING TO CURRENT REGULATIONS, CLEARLY DISTINGUISHING THE AMOUNTS DECLARED AND PAID LOCALLY, THE AMOUNTS OF CORPORATE INCOME TAX AND OTHER REVENUES DECLARED AND PAID DIRECTLY TO THE MINISTRY OF NATIONAL DEFENSE, AND THE AMOUNTS STILL OWED FOR EACH TAX ITEM AS REQUIRED.

III. EXEMPTION AND REDUCTION OF TAXES:

1. UNITS ENGAGED IN BUSINESS UNDER THE MINISTRY OF NATIONAL DEFENSE (INCLUDING BOTH BUSINESS AND PUBLIC SERVICE ACTIVITIES) ARE ENTITLED TO EXEMPTION AND REDUCTION OF TAXES ACCORDING TO THE PROVISIONS OF CURRENT LAWS AND ORDINANCES ON TAXES AND OTHER REVENUES.

2. Procedures and authority for granting tax exemptions and reductions:

a. PROCEDURES, SEQUENCES, AND AUTHORITY TO GRANT EXEMPTION AND REDUCTION OF TAXES FOR UNITS MENTIONED IN POINT 1, SECTION II AND FOR STATE ENTERPRISES ENGAGED IN PUBLIC SERVICES ELIGIBLE FOR EXEMPTION AND REDUCTION OF THE TAXES MENTIONED IN POINT 2a, SECTION II OF THIS CIRCULAR SHALL BE IMPLEMENTED ACCORDING TO THE GUIDELINES ISSUED BY THE MINISTRY OF FINANCE FOR THE IMPLEMENTATION OF CURRENT LAWS AND ORDINANCES ON TAXES.

b. PROCEDURES AND AUTHORITY TO GRANT EXEMPTION AND REDUCTION OF CORPORATE INCOME TAX FOR STATE ENTERPRISES ENGAGED IN PUBLIC SERVICES UNDER THE MINISTRY OF NATIONAL DEFENSE AS PROVIDED FOR IN POINT 2b, SECTION II OF THIS CIRCULAR SHALL BE IMPLEMENTED AS FOLLOWS:

STATE ENTERPRISES ENGAGED IN PUBLIC SERVICES ELIGIBLE FOR EXEMPTION AND REDUCTION OF CORPORATE INCOME TAX MUST COMPLETE ALL NECESSARY DOCUMENTS AND PROCEDURES TO REQUEST EXEMPTION AND REDUCTION OF TAXES ACCORDING TO THE PROVISIONS AND SEND THEM TO THE MINISTRY OF NATIONAL DEFENSE FOR REVIEW AND CONSIDERATION OF EACH CASE. AFTER REVIEW AND CONSIDERATION, IF THE CONDITIONS FOR EXEMPTION AND REDUCTION OF TAXES ARE MET, THE MINISTRY OF NATIONAL DEFENSE WILL ISSUE A DOCUMENT (SPECIFYING THE BASIS, REASON, AND AMOUNT REQUESTED FOR EXEMPTION AND REDUCTION) TO THE MINISTRY OF FINANCE FOR REVIEW AND DECISION TO GRANT EXEMPTION AND REDUCTION OF TAXES FOR EACH CASE ACCORDING TO THE LAW.

IV. IMPLEMENTATION ORGANIZATION:

1. Units engaged in business activities under the Ministry of National Defense (including state-owned enterprises operating public services) are responsible for declaring and paying taxes to the State budget in accordance with the guidance provided in Section II of this Circular. In case of violation of tax laws, they will be subject to administrative penalties in accordance with the Government's regulations on administrative sanctions in the field of taxation.

2. Tax authorities at all levels have the duty to guide, inspect, and urge units under the Ministry of National Defense that engage in production and business activities to declare and pay taxes in compliance with current tax laws and the guidance provided in this Circular.

3. The Ministry of National Defense is responsible for coordinating with tax authorities to regularly monitor, inspect, and urge state-owned enterprises operating public services directly under its jurisdiction to timely declare and pay income tax and other revenues in accordance with the guidance provided in Point 2, Section II of this Circular.

4. This Circular takes effect fifteen days from the date of signature, replacing Circular No. 08 TT/LB dated May 18, 1992, issued jointly by the Ministry of Finance and the Ministry of National Defense. Other provisions of Laws and Ordinances on taxation not mentioned in this Circular shall continue to be implemented in accordance with current regulations.

During the implementation process, if there are difficulties or obstacles, units are requested to promptly report to the Ministry of Finance and the Ministry of National Defense for research and resolution.