Circular No. 114 TC/TCT GUIDING THE IMPLEMENTATION OF Decree No. 182/CP dated November 10, 1994 OF THE GOVERNMENT DETAILING THE DECISION OF THE STANDING COMMITTEE OF THE NATIONAL ASSEMBLY No. 216 NQ/UBTVQH9 ON AMENDING AND SUPPLEMENTING THE BUSINESS INCOME TAX RATES FOR CERTAIN INDUSTRIES IN THE BUSINESS INCOME TAX TABLE

CIRCULAR

Guidelines for implementing Decree No. 182/CP dated November 10, 1994 of the Government detailing the implementation of Resolution No. 216/NQ/UBTVQH9 of the Standing Committee of the National Assembly on amending and supplementing the business tax rate for certain industries in the business tax schedule.

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- Based on the Business Tax Law passed by the Eighth National Assembly on June 30, 1990; the Law Amending and Supplementing Certain Provisions of the Business Tax Law passed by the Ninth National Assembly on July 5, 1993;

- Based on Decree No. 182/CP dated November 10, 1994 of the Government detailing the implementation of Resolution No. 216/NQ/UBTVQH9 dated August 30, 1994 of the Standing Committee of the National Assembly on amending and supplementing the business tax rates for certain industries in the business tax schedule;

The Ministry of Finance guides the implementation of the amended and supplemented business tax rates as follows:

A- REGARDING THE AMENDED AND SUPPLEMENTED BUSINESS TAX RATES

The business tax rates and points specified in the business tax schedule issued together with Decree No. 55/CP dated August 28, 1993 of the Government "detailing the implementation of the Business Tax Law and the Law Amending and Supplementing Certain Provisions of the Business Tax Law" have been amended and supplemented according to Article 1 of Decree No. 182/CP dated November 10, 1994 of the Government as follows:

PART I- INDUSTRY

6. Production and assembly of electronic products: 8%

Specifically: Specialized electronic machinery and equipment: 4%

7. Chemical products: 4%

Specifically: - Basic chemicals, fertilizers: 1%

 - Insecticides and other chemicals

serving agricultural production: 0.5%

 - Oil, grease: 2%

9. Construction materials including clinker: 5%

Specifically: - Cement:

+ Grades P300 and above: 10%

+ Grades below P300: 6%

 - Concrete mortar: 3%

12. Paper and paper products:

a. Various types of paper: 2%

Specifically: Pulp, newspaper, school exercise books: 1%

b. Products made of paper: 4%

18. Fibers, textiles, cotton:

a. Various types of fibers (including carpet yarn, rattan yarn, silk, straw yarn), threads: 2%

Specifically: Wool fibers, synthetic fibers: 4%

b. Various types of textiles: 5%

Specifically: Rattan, mat, straw, curtain and handcrafted textile products: 3%

c. Processing of domestically grown cotton: 1%

22. Printing and publishing:

a. Printing and publishing political books, textbooks

science and technology books, books for children,

newspapers printed in ethnic minority languages: 0%

c. Printing and publishing various types of books: 1%

b. Printing and publishing various types of newspapers: 0.5%

d. Producing and publishing films, music tapes, video discs:

 - Producing and publishing films: 1%

Specifically: documentary films, revolutionary topic films

children's topic films, scientific topic films: 0%

 - Producing pre-recorded music tapes, video tapes, CD-ROMs: 1%

 - Producing unrecorded music tapes, video tapes: 2%

24. Sports equipment, musical instruments, and spare parts: 1%

PART IV- TRADE

9. Foreign exchange trading, real estate trading:

a. Foreign exchange trading: 0.5%

b. Real estate trading (including building houses for sale): 4%

PART VI- SERVICES

15. Special services:

a. Dancing: 30%

b. Horse racing: 20%

c. Issuing lottery tickets and other lottery activities: 30%

Specifically in mountainous provinces: 20%

d. Ship agency: 40%

e. Transport brokerage and other types of brokerage: 15%

g. Golf course operation: 20%

B- REGARDING THE IMPLEMENTATION OF THE AMENDED AND SUPPLEMENTED BUSINESS TAX RATES AS FOLLOWS:

1. Production and assembly of electronic products that are specialized machinery and equipment, the business tax rate of 4% includes:

+ Production and assembly of specialized equipment for telephones, radio, wireless telegraph, radio broadcasting, and television broadcasting.

+ Production and assembly of radar equipment.

+ Production and assembly of electronic equipment for wired telephones and telegraphs, including equipment for transmission systems.

+ Production and assembly of electronic equipment for safety signals and traffic conditions: railways, roads, rivers, ports, airports.

+ Production and assembly of audio and visual signal equipment: alarm horns, signboards, fire protection systems...

+ Production of electronic equipment systems to be installed in industrial machines (modernization with electronic equipment).

In cases where production and assembly of specialized electronic equipment are integrated with non-specialized machinery and equipment, the business tax rate of 4% applies to the total value of the integrated machinery and equipment.

For example, producing a radio transmitter system with headphones, microphones, and amplifiers integrated into one system, the business tax rate of 4% applies to the total revenue from selling the integrated system including headphones, microphones, and amplifiers.

Except for the cases mentioned above, production and assembly of other types of electronic products apply a business tax rate of 8%.

- Activities of assembling electronic products, including specialized machinery and equipment, pay business tax at a rate of 6% based on the processing fee.

- Production of products not included in the list of electronic products but equipped with electronic components apply the tax rate according to the industry or product category.

For example, production of electric fans with electronic control components applies the tax rate for the mechanical product category (consumer electronics).

2. Production of oil and grease, the tax rate of 2% applies to the production of all types of oils and greases; regardless of whether the raw materials are self-produced, purchased domestically, or imported.

Packaging and bottling of imported oils and greases for domestic sales are subject to commercial trade tax rather than production tax at this rate.

3. Production of concrete mortar, the tax rate of 3% applies to the production of cement-based concrete mortar and asphalt-based concrete mortar (used for road construction), or mortar containing both cement and asphalt or similar binders used in construction of buildings, workshops, bridges, roads... or for manufacturing concrete components.

4. Paper and paper products:

  Specifically: pulp, newspaper, school exercise books: 1%

- School exercise books are lined paper cut and bound into pads or notebooks.

a. Various types of paper: 2%

b. Paper products: 4% (paper packaging, cardboard boxes, toilet paper, paper towels, paper products used in construction, aluminum-coated paper, wallpaper, plastic-coated paper...)

5. Fibers, textiles, cotton:

b. Paper products: 4% (Paper packaging, paper boxes, envelopes, various types of toilet paper, paper towels, construction paper products, aluminum-coated paper, kraft paper, PE-coated paper, etc.)

5. Fibers, textiles, cotton:

a. Yarns of all kinds (including carpet wool yarn, rattan yarn, silk, straw yarn), threads: 2%

Specifically: Wool yarn, synthetic yarn: 4%

Synthetic yarn includes yarn produced from synthetic fibers or blended with natural cotton fibers.

b. Processing of domestically grown cotton: 1%, including activities such as removing the hull, separating seeds, sorting domestically grown cotton into various types of cotton fiber.

6. Production and publication of films, music tapes, video tapes, optical discs

- Film production involves the staging, filming, and recording of movies (film, video, slide film) by film studios and film workshops; film printing and coating. The specific tax rate for the production and publication of each film is determined based on the name and theme of the film according to the publication permit.

a. Production of pre-recorded music tapes, video tapes, optical discs, at a tax rate of 1%, applies to products directly produced and published by establishments according to the cultural sector's permit. This cultural product production is defined as the activity of building and staging programs, organizing recording sessions, technical editing, then recording onto music tapes, video tapes, optical discs for sale.

 Establishments engaged in the retail trade of tapes, including tape printing and transferring activities from existing tapes for sale, pay turnover tax based on commercial trading activities.

Tape printing and transferring services charge only service fees, subject to turnover tax at a rate of 8% on revenue.

b - Production of blank music tapes, video tapes without recorded programs, at a tax rate of 2%, applies to the production of blank tapes without packaging or with packaging; if only producing tape cases made of plastic, apply the chemical products tax rate, and if made of paper, apply the paper products tax rate.

7. Real estate business (including construction for sale), at a tax rate of 4%, applies to organizations and individuals engaged in real estate trading activities, including purchasing land, leveling, constructing infrastructure as a foundation for houses, or constructing houses for sale to other entities; taxable revenue includes all money received from these trading activities.

No turnover tax on real estate business for:

- Selling state-owned houses to tenants

- Selling residential houses not for business purposes together with the transfer of land use rights

- As stipulated in Decree No. 61/CP dated July 5, 1994 of the Government

8 - Golf course business: Turnover tax on golf course business activities at a rate of 20% includes all money received from selling membership cards, selling entry tickets for individual golf rounds, renting golf equipment (clubs, balls, shoes, clothing...), hiring instructors for lessons, and hiring staff during play.

Revenue from selling membership cards is determined based on the actual number of cards sold and the price marked on the card (including cards sold in Vietnam and abroad).

For other service activities within the golf course such as dining, sauna, massage... (if applicable), turnover tax must be paid according to the tax rate of each respective business activity. If it is not possible to separately account for revenue from each activity, the highest tax rate applicable to any business activity should be applied to the total revenue.

C-IMPLEMENTATION

The revised and supplemented turnover tax rates pursuant to Resolution No. 216/NQ/UBTVQH9 dated August 30, 1994 of the Standing Committee of the National Assembly and the implementation guidance provided in this Circular shall take effect from September 1, 1994. Specifically, for newly added golf course business activities, turnover tax on golf course business revenue generated before September 1, 1994 that has not been declared and paid or only temporarily paid must now be calculated and paid according to the tax rate specified in this Circular.

Tax authorities are responsible for guiding and inspecting units to collect and remit taxes in accordance with the Law and the implementation guidance provided in this Circular. During the implementation process, if there are difficulties or issues, units are advised to report to the Ministry of Finance for further guidance and supplementation./.