Circular No. 119/1999/TT-BTC guides the implementation of the Value Added Tax Law (VAT) for diplomatic missions, consular offices, and international organizations' representative offices in Vietnam.

CIRCULAR

Guidelines for Implementing the Law on Value Added Tax (VAT) for Diplomatic Missions, Consular Offices, and International Organizations' Representative Offices in Vietnam

To facilitate conditions and meet the work and living needs of entities entitled to tax exemption privileges under Vietnamese law and in accordance with international conventions to which Vietnam is a party;

Pursuant to Decree No. 28/1998/NĐ-CP dated May 1, 1998 of the Government detailing the implementation of the Law on Value Added Tax;

Pursuant to Decree No. 73/CP dated July 30, 1994 of the Government detailing the implementation of the Ordinance on Privileges and Immunities for Diplomatic Missions, Consular Offices of Foreign Countries, and International Organizations' Representative Offices in Vietnam;

Pursuant to Decision No. 205/1998/QĐ-TTg dated October 19, 1998 of the Prime Minister promulgating the Regulations on Duty-Free Stores;

After reaching consensus with the Ministry of Foreign Affairs, the Ministry of Trade, the General Department of Customs, the Ministry of Finance hereby provides guidelines for implementing tax exemptions as follows:

I. OBJECTS OF VAT EXEMPTION

1- Diplomatic missions, consular offices of foreign countries, representative offices of international organizations within the United Nations system located in Vietnam (hereinafter referred to as "Representative Office") and their heads shall enjoy VAT exemption privileges on imported goods and services or those purchased in the domestic market, including:

- Rental services for office premises of the Representative Office and housing for the head of the Representative Office.

- Electricity and water for daily use at the office premises of the Representative Office and housing for the head of the Representative Office.

- Telephone, Fax, and installation services (including mobile phones).

Gasoline or diesel fuel for vehicles of the Representative Office bearing diplomatic license plates (NG), not exceeding 400 liters/month/vehicle.

- Goods and services used for constructing, maintaining, repairing, and preserving buildings that are assets of the sending country used as office premises or housing for the head of the Representative Office.

- Office equipment and facilities for the Representative Office and housing for the head of the Representative Office.

- Imported goods or those purchased domestically as stipulated in Circular No. 04/TTLB dated February 12, 1996.

- Certain essential goods purchased from duty-free stores.

2- Diplomatic officials, consular officials, officials of international organizations, and administrative technical staff of the Representative Office shall enjoy VAT exemption privileges on imported goods and services or those purchased in the domestic market, including:

- Goods and services imported or purchased domestically within the specified quantities as stipulated in Circular No. 04/TT-LB dated February 12, 1996 of the Joint Ministries of Trade, Foreign Affairs, Finance, and the General Department of Customs.

- Gasoline or diesel fuel for vehicles bearing diplomatic license plates (NG), not exceeding 300 liters/month/vehicle.

- Certain essential goods purchased from duty-free stores.

3- Representative offices of intergovernmental international organizations outside the United Nations system and their members, as well as family members living together with them as a household, shall enjoy VAT exemption privileges according to international treaties signed between Vietnam and such organizations.

Representative offices of non-governmental international organizations and their members, as well as family members living together with them as a household, shall enjoy VAT exemption privileges according to agreements signed between the Vietnamese Government and such organizations.

4- Cases where it is permitted to transfer property such as housing, cars, motorcycles among diplomatic missions, consular offices, and members of diplomatic missions and consular offices are exempted from VAT application.

II. PROCEDURES FOR IMPLEMENTING VAT EXEMPTION

Goods and services listed above provided by Vietnamese or foreign organizations legally operating in Vietnam to the objects mentioned in points 1, 2, and 3 above are not subject to VAT. The Representative Office and individuals mentioned in points 1, 2, and 3 above are not required to pay VAT when purchasing these goods and services.

When issuing invoices to entities enjoying VAT exemption privileges, businesses must issue invoices but not record VAT, instead clearly stating on the invoice that the entity enjoys VAT exemption privileges.

Entities and individuals mentioned in points 1, 2, and 3 above when purchasing goods and services must provide the seller with a Certificate of Exemption from VAT issued by the Protocol Department of the Ministry of Foreign Affairs (original or certified copy with the stamp and signature of the authorized person of the entity enjoying diplomatic immunity).

The Certificate of Exemption from VAT includes the following main contents:

Name and address in Vietnam of the entity enjoying VAT exemption privileges;

Name of goods and services exempted from VAT;

- Name of the organization or individual providing goods and services. In case of imported goods, it should be noted as imported goods;

- Contract number and date between the provider and the entity enjoying VAT exemption privileges.

III. EFFECTIVE DATE OF IMPLEMENTATION

These provisions of this Circular apply to entities enjoying diplomatic privileges on a reciprocal basis.

This Circular replaces Circular No. 43/1999/TT-BTC dated April 20, 1999 and takes effect 15 days after its issuance. Other tax regulations applicable to entities enjoying tax exemption privileges not covered by this Circular shall be implemented in accordance with current tax laws and guidance provided in Circular No. 04/TTLB dated February 12, 1996 of the Joint Ministries of Foreign Affairs, Trade, Finance, and the General Department of Customs.