Circular No. 12401/TC/TCT stipulates the deduction and refund of VAT for agricultural, forestry, and aquatic products when purchasing without an invoice. The document guides Tax Departments to implement uniformly and resolve this issue conclusively.
Scope of application
Provincial and centrally-administered city Tax Departments; enterprises purchasing agricultural, forestry, and aquatic products
Key points
- Enterprises purchasing agricultural, forestry, and aquatic products without invoices must prepare a list and deduct input VAT according to the prescribed percentage (Article 1).
- If an enterprise fully complies with domestic sales or export invoice regulations and applies the correct VAT rate for goods sold, it is entitled to deduct input VAT based on the purchase list (Point 1).
- Enterprises not complying with the aforementioned conditions will be penalized and will not be allowed to deduct or refund VAT for purchased goods (Point 2).
- During tax settlement inspections, if sufficient evidence confirms that an enterprise has falsely declared purchase volumes and deducted or refunded taxes, violations will be handled according to regulations (Point 3).
- Tax Departments must promptly resolve pending VAT refund applications and cases involving VAT refunds and tax settlements from 2003 and earlier for enterprises purchasing agricultural, forestry, and aquatic products (Final Point).
🌐 Social impact of this document
- Assist enterprises purchasing agricultural, forestry, and aquatic products in complying with VAT regulations.
- Strengthen management and oversight of VAT deductions and refunds for agricultural, forestry, and aquatic products.
- This may cause difficulties for enterprises not fully implementing domestic sales or export invoice regulations.
❓ Frequently asked questions
What must an enterprise purchasing agricultural, forestry, and aquatic products without invoices do?
Must prepare a list and deduct input VAT according to the prescribed percentage.
For enterprises fully complying with domestic sales or export invoice regulations, what rights are granted?
Entitled to deduct input VAT based on the purchase list.
What penalties will an enterprise face if it does not comply with the aforementioned conditions?
Will be penalized and will not be allowed to deduct or refund VAT for purchased goods.
During tax settlement inspections, what actions are taken if sufficient evidence confirms that an enterprise has falsely declared purchase volumes and deducted or refunded taxes?
Violations will be handled according to regulations.
Within what timeframe must Tax Departments resolve pending VAT refund applications?
Must promptly resolve pending VAT refund applications and cases involving VAT refunds and tax settlements from 2003 and earlier.
Full text
LETTER
OF THE MINISTRY OF FINANCE NUMBER 12401 TC/TCT DATED OCTOBER 29, 2004
REGARDING VAT EXEMPTION AND REFUND FOR AGRICULTURAL, FOREST, AND FISHERY PRODUCTS
AGRICULTURAL, FORESTRY AND FISHERY PRODUCTS
RESPECTED: PROVINCE TAX BUREAUS
In recent times, the Ministry of Finance has received comments from several enterprises and localities regarding difficulties and obstacles in verifying purchased goods to determine VAT exemption or refund for certain products without invoices but with inventory lists established according to regulations; concerning this matter, the Ministry of Finance provides its opinion as follows:
- According to provisions under the Law on Value-Added Tax (VAT), Decree No. 28/1998/NĐ-CP dated May 11, 1998 and Decree No. 79/2000/NĐ-CP dated December 29, 2000 of the Government, Circular No. 89/1998/TT-BTC dated June 27, 1998 and Circular No. 122/2000/TT-BTC dated December 29, 2000 of the Ministry of Finance, businesses purchasing agricultural, forest, and fishery products from producers or fishermen without invoices may establish inventory lists and calculate input VAT deduction according to prescribed percentages for these items.
To implement uniformly and resolve definitively issues related to tax settlement and VAT refund for enterprises purchasing agricultural, forest, and fishery products under established regulations, the Tax Bureaus are requested to carry out as follows:
1. For enterprises fully complying with domestic sales or export invoice documentation requirements, applying correct VAT rates on sold goods; having payment receipts from buyers for domestic sales or export documents according to regulations, customs confirmation for exported goods; accurately recording revenue, if upon verification it is determined that the enterprise has established purchase inventory lists and calculated input VAT deduction based on actual payment receipts, purchase invoices, and recorded purchased goods in stock, then the tax authority shall base calculations of VAT exemption or refund for these groups of items on the information declared by the enterprise.
2. For enterprises not fully complying with the above conditions, specific violations must be identified for handling: if sold goods are not fully invoiced and do not accurately reflect sales figures, then revenue will be estimated to calculate tax; if purchased goods lack proper purchase documentation or discrepancies exist between purchase documents and inventory lists or financial records, VAT exemption or refund shall not apply to the value of these purchases, while measures to estimate corporate income tax (CIT) shall also be applied.
3. For enterprises currently under tax inspection for settlement or refund, if the tax authority has sent verification requests regarding purchased and sold goods, the content and timeframe of the verification must be clearly defined. If verification results indicate that the enterprise falsely declared purchase figures and VAT exemption amounts, violations will be handled according to regulations. In cases where verification responses are delayed beyond the specified date, handling shall be based on the deadline for response. Where verification does not provide sufficient evidence of violation and the enterprise can prove actual purchases and consumption, no exclusion of declared revenue or VAT refund should occur.
Tax Bureaus are requested to implement these guidelines promptly to resolve pending VAT refund applications and tax settlement cases from 2003 and earlier for enterprises purchasing agricultural, forest, and fishery products eligible for VAT exemption based on inventory lists. Cases already settled according to previous regulations and guidance documents shall not be adjusted.
During implementation, any issues encountered should be reported to the Ministry of Finance for further consideration and resolution.
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