Circular No. 159/2012/TT-BTC amending and supplementing Circular No. 152/2011/TT-BTC dated November 11, 2011 guiding the implementation of Decree No. 67/2011/NĐ-CP dated August 8, 2011 of the Government detailing and guiding the implementation of certain provisions of the Law on Environmental Protection Tax.

CIRCULAR

Amending and supplementing Circular No. 152/2011/TT-BTC dated November 11, 2011

guiding the implementation of Decree No. 67/2011/NĐ-CP dated August 8, 2011

of the Government detailing and guiding the implementation of certain provisions of the Law on Environmental Protection Tax

And guiding the implementation of certain provisions of the Law on Environmental Protection Tax

______________________

Pursuant to the Law on Environmental Protection Tax No. 57/2010/QH12 dated November 15, 2010;

Pursuant to the Law on Tax Administration No. 78/2006/QH11 dated November 29, 2006 and the Government's Decrees detailing the implementation of the Law on Tax Administration;

Pursuant to Decree No. 67/2011/NĐ-CP dated August 8, 2011 of the Government detailing and guiding the implementation of certain provisions of the Law on Environmental Protection Tax and Decree No. 69/2012/NĐ-CP dated September 14, 2012 of the Government amending and supplementing Clause 3, Article 2 of Decree No. 67/2011/NĐ-CP dated August 8, 2011 of the Government;

Pursuant to Government Decree No. 118/2008/NĐ-CP dated November 27, 2008 stipulating the functions, powers, tasks, and organizational structure of the Ministry of Finance;

Considering the proposal of the Director of the Tax Policy Department;

The Minister of Finance hereby promulgates this Circular amending and supplementing Circular No. 152/2011/TT-BTC dated November 11, 2011 guiding the implementation of Decree No. 67/2011/NĐ-CP (amended and supplemented by Decree No. 69/2012/NĐ-CP of the Government).

Article 1. Amending and supplementing Clause 4, Article 1 as follows:

"4. Plastic bags subject to tax (plastic bags) are types of plastic thin packaging bags with a bag shape (having a mouth, bottom, and sides, and able to contain products inside) made from single-layer HDPE (high density polyethylene resin), LDPE (low density polyethylene) or LLDPE (linear low density polyethylene resin) film, except for pre-packaged goods packaging and plastic bags meeting environmental-friendly criteria from the date they are certified as environmentally friendly by the competent authority according to regulations of the Ministry of Natural Resources and Environment.

Pre-packaged goods packaging (including those in bag form and not in bag form) under this clause is defined specifically as follows:

a) Pre-packaged goods packaging includes:

a1) Pre-packaged goods packaging imported.

a2) Packaging produced or imported by organizations, households, or individuals for packaging products produced, processed, purchased, or packaged by such organizations, households, or individuals.

Example 1: Enterprise A produces or imports 100 kg of packaging (plastic bags) to package shoes (shoes produced, processed, purchased, or packaged by Enterprise A), then the aforementioned 100 kg of packaging does not fall within the scope of environmental protection tax.

Packaging that producers or importers have committed or declared at the import stage for product packaging but later used for exchange, internal consumption, or gifts shall be declared and taxed by the producers or importers of the packaging according to the regulations on tax management.

Example 2: Enterprise A produces or imports 100 kg of packaging (plastic bags), Enterprise A has committed or declared at the import stage for shoe packaging (shoes produced, processed, purchased, or packaged by Enterprise A). If Enterprise A uses only 20 kg of packaging for shoe packaging and uses 30 kg for exchange, 40 kg for internal consumption, and 10 kg for gifts, then Enterprise A must declare and pay environmental protection tax on the 80 kg of packaging used for exchange, internal consumption, and gifts, and be subject to penalties under the regulations on tax management.

a3) Packaging purchased directly from producers or importers by organizations, households, or individuals for packaging products produced, processed, purchased, or packaged by such organizations, households, or individuals.

Example 3: Enterprise B purchases directly from Enterprise A (producer or importer of packaging) 200 kg of packaging to package shirts (shirts produced, processed, purchased, or packaged by Enterprise B), then the aforementioned 200 kg of packaging does not fall within the scope of environmental protection tax.

Packaging that purchasers do not use for product packaging (with commitments to purchase packaging for product packaging) but instead use for exchange, internal consumption, gifts, or sale to other organizations, households, or individuals shall be declared and taxed by the purchasers to the direct tax management agency and be subject to penalties under the regulations on tax management.

Example 4: Enterprise B purchases directly from Enterprise A (producer or importer of packaging) 200 kg of packaging for product packaging (with commitments to purchase packaging for product packaging), shoes produced, processed, purchased, or packaged by Enterprise B. If Enterprise B uses only 50 kg of packaging for shoe packaging and uses 20 kg for exchange, 30 kg for internal consumption, 40 kg for gifts, and 60 kg for sale to Enterprise C, then Enterprise B must declare and pay environmental protection tax to the direct tax management agency on the 150 kg of packaging used for exchange, internal consumption, gifts, and sale to Enterprise C, and be subject to penalties under the regulations on tax management.

a4) Pre-packaged goods packaging specified in sub-clause a2 and a3 of this point does not include bags used to carry goods when selling.

Example 5: Supermarket A or Store B purchases directly 100 kg of plastic bags from Enterprise C (producer or importer), of which 50 kg of plastic bags are used to carry goods sold to customers and 50 kg of plastic bags are used for product packaging (products produced, processed, purchased, or packaged by Supermarket A or Store B). In this case, the 50 kg of plastic bags used to carry goods are not considered pre-packaged goods packaging.

b) Packaging produced or imported and identified as pre-packaged goods packaging specified in sub-clause a2 and a3 of this point must have the following documents:

b1) For packaging produced by organizations, households, or individuals (referred to as packaging producers):

- In the case where the packaging material for products is produced or processed by the producer of such packaging material, the packaging material producer must submit to the directly managing tax authority a certified copy of the commitment letter signed by the legal representative of the packaging material producer and stamped (if the packaging material producer is a legal entity) regarding the self-production of packaging materials for product packaging at the time of producing packaging materials (the commitment letter must clearly state the quantity of packaging materials produced, the expected quantity of products to be produced or processed, the quantity of products requiring packaging, and the quantity of packaging materials used for product packaging).

- In the case where the packaging material for products is purchased by the packaging material producer for product packaging or provided as a packaging service, in addition to submitting to the directly managing tax authority a certified copy of the commitment letter signed by the legal representative of the packaging material producer and stamped (if the packaging material producer is a legal entity) regarding the self-production of packaging materials for product packaging at the time of producing packaging materials (the commitment letter must clearly state the quantity of packaging materials produced, the expected quantity of products to be purchased or received for packaging, the quantity of products requiring packaging, and the quantity of packaging materials used for product packaging), the packaging material producer must also provide: A copy of the Sales Contract for purchasing products (in the case of purchasing products for packaging) or a copy of the Product Packaging Service Contract (in the case of providing packaging services) directly signed between the packaging material producer and the organization, household, or individual selling products or having products that need packaging.

- In the case where the produced packaging material is sold directly to another organization, household, or individual (referred to as the packaging material buyer) for product packaging, the packaging material producer must have:

+ A copy of the Sales Contract for packaging material directly signed between the packaging material producer and the packaging material buyer.

+ A certified copy of the commitment letter regarding the purchase of packaging material for product packaging signed by the legal representative of the packaging material buyer and stamped (if the packaging material buyer is a legal entity) sent by the packaging material buyer to the packaging material producer (the commitment letter must clearly state the expected quantity of products to be produced or processed by the packaging material buyer for their own production or processing; the expected quantity of products to be purchased by the packaging material buyer for packaging; the expected quantity of products to be received for packaging by the packaging material buyer for packaging services; the quantity of products requiring packaging, and the quantity of packaging materials used for product packaging).

+ An invoice list for the sale of packaging material according to Form No. 03/TBVMT issued together with this Circular. When issuing an invoice for the sale of packaging material, all items specified on the value-added tax invoice (or sales invoice used by entities subject to direct method VAT taxation) must be fully recorded, in addition to adding a line stating "sold under Contract No... dated... month... not subject to environmental protection tax" on the invoice.

b2) For imported packaging material, the importer of packaging material must provide to the customs authority upon importation: The customs declaration file for imported packaging material as prescribed. The importer declares and bears responsibility for the content of the declaration for importing packaging material for product packaging or for direct sale to the packaging material buyer for product packaging, in accordance with the provisions of the law.

When directly selling imported packaging material (declared for product packaging upon importation) to the packaging material buyer for product packaging, the importer of packaging material must have:

+ A copy of the Sales Contract for packaging material directly signed between the packaging material importer and the packaging material buyer.

+ A certified copy of the commitment letter regarding the purchase of packaging material for product packaging signed by the legal representative of the packaging material buyer and stamped (if the packaging material buyer is a legal entity) sent by the packaging material buyer to the packaging material importer (the commitment letter must clearly state the expected quantity of products to be produced or processed by the packaging material buyer for their own production or processing; the expected quantity of products to be purchased by the packaging material buyer for packaging; the expected quantity of products to be received for packaging by the packaging material buyer for packaging services; the quantity of products requiring packaging, and the quantity of packaging materials used for product packaging).

+ An invoice list for the sale of packaging material according to Form No. 03/TBVMT issued together with this Circular. When issuing an invoice for the sale of packaging material, all items specified on the value-added tax invoice (or sales invoice used by entities subject to direct method VAT taxation) must be fully recorded, in addition to adding a line stating "sold under Contract No... dated... month... not subject to environmental protection tax" on the invoice.

In the case where imported packaging material has been cleared according to the provisions of the law, the packaging material importer shall not re-declare to be eligible for exemption from environmental protection tax."

Article 2. Amend and supplement Point 2.4 of Clause 2, Article 2 as follows:

"2.4. Goods exported abroad (including goods exported after being processed from imported raw materials and components) directly exported by the production facility (including processing facilities) or entrusted to export trading enterprises for export shall not be subject to environmental protection tax by customs authorities on such exported goods and imported raw materials and components used for further processing and then exported abroad upon importation.

In cases where goods subject to environmental protection tax are purchased by organizations, households, or individuals for export, the production facility must declare and pay the environmental protection tax when selling such goods.

Example 6: Enterprise A imports 40 kg of plastic bags to process additional details such as printing labels or further processing to become different products compared to the initially imported plastic bags, and then exports them. Enterprise A does not need to declare and pay the environmental protection tax on the aforementioned 40 kg of plastic bags at the time of importation.

Example 7: Enterprise B imports 100 kg of restricted-use ant termite medicine as raw materials and components for use in the processing of exported goods. Enterprise B does not need to declare and pay the environmental protection tax on the aforementioned 100 kg of restricted-use ant termite medicine at the time of importation.

Article 3. Add Point 1.4 to Clause 1, Article 5 as follows:

"1.4. For multi-layer plastic bags produced or processed from single-layer HDPE, LDPE, LLDPE films and other types of films (such as PP, PA, etc.) or other materials like aluminum, paper, etc., the environmental protection tax is determined based on the percentage weight of the single-layer HDPE, LDPE, LLDPE film within the multi-layer plastic bag. Based on the standard quantity of single-layer HDPE, LDPE, LLDPE film used in producing or processing multi-layer plastic bags, the producer or importer of multi-layer plastic bags must declare and bear responsibility for their declaration.

Example 8: Enterprise A produces or imports 100 kg of multi-layer plastic bags, of which the weight of single-layer HDPE, LDPE, LLDPE film within the multi-layer plastic bags is 70%, and the weight of other types of films (PA, PP, etc.) is 30%.

Therefore, the amount of environmental protection tax that Enterprise A must pay for the 100 kg of multi-layer plastic bags is: 100 kg x 70% x 40,000 VND/kg = 2,800,000 VND.

Article 4. Supplement the end of Point 2.2 of Clause 2, Article 7 as follows:

"- In cases where gasoline, diesel, lubricating oil are imported for purposes other than sale; lubricating oil and grease are separately packaged when imported along with aircraft spare parts or machinery and equipment, the taxpayer must declare and pay the environmental protection tax to the customs authority.

- Gasoline and diesel sold according to the quantity recorded on the sales invoice or document, the taxpayer must declare and pay the environmental protection tax according to the quantity recorded on the sales invoice or document.

Article 5. Add Point 2.4 to Clause 2, Article 7 as follows:

"2.4. Goods subject to environmental protection tax produced domestically or in non-tariff zones and sold between domestic areas and non-tariff zones, within non-tariff zones, among non-tariff zones, and intra-Vietnam transactions (excluding packaging materials produced for product packaging as specified in sub-item a2 and a3 of point a of this Circular) must be declared and paid the environmental protection tax by the production facility.

The determination of exported and imported goods for calculating the environmental protection tax is made when such goods cross Vietnam's borders.

Article 6. Effectiveness

1. This Circular takes effect from November 15, 2012.

2. During implementation, if there are any difficulties, organizations and individuals are requested to promptly report to the Ministry of Finance for research and resolution./.