Circular No. 181/2013/TT-BTC guides the implementation of tax policies and tax incentives for programs and projects using official development assistance (ODA) sources and preferential loans from sponsors.

CIRCULAR

Guidelines for implementing tax policies and tax incentives for programs and projects using official development assistance (ODA)"b) In addition to the lists of public services issued according to the provisions of Clause 2, Article 4 of this Decree, specialized agencies under provincial People's Committees shall report to the provincial People's Committee for decision-making on amending, supplementing, or issuing the list of public services funded by the state budget within their jurisdiction and consistent with the local budget capacity within the approved budget by the Provincial People's Assembly, and send it to the Ministry of Finance and relevant ministries and sectors for supervision during implementation."and concessional loans from donorsNo.in conjunction with the programs and projects utilizing official development assistance (ODA)

and concessional loans from donorsỗ 24 of the Government on supporting the development of enterprises until 2020;developmentn c- Government;;

On February 20,No.2012 and guiding documents for implementation;

_____________________

 

Pursuant to the Law on Tax Administration No. 78/2006/QH11 of 2006; the Law Amending the Law on Tax Administration dated November 20, 2012 and guiding documents;1 of the National Assembly on the 7th Session of the 15th National Assembly; 11 On June 3, 2008; Law Amending Certain Provisions of the Law on Tax Administration, amended and supplemented by Decree No. 109/2025/NĐ-CP and Decree No. 193/2025/NĐ-CP Article of the Law on Military Service; Transit through, and Residence of Foreigners in Vietnam dated June 25, ;No. 21/201||| 2/QH1On June 19,June 2024;energy 11 2012 and guiding documents for implementation;FUNCTIONS, DUTIES, POWERS, ORGANIZATIONAL STRUCTURE, OPERATIONAL REGULATIONS, AND RELATIONSHIPS OF MANAGEMENT BOARDS; DUTIES, POWERS OF THE CHAIRPERSON, VICE CHAIRPERSON (IF ANY), SECRETARY, AND MEMBERS OF MANAGEMENT BOARDS195/2013/NĐ-CP dated November 21, 2013 of the Government detailing certain provisions and measures to enforce the Law on Publishingi Value Added Tax Law No. 113/2008/QH12

Pursuant to the Law on Enterprise Income Tax No. 14/2008/QH12 dated June 3, 2008, and the Law Amending and Supplementing Certain Articles of the Law on Enterprise Income Tax No. 3/QH13 dated June 19, 2013and amended and supplemented by certain articles related to conditions for investment and business and administrative procedures in the field of information and communications on November 7, 2018No. 4/2008/QH11 of June 3, 2008; the Law Amending the Corporate Income Tax Law dated June 19, 2013 and guiding documents;1On June 3,supplemented, Law No. 42/2024/QH15 ,No. 2008; Law Amending Certain Provisions of the Law on Corporate Income TaxNo. 31/201Pursuant to Decree No. 218/2013/ND-CP dated December 26, 2013 of the Government on Guidance and Direction;1;1And guiding documents for implementation;amendSpecial Consumption Tax Law No. 27/2008/QH12

Pursuant to the Law on Value Added Tax No. 113/2008/QH11 of June 3, 2008; the Law Amending the Law on Value Added Tax dated June 19, 2013 and guiding documents;June 2024; On June 14, 132008 and guiding documents for implementation;1Personal Income Tax Law No. 04/2007/QH11 6/Amending Certain Provisions of the Law on Personal Income Tax, amended and supplemented by Decree No. 109/2025/NĐ-CP and Decree No. 193/2025/NĐ-CP ,No. No. 26/2012/QH13No. 31/201Pursuant to Decree No. 218/2013/ND-CP dated December 26, 2013 of the Government on Guidance and Direction;1;1On June 22,

Pursuant to the Law on Special Consumption Tax No. 27/2008/QH11 of June 14, 2008 and guiding documents;ê2012 and guiding documents for implementation;0Amending Certain Provisions of the Customs Law No. 42/2005/QH111On June 14, 11 2005 and guiding documents for implementation;duties Value Added Tax Law No. 113/2008/QH12

On August 28,1Pursuant to the Law on Personal Income Tax No. 04/2007/QH11 of November 21, 2007; the Law Amending the Personal Income Tax Law No. 26/2012/QH13 of June 22, 2012 and guiding documents;, amended and supplemented by Decree No. 109/2025/NĐ-CP and Decree No. 193/2025/NĐ-CPPursuant to the Law on Public Investment dated November 29, 2024;No. 2000 and guiding documents for implementation;session number Decree No. 0 of August 28,12000 and guiding documents for implementation; 11 Pursuant to Decree No. 32/2019/NĐ-CP dated April 10, 2019 of the Government on assigning tasks, procurement or tendering for the supply of products and services using state budget from regular operating expenses;1Decree No. 3 of the Government on the management and utilization of official development assistance and concessional loans from donors and guiding documents for implementation; APPLICATION FOR ODA GRANTS WITHOUT REIMBURSEMENT PROJECTS Value Added Tax Law No. 113/2008/QH12

WHEREAS, Law on Customs No.No. Pursuant to Resolution No. 29/2001/QH10 of June 29, 2001; the Law Amending Certain Provisions of the Customs Law No. 42/2005/QH11 of June 14, 2005 and guiding documents;1UTILIZATION OF FUNDS FROM VARIOUS TYPES OF FINANCIAL ASSISTANCENo. Article of the Customs LawNo. 42/2005/QH11 June 14, 2005 and guiding documentsFUNCTIONS, DUTIES, POWERS, ORGANIZATIONAL STRUCTURE, OPERATIONAL REGULATIONS, AND RELATIONSHIPS OF MANAGEMENT BOARDS; DUTIES, POWERS OF THE CHAIRPERSON, VICE CHAIRPERSON (IF ANY), SECRETARY, AND MEMBERS OF MANAGEMENT BOARDS||

Pursuant to the Law on Export Duties and Import Duties No. 45/2005/QH11 of June 14, 2005 and guiding documents;05/QH11 June 14, 2005 and guiding documentsamendSpecial Consumption Tax Law No. 27/2008/QH12

Pursuant to the Ordinance on fees and charges"b) In addition to the lists of public services issued according to the provisions of Clause 2, Article 4 of this Decree, specialized agencies under provincial People's Committees shall report to the provincial People's Committee for decision-making on amending, supplementing, or issuing the list of public services funded by the state budget within their jurisdiction and consistent with the local budget capacity within the approved budget by the Provincial People's Assembly, and send it to the Ministry of Finance and relevant ministries and sectors for supervision during implementation." and fee number 38/2001/PL-UBTVQH10 August 28, 2001 and guiding documentsamendSpecial Consumption Tax Law No. 27/2008/QH12

Pursuant to Decree No. 38/2013/NĐ-CP of April 23, 2013 of the Government on management and use of official development assistance and concessional loans from donors and guiding documents;13 of the Government on managing and using official development assistance resources and concessional loan funds from donors and guiding documents for implementation;ỗ ODA GRANTS THAT ARE NOT TO BE REPAIDNo.USING FUNDS FROM VARIOUS TYPES OF FINANCING ARRANGEMENTS

Decree No. 11provisions of the Personal Income Tax Law;June 2024;energy 11 Pursuant to the Government's Decree No. 08/2008/ND-CP of January 29, 2008 defining functions, tasks, powers, and organizational structure of the Ministry of Finance;"b) In addition to the lists of public services issued according to the provisions of Clause 2, Article 4 of this Decree, specialized agencies under provincial People's Committees shall report to the provincial People's Committee for decision-making on amending, supplementing, or issuing the list of public services funded by the state budget within their jurisdiction and consistent with the local budget capacity within the approved budget by the Provincial People's Assembly, and send it to the Ministry of Finance and relevant ministries and sectors for supervision during implementation."c) Supplementing point c of Clause 3 as follows:

At the proposal of the Director General of the State Revenue总局局长的提议；

The Minister of Finance hereby issues this Circular on guidelines for implementing tax policies and tax incentives for programs and projects using official development assistance (ODA) and concessional loans from donors as follows:

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

Article 1. This Circular applies to programs and projects using official development assistance (hereinafter referred to collectively as ODA projects) and concessional loans from donors, approved by competent authorities.

Article 2. The types of taxes applicable to ODA projects and projects using concessional loans from donors, as guided by this Circular, include export duties (XK), import duties (NK), special consumption taxes (TTĐB), value added taxes (GTGT), personal income taxes (TNCN), corporate income taxes (TNDN) and other types of taxes, fees, and charges.

Article 2. Applicability

Organizations, entities, and individuals participating in or related to the implementation of programs and projects as stipulated in Article 1 of this Circular.

Article 3. Explanation of Terms

Terms used in this Circular shall have the meanings defined in Article 3 and Article 4 of Decree No. 38/2013/NĐ-CP dated April 23, 2013 of the Government on management and use of official development assistance and concessional loans from donors. In addition, in this Circular, the following terms shall be understood as follows:

- "Main contractor" refers to organizations and individuals directly signing contracts with the ODA project sponsor, concessional loan provider, or donor for the ODA project, to construct or install works or provide goods and services for the ODA project. Main contractors include foreign main contractors and domestic main contractors.

- "Subcontractor" refers to organizations and individuals directly signing contracts with the main contractor to perform part of the work under the main contractor's contract with the ODA project sponsor, concessional loan provider, or donor for the ODA project. Subcontractors include foreign subcontractors and domestic subcontractors.

Article 4. Implementation of international treaties

In cases where an international treaty (including international treaties on ODA and concessional loans) signed or joined by the Government of Vietnam provides tax regulations related to the implementation of a specific ODA or concessional loan project that differ from the guidance provided in this Circular, the application of tax policies for such ODA or concessional loan projects shall be implemented according to the signed international treaties.

Chapter II

SPECIFIC PROVISIONS

Section 1

TAX POLICY, TAX INCENTIVES AND PROCEDURES FOR REFUNDING TAX APPLIED TO NON-REPAYABLE ODA PROJECTS

DỤNG ĐỐI VỚI DỰ ÁN ODA VIỆN TRỢ KHÔNG HOÀN LẠI

Article 5. Tax Policy for Project Owners

1. Import tax, VAT, and excise tax on imported goods

The owner of non-repayable ODA projects and the main contractor implementing non-repayable ODA projects are exempted from import tax in accordance with the Law on Export Duties and Import Duties and guiding documents, and are not required to pay excise tax (if applicable). They are also exempted from VAT on goods directly imported or entrusted to be imported by the ODA project owner or the main contractor for the purpose of implementing non-repayable ODA projects.

Documents to be presented to the customs authority at the place of importation of goods in accordance with the Customs Law, the Law on Export Duties and Import Duties, and guiding documents. The customs authority shall organize the implementation of exemption from import tax, excise tax (if applicable), and VAT on imported goods for the purpose of implementing non-repayable ODA projects.

2. VAT on goods and services purchased in Vietnam

a) The owner of non-repayable ODA projects may be refunded the VAT paid when purchasing goods and services in Vietnam if the contract signed with the main contractor includes VAT and the project owner does not receive state budget funds to pay VAT. The refunding of VAT shall be carried out in accordance with the guidance provided in Article 8 of this Circular. If the project receives state budget matching funds to pay VAT, the project owner will not be eligible for refunding the input VAT paid for goods and services purchased in Vietnam regardless of whether the contract signed with the main contractor includes VAT or not.

Example 1: Project Owner A of a non-repayable ODA project has been authorized to sign a construction contract for a Children's Hospital with a bid price excluding VAT of 4 billion VND and VAT of 400 million VND (tax rate 10%), total value including VAT is 4.4 billion VND. Additionally, the said project owner has been authorized to sign a procurement contract for other goods and services with a bid price excluding VAT of 100 million VND and VAT of 10 million VND, total value including VAT is 110 million VND.

- Case 1: The project owner does not receive state budget matching funds to pay VAT:

The non-repayable ODA project owner is entitled to a refund of the input VAT paid for the construction contract and other procurement contracts for domestic goods and services, totaling 410 million VND (400 + 10).

- Case 2: The project owner receives state budget matching funds to pay VAT:

The non-repayable ODA project owner is not entitled to a refund of the input VAT paid for the construction contract and other procurement contracts for domestic goods and services, even if the contract signed with the main contractor does not include VAT.

b) In cases where the donor establishes a representative office in Vietnam and directly purchases goods and services for the implementation of non-repayable ODA projects or entrusts the ODA project owner to implement non-repayable ODA projects, the donor is entitled to a refund of the VAT paid. The refunding of VAT shall be carried out in accordance with the guidance provided in Article 8 of this Circular.

Article 6. Tax policy for main contractors and sub-contractors implementing projects

1. Import tax, export tax, special consumption tax, value-added tax on imported goods.

a) Main contractors and sub-contractors importing goods during the implementation of contracts signed with the ODA grant project sponsor shall pay import tax, special consumption tax (if applicable), and value-added tax according to the provisions of the Law on Export Tax, Import Tax, Law on Special Consumption Tax, Law on Value-Added Tax, and current guiding documents (except for goods imported by the main contractor as specified in Article 5 of this Circular).

b) Foreign main contractors and foreign sub-contractors are exempt from import tax, do not have to pay special consumption tax (if applicable), and are not subject to value-added tax on machinery, equipment, and transportation vehicles imported into Vietnam under the temporary importation, re-exportation method to serve construction works of non-repayable ODA grant projects and are exempt from export tax when re-exporting.

The procedures for exemption from import tax, non-payment of value-added tax, special consumption tax (if applicable) at the time of importation, and exemption from export tax upon re-exportation shall be carried out in accordance with the Customs Law, Law on Export Tax, Import Tax; Law on Tax Administration, and guiding documents.

Customs authorities organize the implementation of exemption from import tax, non-payment of value-added tax, special consumption tax (if applicable) at the time of importation, and exemption from export tax upon re-exportation for machinery, equipment, and transportation vehicles temporarily imported and re-exported to implement non-repayable ODA grant projects for foreign main contractors and foreign sub-contractors.

Upon completion of the construction period of the project, foreign main contractors and foreign sub-contractors must re-export the aforementioned goods. In cases where they sell the goods in the domestic market, they must obtain permission from competent state agencies and declare and pay import tax, value-added tax, and special consumption tax (if applicable) previously exempted at the time of importation according to current tax laws.

Specifically, for passenger cars with less than 24 seats and passenger-cargo vehicles equivalent to passenger cars with less than 24 seats, the exemption from import tax and special consumption tax under the temporary importation, re-exportation method does not apply. Foreign main contractors and foreign sub-contractors wishing to import these vehicles into Vietnam for use must pay import tax and special consumption tax according to regulations. Upon completion of the construction work, foreign main contractors and foreign sub-contractors must re-export the imported vehicles to their home countries and be refunded the import tax and special consumption tax according to regulations. The amount of refund and the procedures for refund shall be implemented in accordance with the Customs Law, Law on Export Tax, Import Tax, Law on Special Consumption Tax, Law on Tax Administration, and guiding documents.

2. Value-added tax, corporate income tax, and other types of taxes, fees, and charges on the provision of goods and services in Vietnam.

a) Main contractors providing goods and services to the ODA grant project sponsor must pay value-added tax (if the contract includes value-added tax), corporate income tax, and other types of taxes, fees, and charges according to tax, fee, and charge laws.

b) Sub-contractors providing goods and services to the main contractor of the ODA grant project must pay value-added tax, corporate income tax, and other types of taxes, fees, and charges according to tax, fee, and charge laws.

c) Foreign main contractors and foreign sub-contractors who receive direct payments from sponsors shall pay value-added tax directly based on the value-added tax amount and pay corporate income tax at a percentage rate based on revenue. If foreign main contractors and foreign sub-contractors receive direct payments from sponsors, they are responsible for transferring the tax payable to the ODA grant project sponsor or the foreign main contractor to pay the tax on behalf of the foreign main contractor and foreign sub-contractor according to the Law on Tax Administration and guiding documents.

d) In cases where the main contractor (regardless of whether the main contractor is a taxpayer subject to value-added tax under the deduction method or the direct payment method) signs a contract with the ODA grant project sponsor or sponsor to implement a non-repayable ODA grant project at a price excluding value-added tax and the project is not allocated state budget matching funds to pay value-added tax, the main contractor may be refunded the input value-added tax paid when purchasing goods and services to fulfill the contract signed with the project sponsor or sponsor. The refund of value-added tax shall be carried out according to the provisions of Article 8 of this Circular. If the project is allocated state budget matching funds to pay value-added tax, the main contractor shall not be refunded the input value-added tax paid for goods and services purchased in Vietnam regardless of whether the contract between the project sponsor and the main contractor includes value-added tax or not. The main contractor must declare and pay value-added tax according to the Law on Value-Added Tax and current guiding documents.

Example 2:

Company A signed a contract with the ODA grant project sponsor to implement the "School Construction Project" at a bid price excluding value-added tax.

- Case 1: The project is not allocated state budget matching funds to pay value-added tax:

Company A can be refunded the input value-added tax on goods and services purchased to serve the construction of the project according to the contract signed with the project sponsor.

- Case 2: The project is allocated state budget matching funds to pay value-added tax:

Company A cannot be refunded the input value-added tax on goods and services purchased to serve the construction of the project according to the contract signed with the project sponsor. The company must declare and pay value-added tax according to regulations.

The main contractor must separately account for input value-added tax on goods and services purchased to fulfill the contract to provide goods and services signed with the project sponsor or sponsor of the non-repayable ODA grant project. In cases where separate accounting for input value-added tax is not possible:

If the main contractor pays value-added tax under the direct payment method, they will not be eligible for a refund of value-added tax.

If the main contractor pays value-added tax under the deduction method, the main contractor shall declare, deduct, and refund value-added tax according to the provisions of the Law on Value-Added Tax, Law on Tax Administration, and guiding documents.

e) Individuals working for the main contractor or subcontractor must pay personal income tax according to the provisions of the Personal Income Tax Law. In cases where foreign individuals are confirmed by the project management agency of ODA projects as foreign experts under Clause 2, Article 7 of this Circular, they shall comply with the relevant regulations.

Article 7. Tax policies for individuals working on ODA projects

1. Vietnamese individuals and foreign individuals working for ODA projects and ODA project management boards shall declare and pay personal income tax according to the provisions of the Personal Income Tax Law and the Tax Administration Law.

2. In cases where foreign individuals are issued certificates by the project management agency confirming them as foreign experts implementing ODA programs and projects eligible for tax and fee benefits as stipulated in the Regulation on Foreign Experts Implementing ODA Programs and Projects issued together with Decision No. 119/2009/QĐ-TTg dated October 1, 2009 of the Prime Minister, such individuals shall be exempt from import tax, VAT, excise tax (if applicable), land registration fee, and personal income tax.

Article 8. Procedures and documents for Value Added Tax refunds for ODA project sponsors receiving non-reimbursable grants, representatives of donors, and main contractors eligible for VAT refunds

1. The procedures for tax registration and issuance of tax identification numbers for ODA project sponsors, donors, and main contractors shall be carried out according to the guidance provided in the Tax Administration Law and related implementing documents.

2. The documents for VAT refunds, deadlines for declaring input VAT, organizations receiving documents, and procedures for refunding VAT shall be conducted according to the guidance provided in the Tax Administration Law and related implementing documents.

In the VAT refund application submitted to the tax authority, the main contractor must clearly state the name of the ODA project, the name of the ODA project sponsor, and the contact address of the ODA project sponsor via postal service.

3. When issuing a decision on VAT refunds, the procedure for transferring documents shall be carried out according to the guidance provided in the Tax Administration Law and related implementing documents.

4. In cases where the ODA project sponsor receives funds from the state budget to pay VAT but subsequently applies for a VAT refund, upon receiving the VAT refund, the ODA project sponsor must repay the state budget the amount of VAT refunded according to the regulations.

During the review of VAT refund applications for ODA projects, if there are suspicions requiring pre-refund or post-refund inspections, the tax authority shall carry out the procedures according to the provisions of the Value Added Tax Law, the Tax Administration Law, and related implementing documents.

Section 2

TAX POLICIES AND TAX BENEFITS APPLICABLE

TO ODA LOAN FUNDED PROJECTS AND LOAN FUNDED PROJECTS WITH FAVORABLE TERMS

Article 9. Tax Policies for Project Sponsors

1. Import tax, VAT, and excise tax on imported goods.

ODA loan-funded project sponsors and loan-funded projects with favorable terms directly importing or entrusting imports shall fulfill their obligations regarding import tax, VAT, and excise tax according to the provisions of the Export Tax Law, Import Tax Law, VAT Law, Excise Tax Law, and related implementing documents.

2. VAT on goods and services purchased in Vietnam

When purchasing goods and services in Vietnam, ODA loan-funded project sponsors and loan-funded projects with favorable terms must fulfill their obligations regarding VAT according to the provisions of the VAT Law and related implementing documents.

Article 10. Tax Policies for Main Contractors and Subcontractors Implementing Projects

1. Import tax, export tax, special consumption tax, value-added tax on imported goods.

a) Main contractors and subcontractors importing goods during the implementation of contracts signed with ODA loan-funded project sponsors and loan-funded projects with favorable terms must pay import tax, excise tax (if applicable), VAT, according to the provisions of the Export Tax Law, Import Tax Law, Excise Tax Law, VAT Law, and current implementing documents.

b) Foreign main contractors and foreign subcontractors are exempt from import tax, do not have to pay excise tax (if applicable), and are not subject to VAT on machinery, equipment, and transportation vehicles imported into Vietnam through temporary importation and re-exportation for construction purposes of ODA loan-funded projects and are exempt from export tax when re-exporting as stipulated in Clause 1, Article 6 of this Circular.

Documents for exemption from import tax, non-payment of VAT, and excise tax (if applicable) at the time of importation, and exemption from export tax at the time of re-exportation shall be implemented according to the guidance provided in the Customs Law, Export Tax Law, Import Tax Law, Tax Administration Law, and related implementing documents.

For passenger cars with less than 24 seats and passenger-cargo vehicles equivalent to passenger cars with less than 24 seats, the exemption from import tax and excise tax under the temporary importation and re-exportation scheme does not apply. Foreign main contractors and foreign subcontractors wishing to import these vehicles into Vietnam for use must pay import tax and excise tax according to the regulations. Upon completion of the construction of the project, foreign main contractors and foreign subcontractors must re-export the imported vehicles to outside the country and be refunded the import tax and excise tax according to the regulations. The amount of refund and the refund procedures shall be carried out according to the guidance provided in the Customs Law, Export Tax Law, Import Tax Law, Tax Administration Law, and related implementing documents.

c) Foreign main contractors and foreign subcontractors importing machinery, equipment, and transportation vehicles through temporary importation and re-exportation for the implementation of loan-funded projects with favorable terms must fulfill their obligations regarding import tax, VAT, and excise tax (if applicable) according to the regulations; upon completion of the construction of the project, they must re-export the items to outside the country and be refunded the import tax and excise tax according to the regulations.

2. VAT, corporate income tax, and other types of taxes, fees, and charges for providing goods and services in Vietnam.

a) Main contractors providing goods and services to ODA loan-funded project sponsors and loan-funded projects with favorable terms must pay VAT, corporate income tax, and other types of taxes, fees, and charges according to the provisions of the tax, fee, and charge laws.

b) Subcontractors providing goods and services to main contractors of ODA loan-funded projects and loan-funded projects with favorable terms must pay VAT, corporate income tax, and other types of taxes according to the provisions of the tax, fee, and charge laws.

c) Foreign main contractors and foreign subcontractors shall pay VAT directly on the value added and corporate income tax at a percentage rate based on revenue if they receive direct payment from the Project Sponsor. In such cases, foreign main contractors and foreign subcontractors shall be responsible for transferring the taxes due to the ODA loan project sponsor, the ODA preferential loan project sponsor, or the foreign main contractor for submission on behalf of the foreign main contractor and foreign subcontractor according to the provisions of the Law on VAT, the Law on Corporate Income Tax, the Law on Tax Administration, and guiding documents.

d) The main contractor providing goods and services to the ODA loan project sponsor and the ODA preferential loan project sponsor shall not be entitled to reclaim the input VAT paid when purchasing goods and services to fulfill the contract signed with the ODA loan project sponsor and the ODA preferential loan project sponsor as stipulated in Article 8 of this Circular. The main contractor will be eligible for deduction and refund of input VAT applicable to businesses subject to VAT under the deduction method if they meet the conditions and procedures as prescribed in the Law on VAT, the Law on Tax Administration, and guiding documents.

e) Individuals working for the main contractor and subcontractor must pay personal income tax in accordance with the provisions of the law on personal income tax. In the case of foreign experts working for the project, individuals from other countries must be confirmed by the project management agency as foreign experts in accordance with Clause 2 of Article 7 of this Circular.

Article 11. Tax policy for individuals working on projects

1. Vietnamese individuals and foreign individuals working on ODA loan projects and ODA preferential loan projects and the Project Management Board of ODA loan projects and ODA preferential loan projects shall fulfill their personal income tax obligations in accordance with Clause 1 of Article 7 of this Circular.

2. Tax and fee incentives for foreign experts working on ODA loan projects (excluding preferential loans) shall be implemented in accordance with Clause 2 of Article 7 of this Circular.

Section 3

TAX POLICY AND TAX INCENTIVES FOR PROJECTS UTILIZING FUNDS FROM MULTIPLE SOURCES OF FINANCIAL ASSISTANCE

DỤNG NGUỒN VỐN TỪ NHIỀU HÌNH THỨC TÀI TRỢ KHÁC NHAU

Article 12. Tax policy for projects utilizing funds from multiple sources of financial assistance (ODA and preferential loans)

For projects utilizing funds from multiple sources of financial assistance, if the funds are provided under separate financing agreements or disbursed separately for specific activities of the project, the tax policies shall be applied separately for each type of fund as guided in this Circular.

In the absence of separate financing agreements or separate disbursements for specific activities of each source of funding, the tax policy for the project shall be implemented according to the least favorable tax policy among the sources of funding.

Article 13. Refund of VAT for non-reimbursable ODA aid projects with domestic funding components

In the case of non-reimbursable ODA aid projects where the capital structure includes 90% non-reimbursable ODA aid and 10% domestic counterpart funding from the state budget and people's contributions (this portion of funding is designated for part of the project's work but not for paying VAT), the project sponsor or main contractor may claim a refund of VAT paid on goods and services purchased from the non-reimbursable ODA aid component for the project's use in accordance with Clause 2 of Article 5 and Clause 2 of Article 6 of this Circular. VAT refunds are not available for goods and services purchased using domestic counterpart funding and people's contributions. The project sponsor or main contractor must account separately for the VAT on goods and services purchased from the non-reimbursable ODA aid component; if separate accounting is not possible, the project sponsor will not be eligible for VAT refunds, and the main contractor will be eligible for deduction and refund of input VAT in accordance with Clause 2 of Article 6 of this Circular.

Example 3:

Non-reimbursable ODA aid project A has a capital structure consisting of 90% non-reimbursable aid from the Belgian Government, 10% domestic counterpart funding and people's contributions designated for expenses such as inspection and supervision costs, electricity and water costs, salaries, allowances, initial infrastructure costs, etc., but not for paying VAT on goods and services purchased from the non-reimbursable ODA aid component. The project sponsor or main contractor is eligible for a refund of VAT paid on the value of goods and services purchased from the non-reimbursable ODA aid component in accordance with Clause 2 of Article 5 and Clause 2 of Article 6 of this Circular if the project sponsor or main contractor can account separately for the VAT on goods and services purchased from the non-reimbursable ODA aid component and does not claim VAT refunds for goods and services purchased using domestic counterpart funding and people's contributions for the project; if the project sponsor or main contractor cannot account separately for the VAT on goods and services purchased from the non-reimbursable ODA aid component, the project sponsor will not be eligible for VAT refunds, and the main contractor will be eligible for deduction and refund of input VAT in accordance with Clause 2 of Article 6 of this Circular.

Chapter III

IMPLEMENTATION

Article 14. Responsibilities of the Project Owner, Main Contractor, and Subcontractor for Tax Obligations during the Implementation of ODA Projects and Preferential Loan Capital

1. Goods, machinery, equipment, and transportation means imported or temporarily imported for export to implement ODA projects and preferential loan capital that have been exempted from import tax, special consumption tax, and value-added tax as stipulated in Articles 5, 6, and 10 of this Circular, if used for purposes other than those for which the tax exemptions were granted, sold on the Vietnamese market, or destroyed in Vietnam, must be approved by the competent state authority. The Project Owner, Main Contractor, and Subcontractor must pay the import tax and special consumption tax that were previously exempted, and simultaneously pay the value-added tax according to regulations.

The procedures for submitting import tax and special consumption tax payments and declaring and paying value-added tax shall be carried out in accordance with the Law on Import Tax, Export Tax, the Law on Tax Administration, and related guiding documents.

In cases where the ODA Project Owner is a state management agency, political organization, political-social organization, or non-business social-professional organization, when permitted to sell goods purchased to implement ODA projects and preferential loan capital or liquidate assets on the Vietnamese market, the Project Owner must use invoices in accordance with the regulations of the Ministry of Finance.

2. Provision of documents for tax management of ODA projects and preferential loan capital: Within fifteen working days from signing construction contracts, supply contracts, or service provision contracts with foreign main contractors, ODA program/project owners must send a copy of the contract (stamped and signed by the authorized representative of the program/project owner) to the local tax authority where the project management office is located and the tax authority where the ODA project construction site is situated (in cases where the construction site is in a different locality from the location of the project management office). If the contract is signed in a foreign language, a Vietnamese summary of the contract containing key information including scope of work, contract value (including detailed components constituting the contract value - if applicable), payment method, contract duration, obligations and responsibilities of the parties involved in the contract must also be sent. The ODA project owner is responsible under the law for the accuracy of the contents submitted to the tax authority.

3. Determination of ODA provision form and applicable tax policy: The basis for applying tax policies as guided in this Circular is the investment decision and approval of the ODA project by the program/project management agency and the guidance on the form of ODA provision in Decree No. 38/2013/NĐ-CP dated April 23, 2013 of the Government. In cases where the investment decision or approval of the ODA project does not clearly specify whether the ODA provision form is grant aid or preferential loan or mixed ODA, the ODA project owner or main contractor must supplement a document from the program/project management agency specifying the ODA provision form of the project. For projects approved by the Prime Minister (national-level important programs/projects; programs accompanied by policy frameworks and programs/projects in the field of national defense and security), there must be a document from the Ministry of Planning and Investment confirming the ODA provision form of the project.

4. Fulfillment of tax, fee, and charge obligations in accordance with current laws on taxes, fees, and charges and the guidance provided in this Circular.

5. Informing the main contractors who sign contracts to provide goods and services to the ODA project owner and preferential loan capital about the tax policies and tax benefits that the contractors are required to comply with and enjoy.

6. Financial planning: The ODA project owner and preferential loan capital owner must calculate all taxes as stipulated in this Circular that will arise during the entire project implementation before submitting the project for approval by the program/project management agencies or tender results. The ODA project owner must determine the amount of import tax, special consumption tax, and value-added tax (except in cases where no payment is required or VAT refund is obtained) and other fees and charges payable, and develop a counterpart fund plan to ensure funds for the aforementioned taxes. For corporate income tax payable by contractors included in the contract value and personal income tax included in salary costs, no counterpart fund plan needs to be established.

Financial planning shall be carried out in accordance with the guidelines issued by the Ministry of Finance.

Report to the financial management agency overseeing the program/project the amount of value-added tax refunded in accordance with the guidelines on financial management mechanisms for ODA programs/projects issued by the Ministry of Finance.

Article 15. Responsibilities of Tax Authorities

1. Guide Official Development Assistance (ODA) Project Owners, preferential loan capital providers, sponsors, main contractors, and sub-contractors to register for tax, declare taxes, pay taxes, or receive tax refunds (if applicable) in accordance with prescribed regulations, notify bank accounts, budgetary ledgers for various types of taxes.

2. Examine tax declarations, check accounting books, accounting vouchers, and other necessary documents for calculating taxes.

3. Require ODA Project Owners, preferential loan capital providers, main contractors, and sub-contractors to provide accounting books, invoices, vouchers, and other relevant financial documents related to tax calculation, payment, and refund.

4. Determine the amount of tax due in cases where ODA Project Owners, preferential loan capital providers, main contractors, and sub-contractors fail to declare taxes within the prescribed time limit, declare incompletely or inaccurately, or fail to provide complete and accurate information related to tax calculation.

5. Inspect and audit the situation of tax payment, settlement, and refund of ODA Project Owners, preferential loan capital providers, main contractors, and sub-contractors in accordance with current laws.

6. Prepare minutes and handle tax violations within the authority prescribed by law.

7. Be responsible for enforcing tax laws, ensuring honesty, accuracy, and objectivity.

8. Confirm tax payments made by ODA Project Owners, preferential loan capital providers, main contractors, and sub-contractors and be responsible for the accuracy of the confirmed tax amounts.

Article 16. Effective Date

This Circular takes effect from January 17, 2014, replacing Circular No. 123/2007/TT-BTC dated October 23, 2007, issued by the Ministry of Finance guiding the implementation of tax policies and tax incentives for programs and projects using official development assistance (ODA) funds.

For ODA projects approved by competent authorities before this Circular takes effect, the determination of tax obligations and tax incentives shall be carried out according to the guidance provided in Circular No. 123/2007/TT-BTC dated October 23, 2007, issued by the Ministry of Finance on implementing tax policies and tax incentives for programs and projects using official development assistance (ODA) funds until the completion of the project.

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