Decision No. 197/2003/QD-TTg On piloting the implementation of a mechanism for production and business establishments to self-declare and self-pay taxes

DECISION

Regarding the pilot implementation of a mechanism

for production and business establishments to self-declare and self-pay taxes 

PRIME MINISTER

Pursuant to the Law on Organization of the Government dated December 25, 2001;

"1. The tax rate of 0% shall apply to: export goods and services, including exported processed goods, goods and services exempt from value added tax when exported.

Pursuant to the Law on Corporate Income Tax (amended) No. 09/2003/QH11 dated June 17, 2003;

At the proposal of the Minister of Finance,

DECISION:

Article 1. Pilot implementation of a mechanism for production and business establishments to self-declare and self-pay taxes with the following contents:

1. The objective of the pilot implementation is to enhance the awareness of voluntarily complying with tax laws and taking responsibility before the law regarding tax obligations of production and business establishments; to implement administrative reform in the field of taxation; to strengthen inspection, supervision, prevent, and promptly handle violations of tax laws; to create conditions for organizing and arranging the tax management apparatus to operate deeply, tightly, and effectively; and gradually modernize tax management work.

2. The subjects piloting the self-declaration and self-payment mechanism are production and business establishments that declare and pay value-added tax under the tax deduction method, and comply with accounting records, invoices, and vouchers as prescribed.

3. The scope of piloting the self-declaration and self-payment mechanism includes value-added tax (excluding value-added tax declared and paid at the import stage) and corporate income tax.

4. Time and location for piloting the self-declaration and self-payment mechanism:

a) From January 1, 2004, pilot implementation will be applied to some selected production and business establishments located in Ho Chi Minh City and Quang Ninh Province.

b) In 2005, review and expand the pilot application to production and business establishments outside those mentioned in point a of this clause; simultaneously, expand the pilot application to other localities.

c) In 2007, conclude and evaluate the pilot implementation of the self-declaration and self-payment mechanism; perfect mechanisms and policies to prepare for formal implementation.

Article 2. Production and business establishments piloting the self-declaration and self-payment mechanism shall declare, pay, and settle taxes as follows:

1. For value-added tax:

a) Monthly, production and business establishments shall self-declare value-added tax according to the declaration form issued by the Ministry of Finance, and pay the full amount of tax declared into the state budget. The deadline for submitting the declaration form and paying value-added tax is no later than the 25th day of the following month.

b) Annually, production and business establishments are not required to settle value-added tax with the tax authority.

2. For corporate income tax:

a) Production and business establishments shall determine the provisional corporate income tax payable quarterly according to the form prescribed by the Ministry of Finance and pay the tax into the state budget no later than the 25th day of the first month of the following quarter.

Quarterly provisional corporate income tax is determined based on the revenue declared in the quarter, the ratio of taxable income to revenue in the previous year, and the corporate income tax rate. In cases where there is a significant change in production and business operations during the year leading to a change in the ratio of taxable income to revenue compared to the previous year, the production and business establishment may adjust the provisional taxable income ratio and pay tax according to the adjusted ratio, but must submit a written explanation detailing the reasons to the tax authority. If the tax authority discovers that the adjustment of the provisional taxable income ratio lacks basis upon inspection, it has the right to determine the provisional tax payable for each quarter.

b) At the end of the calendar year or fiscal year, production and business establishments shall self-declare and settle corporate income tax according to the declaration form issued by the Ministry of Finance no later than 90 days from the end of the calendar year or fiscal year; simultaneously, they shall fully pay any outstanding tax into the state budget, and if overpaid, the excess can be deducted from the tax due in the next payment period.

3. Production and business establishments shall bear legal responsibility for the truthfulness and accuracy of their declarations and tax calculations as stipulated in Clauses 1 and 2 of this Article. In cases of merger, consolidation, division, dissolution, or bankruptcy, production and business establishments must settle value-added tax and corporate income tax with the tax authority according to current tax laws.

Article 3. The tax authority managing production and business establishments piloting the self-declaration and self-payment mechanism shall have the duty to organize specialized staff to perform:

1. Promote and support production and business establishments to understand and correctly implement tax laws and the self-declaration and self-payment mechanism as prescribed in this Decision.

2. Monitor the declaration and payment of taxes by production and business establishments; notify, remind, or handle according to the law in cases of late declaration and payment of taxes.

3. Inspect, supervise, and promptly handle within its authority any violations of tax laws.

4. Apply measures to collect overdue taxes and enforce tax collection according to the law in cases of non-payment or late payment of taxes and penalties.

5. Promote the application of information technology in tax collection management.

Article 4. Responsibilities of the Ministry of Public Security

1. Issue guiding documents for the implementation of this Decision; propose measures to prevent and limit the abuse of the self-declaration and self-payment mechanism to evade or misappropriate taxes payable to the state budget. Address difficulties and issues arising during the implementation process.

2. Coordinate with relevant ministries and localities to decide on the selection and expansion of the pilot application of the self-declaration and self-payment mechanism as specified in points a and b of Clause 4, Article 1 of this Decision. Direct and inspect tax authorities to organize the implementation of the contents stipulated in Article 3 of this Decision.

3. Submit to the Prime Minister for decision on expanding the subjects and scope of the pilot application of the self-declaration and self-payment mechanism beyond the content specified in Clauses 2 and 3 of Article 1 of this Decision; propose the issuance of mechanisms and policies to prepare for the formal implementation of the self-declaration and self-payment mechanism nationwide.

Article 5. Authorities, organizations, individuals, and other production and business establishments shall be responsible for providing information related to pilot production and business establishments implementing the self-reporting, self-payment tax mechanism upon request from the tax authority; cooperate with the tax authority to resolve difficulties, handle cases of violation of tax laws, and provisions set forth in this Decision.

Article 6. This Decision shall take effect from January 1, 2004 onwards.

Ministers, heads of ministerial-level agencies, heads of government agencies, and Chairpersons of Provincial People's Committees and Municipal People's Committees directly under the Central Government shall be responsible for enforcing this Decision.