Circular No. 20/2017/TT-BTC amends and supplements Clause 2, Article 8 of Circular No. 195/2015/TT-BTC dated November 24, 2015 of the Ministry of Finance (which has been amended and supplemented according to Circular No. 130/2016 of the Ministry of Finance).

CIRCULAR

Amending and supplementing Clause 2, Article 8 of Circular No. 195/2015/TT-BTC dated November 24, 2015 of the Ministry of Finance (which has been amended and supplemented according to Circular No. 130/2016/TT-BTC dated August 12, 2016 of the Ministry of Finance)

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Pursuant to the Special Consumption Tax Law No. 27/2008/QH12 dated November 14, 2008; Law No. 70/2014/QH13 dated November 26, 2014 amending and supplementing certain articles of the Special Consumption Tax Law;

Pursuant to the Tax Administration Law No. 78/2006/QH11 dated November 29, 2006 and Law No. 21/2012/QH13 dated November 20, 2012 amending and supplementing certain articles of the Tax Administration Law;

Pursuant to Law No. 106/2016/QH13 dated April 6, 2016 amending and supplementing certain articles of the Value Added Tax Law, the Special Consumption Tax Law, and the Tax Administration Law;

Pursuant to Decree No. 108/2015/NĐ-CP dated October 28, 2015 of the Government detailing and guiding the implementation of certain articles of the Special Consumption Tax Law and the Law amending and supplementing certain articles of the Special Consumption Tax Law;

Pursuant to Decree No. 100/2016/NĐ-CP dated July 1, 2016 of the Government detailing and guiding the implementation of certain articles of the Law amending and supplementing certain articles of the Value Added Tax Law, the Special Consumption Tax Law, and the Tax Administration Law;

Pursuant to Decree No. 215/2013/NĐ-CP dated December 23, 2013, promulgated by the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

At the proposal of the Director General of the State Revenue Administration,

The Minister of Finance promulgates this Circular amending and supplementing certain provisions of Circulars guiding special consumption tax as follows:

Article 1.

Amending and supplementing Clause 2, Article 8 of Circular No. 195/2015/TT-BTC dated November 24, 2015 of the Ministry of Finance guiding the implementation of Decree No. 108/2015/NĐ-CP dated October 28, 2015 of the Government detailing and guiding the implementation of certain articles of the Special Consumption Tax Law and the Law amending and supplementing certain articles of the Special Consumption Tax Law (which has been amended and supplemented according to Circular No. 130/2016/TT-BTC dated August 12, 2016 of the Ministry of Finance) as follows:

“2. The taxpayer subject to special consumption tax on imported goods subject to special consumption tax shall deduct the amount of special consumption tax paid at the import stage when determining the amount of special consumption tax payable for sales within the country. The deductible amount of special consumption tax corresponds to the special consumption tax of imported goods subject to special consumption tax sold and can only be deducted up to the corresponding amount of special consumption tax calculated at the sales stage within the country. For the amount of special consumption tax that cannot be deducted, the taxpayer may include it in costs for calculating corporate income tax.

The conditions for deducting special consumption tax are stipulated as follows:

- In the case of importing raw materials subject to special consumption tax for production of goods subject to special consumption tax and in the case of importing goods subject to special consumption tax, the documents serving as the basis for deducting special consumption tax are the payment receipts for special consumption tax at the import stage.

- In the case of purchasing raw materials directly from domestic manufacturers:

+ Purchase contract, which must contain the content showing that the goods are produced directly by the selling entity; Copy of the Business Registration Certificate of the selling entity (signed and stamped by the selling entity).

+ Bank payment receipt.

+ The document serving as the basis for deducting special consumption tax is the VAT invoice when purchasing goods. The amount of special consumption tax paid by the purchasing entity when buying raw materials is determined by multiplying the taxable value of the raw materials by the special consumption tax rate; wherein:

The deduction of special consumption tax shall be carried out during the declaration of special consumption tax, the amount of special consumption tax payable is determined according to the following formula:

In cases where the exact amount of special consumption tax paid (or paid) for the corresponding raw materials consumed during the period cannot be determined, the amount of deductible special consumption tax may be based on the data from the previous period and will be adjusted according to the actual figures at the end of the quarter or year. In all cases, the maximum amount of special consumption tax allowed to be deducted shall not exceed the amount of special consumption tax calculated for the raw materials according to the economic and technical standards of the product. The production facility must register the economic and technical standards of the product with the direct tax authority managing the facility.

Example 12: During the tax declaration period, Facility A incurred the following transactions:

+ Imported 10,000 liters of wine, paid 250 million VND in special consumption tax at the import stage (based on the tax payment receipt at the import stage).

+ Withdrawn 8,000 liters for production of 12,000 bottles of wine.

+ Sold 9,000 bottles of wine, generating 350 million VND in special consumption tax at the time of sale.

+ The amount of special consumption tax paid at the import stage allocated to the 9,000 bottles of wine sold is 150 million VND.

The amount of special consumption tax Facility A must pay during the period is:

350 million VND - 150 million VND = 200 million VND.

Example 13: During the tax declaration period, Facility B incurred the following transactions:

+ Imported 100 air conditioners model A with a capacity of 12,000 BTU, paid 100 million VND in special consumption tax at the import stage (based on the tax payment receipt at the import stage).

+ Sold 100 air conditioners, generating 120 million VND in special consumption tax at the time of sale within the country.

The amount of special consumption tax Facility B must pay during the period is:

120 million VND - 100 million VND = 20 million VND.

Example 14: During the tax declaration period, Facility B incurred the following transactions:

+ Imported 100 air conditioners model X with a capacity of 12,000 BTU, paid 100 million VND in special consumption tax at the import stage (based on the tax payment receipt at the import stage).

+ Sold 100 air conditioners, generating 90 million VND in special consumption tax at the time of sale.

Facility B is entitled to deduct 90 million VND in special consumption tax. For the undeducted amount of special consumption tax (10 million VND), Facility B may include it in costs for calculating corporate income tax.

For enterprises permitted to produce E5, E10 gasoline, the declaration and deduction of special consumption tax shall be carried out at the local tax office where the enterprise's headquarters is located. Any un-deducted special consumption tax on E5, E10 gasoline in the period can be offset against the special consumption tax payable for other goods and services.

The taxpayer shall submit the Value-Added Tax Declaration Form No. 01/TTĐB and the Table to Determine the Withheld Value-Added Tax on Purchased Raw Materials and Imported Goods (Form No. 01-1/TTĐB), if applicable, issued together with this Circular.

Article 2.

This Circular takes effect from April 20, 2017.

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./.