Circular No. 205/2009/TT-BTC guides the procedures for refunding value-added tax (VAT) on specialized equipment, machinery, transportation vehicles, construction materials, raw materials, supplies, semi-finished products included in production lines that domestic production cannot yet produce, imported to form fixed assets of enterprises.

CIRCULAR

Guidelines for Value Added Tax (VAT) refund procedures for equipment, machinery, specialized transportation vehicles

transportationconstruction materials, raw materials, supplies, semi-finished products

included inproduction lines that domestic manufacturers have not yet been able to produceHereinafter referred to as Primer

is requiredfor importation to form fixed assets of enterprises

_________________________

Pursuant to the Law on Value Added Tax (VAT) No. 13/2008/QH12 dated June 3, 2008;

Pursuant to the Law on Tax Administration No. 78/2006/QH11 dated November 29, 2006;

Pursuant to Decree No. 123/2008/NĐ-CP dated December 8, 2008 of the Government detailing and guiding the implementation of certain provisions of the VAT Law;

Pursuant to Decree No. 85/2007/NĐ-CP dated May 25, 2007 of the Government detailing the implementation of certain provisions of the Law on Tax Administration;

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

The Ministry of Finance guides the procedures for VAT refunds for equipment, machinery, specialized transportation vehicles, construction materials, raw materials, supplies, semi-finished products included in production lines that domestic manufacturers have not yet been able to produce for importation to form fixed assets of enterprises as follows:

Article 1. Scope of Application

1. Business establishments newly established from registered investment projects that are still in the investment phase and have not commenced operations, or business establishments currently operating with new production facilities established in a different province or centrally administered city from where the main office is located, which are still in the investment phase and have not commenced operations, registered for business, or registered for tax purposes; if they import equipment, machinery, specialized transportation vehicles, construction materials, raw materials, supplies, semi-finished products included in production lines that domestic manufacturers have not yet been able to produce to form fixed assets, they may choose to apply the procedures for VAT refund as stipulated in this Circular if they meet the following conditions:

- The business establishment registers to pay taxes under the deduction method, has been issued a business registration certificate or an investment permit (practice license), has a seal in accordance with the law, maintains accounting books and records in accordance with the law on accounting, and has a bank account according to the taxpayer's identification number;

- There is a VAT payable at the import stage for equipment, machinery, specialized transportation vehicles, construction materials, raw materials, supplies, semi-finished products included in production lines that domestic manufacturers have not yet been able to produce to form fixed assets, amounting to VND 200 million or more.

- The investment project falls within the category of national key projects subject to the approval of the National Assembly on investment policy or investment projects classified as Group A as defined in Article 2 of Decree No. 12/2009/NĐ-CP dated February 12, 2009 of the Government on project management for construction works.

- The investment project produces goods or services subject to VAT, or an investment project that simultaneously produces goods or services subject to VAT and goods or services not subject to VAT.

2. Types of imported goods that domestic manufacturers have not yet been able to produce and require importation as specified in Clause 1 of this Article shall be determined based on the List of Equipment, Machinery, Spare Parts, Specialized Transportation Vehicles Domestic Manufacturers Have Already Produced, the List of Construction Materials Domestic Manufacturers Have Already Produced, and the List of Raw Materials, Supplies, Semi-Finished Products Domestic Manufacturers Have Already Produced issued by the Ministry of Planning and Investment. In cases where production and business establishments import complete production lines containing both types of equipment, machinery, specialized transportation vehicles, construction materials, raw materials, supplies, semi-finished products that domestic manufacturers have not yet been able to produce and those that have already been produced domestically, the business establishment may choose to apply the procedures for VAT refund as stipulated in this Circular for the entire set of equipment, machinery, specialized transportation vehicles, construction materials, raw materials, supplies, semi-finished products forming the complete production line.

3. Types of imported goods that domestic manufacturers have not yet been able to produce and require importation as specified in Clause 1 and Clause 2 of this Article do not include: specialized fixed assets serving the production of weapons, military equipment serving national defense and security; fixed assets such as office buildings and specialized equipment serving credit activities of financial organizations, reinsurance companies, life insurance companies, securities trading companies, hospitals, schools; civil aircraft, yachts not used for commercial cargo and passenger transport, tourism, and hotel operations.

Article 2. Procedures and sequence for refunding VAT

1. Documents for VAT refund:

a) A request for VAT refund according to Form No. 01/HTBT issued together with Circular 60/2007/TT-BTC dated June 14, 2007 of the Ministry of Finance guiding the implementation of certain provisions of the Law on Tax Administration and guiding the implementation of Decree No. 85/2007/NĐ-CP, stating the reason for the refund is for the VAT on imported goods of equipment, machinery, specialized transportation means, materials included in production lines that cannot be produced domestically and need to be imported to form fixed assets, without having the tax payment certificate at the import stage in the file.

b) A summary declaration form for the total VAT on imported goods generated from customs declarations stamped with confirmation by the customs authority according to Form No. 01-1/HTBT issued together with Circular 60/2007/TT-BTC, including:

- The "Input tax amount eligible for deduction" and "Input tax exceeding output tax requested for refund" fields record the generated VAT;

- The "Output tax generated" field is not filled in and crossed out;

- The "Amount paid" field records "debt for tax payment certificate at the import stage".

c) A list of customs declarations stamped with confirmation by the customs authority according to Form No. 01-2/GTGT issued together with Circular No. 60/2007/TT-BTC, indicating that it is attached with the request for VAT refund according to Form No. 01/HTBT and:

- The "Invoice number" field is replaced by "Customs declaration number";

- The "Invoice number" field is replaced by "Customs declaration number";

- The "Date of issue" field is replaced by "Date of customs declaration registration";

- The note column clearly states "debt for tax payment certificate at the import stage".

Businesses are responsible under the law for the legality, validity, and accuracy of the documents, invoices, and other related materials submitted with the request for VAT refund to the tax authority.

2. Sequence for VAT refund:

- Businesses prepare and submit the VAT refund documents to the tax authority, without the tax payment certificate at the import stage.

- The tax authority is responsible for receiving, examining, and checking the business's VAT refund application according to the VAT refund procedure. Within a maximum period of fifteen days from the date of receipt of all documents, the tax authority will notify the business of the result of the examination determining whether the refund application meets the conditions and request the business to submit the tax payment certificate at the import stage so that the tax authority can issue a decision to refund the tax. The fifteen-day period for examining the refund application applies to applications requiring pre-refund inspection and post-refund inspection, and applications requiring pre-refund inspection and immediate refund.

- Within three working days from the date of receipt of the tax payment certificate for imported goods, the tax authority is responsible for verifying and cross-checking the tax payment certificate with the declared figures in the approved refund application of the business and issuing a refund decision. If the VAT recorded on the tax payment certificate is lower than the initial requested refund amount, the refund amount will be the amount recorded on the tax payment certificate; if the VAT recorded on the tax payment certificate is higher than the initial requested refund amount, the refund amount will be the initial requested refund amount.

Article 3. Effectiveness

This circular takes effect forty-five days from the date of signature. For other cases of VAT refunds not covered by this circular, they shall be implemented according to current laws and regulations.

During the implementation process, if any difficulties arise, please report them to the Ministry of Finance for study and resolution./.