Circular No. 34/1999/TT-BTC guides the implementation of the Value Added Tax Law for export processing enterprises.

CIRCULAR

Guidelines for Implementing the Value Added Tax Law for Export Processing Enterprises

Pursuant to the Value Added Tax Law No. 02/QH dated May 10, 1997; Government Decree No. 28/1998/NĐ-CP dated May 11, 1998 detailing the implementation of the Value Added Tax Law; Government Decree No. 102/1998/NĐ-CP dated December 21, 1998 amending and supplementing certain provisions of Government Decree No. 28/1998/NĐ-CP dated May 11, 1998 detailing the implementation of the Value Added Tax Law;

Pursuant to Government Decree No. 36/CP dated April 24, 1997 on the issuance of regulations for industrial zones, export processing zones, and high-tech parks;

The Ministry of Finance provides specific guidelines for implementing the Value Added Tax Law for export processing enterprises as follows:

This technical regulation sets out technical requirements, testing methods, sampling procedures; management requirements; responsibilities of organizations and individuals producing, trading, and importing cigarettes.

1. Scope of Application of this Circular:

- Export processing enterprises established in accordance with the regulations for industrial zones, export processing zones, and high-tech parks issued together with Government Decree No. 36/CP dated April 24, 1997.

- Organizations and individuals within the domestic market of Vietnam that have exchange and trade relations with export processing enterprises.

2. Objects Subject to Value Added Tax:

The objects subject to VAT within the scope of application of this Circular include:

- Goods provided by organizations and individuals within the domestic market to export processing enterprises (including goods for processing for export processing enterprises), except for those specified in Point 3, Section I of this Circular.

- Goods and services provided by export processing enterprises to organizations and individuals within the domestic market.

3. Objects Not Subject to Value Added Tax:

- Goods imported from abroad into export processing enterprises.

- Services provided by foreign organizations and individuals to export processing enterprises.

- Goods of export processing enterprises exported to abroad.

- Goods and services exchanged between export processing enterprises.

- Services provided by organizations and individuals within the domestic market to export processing enterprises.

- Other goods and services prescribed in Article 4, Chapter I, Value Added Tax Law and guiding documents.

4. Taxpayers Subject to Value Added Tax:

Organizations and individuals within the domestic market that have exchange and trade relations involving VAT taxable goods and services with export processing enterprises are taxpayers subject to VAT under the guidance of this Circular.

II. SPECIFIC PROVISIONS ON VALUE ADDED TAX

1. For Export Processing Enterprises:

Based on the provisions of the Value Added Tax Law and the characteristics and objectives of export processing enterprises, export processing enterprises are not taxpayers subject to VAT.

When exporting goods to abroad or importing goods from abroad into export processing zones or export processing enterprises, export processing enterprises must handle customs procedures at the competent customs office in the industrial park or at the export processing enterprise according to the provisions of the Law on Export Duties, Import Duties, and Vietnamese Customs Law.

Goods and services exchanged between export processing enterprises are not subject to VAT. Export processing enterprises use general sales invoices or special invoices approved by the Ministry of Finance in accordance with general regulations.

2. For Organizations and Individuals Within the Domestic Market:

Organizations and individuals within the domestic market that have purchase and sale, exchange relations involving VAT taxable goods and services with export processing enterprises are taxpayers subject to VAT. Registration, declaration, and payment of tax shall be carried out in accordance with the provisions of the Value Added Tax Law and guiding documents.

Certain goods subject to VAT are specifically defined as follows:

- Goods from the domestic market exported to export processing enterprises, except for those specified in Point 3, Section I of this Circular, are considered exported goods subject to VAT at a zero percent rate. The exporter must have complete export documentation and evidence proving that the goods were actually exported in accordance with Point 1, Section II, Part B, Circular No. 89/1998/TT-BTC dated June 27, 1998 of the Ministry of Finance.

In particular, for products with specific characteristics such as electricity and water, there must be complete sales invoices and valid purchase contracts. For goods not required to go through customs procedures as stipulated, such as foodstuffs, office supplies, etc., there must be complete sales invoices, purchase contracts, and retail lists in the form of Model 05/GTGT issued together with Circular No. 89/1998/TT-BTC.

- Goods provided by export processing enterprises to the domestic market are considered imported goods subject to VAT. The importer must declare and pay VAT on imported goods in accordance with Circular No. 89/1998/TT-BTC.

III. IMPLEMENTATION

1. This Circular takes effect fifteen days from the date of signature. Matters not covered by this Circular shall be implemented in accordance with Circular No. 89/1998/TT-BTC dated June 27, 1998; Circular No. 175/1998/TT-BTC dated December 24, 1998; and Circular No. 20/1999/BTC dated February 10, 1999 of the Ministry of Finance.

2. The General Department of Taxation and the General Department of Customs are responsible for organizing the implementation of this Circular.

During the implementation process, if there are difficulties or obstacles, organizations and individuals are requested to promptly report them to the Ministry of Finance for research and resolution.