Circular No. 40 TC/TCT supplements and amends certain points in Circular No. 73A TC/TCT dated August 30, 1993 of the Ministry of Finance on business income tax.

MINISTRY OF FINANCE ********	SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness ********
Number: 40-TC/TCT	Hanoi, May 25, 1995

 

CIRCULAR

DECISION NO. 40 TC/TCT OF MAY 25, 1995 ISSUED BY THE MINISTRY OF FINANCE ON GUIDELINES FOR SUPPLEMENTING AND AMENDING CERTAIN POINTS IN CIRCULAR NO. 73A TC/TCT OF AUGUST 30, 1993 OF THE MINISTRY OF FINANCE ON DIRECTIVES REGARDING BUSINESS INCOME TAX 

To implement the Business Income Tax Law accurately and promptly address issues arising during its implementation;

Pursuant to the Business Income Tax Law, the Law Amending and Supplementing Certain Provisions of the Business Income Tax Law, and Decree No. 55/CP dated August 28, 1993 of the Government detailing the implementation of the Business Income Tax Law, the Ministry of Finance supplements and amends certain points in Circular No. 73A TC/TCT dated August 30, 1993 of the Ministry of Finance guiding the implementation of Decree No. 55/CP of the Government on business income tax as follows:

I. ON THE SCOPE OF APPLICATION OF BUSINESS INCOME TAX

1. Additional specific guidance on cases of production and processing of export goods that are not subject to business income tax as follows:

a. Goods produced and directly processed for foreign entities according to contracts signed with foreign parties, including cases where goods are taken out of the production facility to participate in overseas exhibitions and sold abroad.

b. Goods produced and sold to duty-free shops if such goods fall under items exempted from taxes according to government regulations.

c. Goods produced and sold for processing to entities within export processing zones (excluding items for consumption and daily use such as foodstuffs, etc., as stipulated in Decree No. 322/HĐBT dated October 18, 1991 of the Council of Ministers (now the Government) on activities in export processing zones).

d. Goods directly produced and processed for export but not directly contracted with foreign entities, instead selling export goods through contracts or entrusting export through trading companies.

Example One: If a State Trading Corporation directly signs a contract to purchase clothing products from a production facility for export, the production facility does not have to pay business income tax on the sale of these products to the State Trading Corporation. The State Trading Corporation must pay business income tax at the export sales rate when exporting the purchased products.

Example Two: If a State Trading Corporation signs a contract to process clothing for foreign entities and then assigns other enterprises to process it, these processing enterprises are not required to pay business income tax on the processed export goods. The State Trading Corporation must pay business income tax at a rate of 12% on commission fees or the portion of revenue it enjoys.

In the case where entity A is determined to be directly processing export goods, but A signs a contract to subcontract all or part of the finished products to entity B under the form of providing raw materials and receiving processed goods from B, entity A must pay business income tax on the goods subcontracted to entity B at a rate of 12% based on the difference between the processing price received and the price subcontracted to entity B.

Cases of production and processing of export goods that are not subject to business income tax must meet the following conditions:

- For cases mentioned in points a, b, and c, there must be:

+ Production, processing, or sales contracts signed by the entity with foreign entities or entities considered as exports.

+ Sales invoices and export processing invoices consistent with the economic contracts mentioned above.

+ Export declaration forms already settled and confirmed by Customs.

- For the case mentioned in point d, there must be:

+ Economic contracts between the production or processing entity and the trading corporation or representative entity signing contracts with foreign entities; the content of the contract must clearly specify the quantity and type of goods produced or processed for export consistent with the license of the trading corporation and the contract of this corporation with foreign entities.

+ Sales invoices and export processing invoices consistent with the economic contracts mentioned above.

+ Settlement statements of export sales contracts or export processing contracts serving as the basis for tax settlement.

Apart from the cases of direct production and processing of export goods that are not subject to business income tax as specified in point 1 above, all other cases must pay business income tax, including the following specific cases:

- Production of raw materials, packaging, labels, components, spare parts, semi-finished products, etc., sold to production or processing entities engaged in export trade for the purpose of producing and packaging export goods.

- Undertaking subcontracts for some stages of production of export goods by entities engaged in production or processing of export goods that are not subject to business income tax.

- Trading corporations engaged in import and export purchasing export goods, if they engage in preliminary processing, sorting, and packaging of purchased goods for export, these activities of the trading corporation cannot be considered as production or processing of export goods. The trading corporation must pay business income tax according to its import and export trading activities.

2. Additional specific guidance on certain cases temporarily not subject to business income tax as follows:

a/ Printing and publishing activities temporarily not subject to business income tax as stipulated in Article 13 of Decree No. 55/CP dated August 28, 1993 of the Government and the tax rate of 0% (at Point 22 - Part I - Business Income Tax Table) only applies to printing and publishing activities. Sales and distribution activities of these products must pay business income tax according to commercial trading activities.

b/ Activities such as "repair, maintenance, and preservation of roads, railways, waterways, bridges, dykes, dams, etc., funded by state budget or contributions from the public" are temporarily not subject to business income tax.

Specific determination must be based on the following conditions:

- These are repair, maintenance, and preservation activities of facilities listed in the prescribed catalog, approved by competent authorities.

- Funded by state budget or contributions from the public...

The agency managing state budget funds when establishing unit prices for budget estimates shall not include the construction tax revenue structure for projects that are exempt from construction tax revenue according to this provision.

Units performing work exempt from construction tax revenue under this provision, if they have income from other activities, must pay construction tax revenue on such income.

Example: An entity engaged in canal dredging is determined to be an activity exempt from construction tax revenue, but only the income from dredging activities is exempt from construction tax revenue. If there is income from selling land or dredged sand, the entity must pay construction tax revenue on the sale of land and sand at the applicable rate for the exploitation activity based on the income from the sale of land and sand.

c. Construction tax revenue shall not be collected on the sale of fixed assets such as machinery, equipment, transportation vehicles, and factory buildings that have been purchased or constructed over one year ago and in accordance with the prescribed investment procedures, and are accounted for and tracked according to the current accounting regulations for fixed assets.

II- CONSTRUCTION TAX REVENUE SUBJECT TO TAXATION

Construction tax revenue for certain activities is determined as follows:

1. For construction activities:

a. Construction tax revenue applies to construction activities that include both general contracting and material supply contracting.

The concept of material supply contracting in construction refers to materials that constitute part of the construction product, supplied by the contractor for the construction project (excluding the value of complete machinery and equipment if any). Materials and supplies used for construction machinery and equipment are not considered material supply contracting.

Determining whether construction includes material supply contracting or not must be based on the construction contract and the actual final settlement of the contract.

Construction activities that include major material supply contracting where the total value of supplied materials exceeds 50% of the total value of construction materials for the project are considered construction with material supply contracting and apply a 3% tax rate. If the value of supplied materials is less than 50% of the total value of construction materials for the project, the following tax rates apply:

+ The construction revenue (excluding the value of materials) applies a 5% tax rate on the value of materials provided by the contractor to the project owner for material supply contracting activities; if it is not possible to determine detailed revenue as mentioned above, then a 5% tax rate is applied to the total construction revenue.

b. Construction tax revenue for cases involving multiple entities participating in constructing a single project:

To avoid duplicate collection of construction tax revenue for a single construction project, in principle, tax should be calculated and collected once on the total construction revenue, with the entity generating the revenue responsible for declaring and paying the tax.

In cases where multiple organizations or individuals participate in constructing a project through one or more main contractors signing contracts with the project owner (referred to as the main contractor), who then subcontract to other contractors (referred to as sub-contractors), the main contractors must declare and pay construction tax revenue to the local tax authority where the project is located. The taxable revenue is the total value of the project or project component contracted by the main contractor (including the portion of the project value subcontracted to sub-contractors); sub-contractors do not need to pay construction tax revenue on projects for which the main contractor has already paid tax.

In cases where the main contractors undertake construction projects with components located in different regions (provinces, cities), the main contractors or direct sub-contractors must declare and pay construction tax revenue to the local tax bureaus where the construction work is carried out. Taxable revenue is determined based on the value of the project component or work performed in each region; when settling construction tax revenue for the project, the main contractor can deduct taxes paid in different regions for project components or work, and must present relevant documents and confirmation from the local tax authorities to the tax management unit.

To establish the basis for determining revenue and tax payable for contractors and entities participating in construction as stipulated above, contractors must provide the tax authority with all contracts for construction and subcontracting, payment and settlement documents for construction contracts, and tax payment documents (if any).

In cases where intermediaries in construction earn commissions and subsequently subcontract the entire project to another contractor, only earning income from the transfer of the contract, a 15% tax rate (Point 15.e - Section VI - Business Revenue Tax Table) shall be applied.

c. For basic construction activities conducted by units themselves:

+ Not required to pay construction tax revenue in the following cases:

- Activities of planting and caring for long-term trees during the period of basic construction transitioning to business operations.

- Construction of factory buildings, offices, and internal roads within the unit using self-funded capital without generating revenue.

+ Required to pay construction tax revenue in the following cases:

- When a unit is a member of a joint venture undertaking construction projects funded by the joint venture.

Example: Unit B is a member of Joint Venture A and undertakes the construction of a project for Joint Venture A; Unit B must pay construction tax revenue on the project undertaken for Joint Venture A.

- Subordinate units undertaking construction for other units within a Company or Corporation or higher-level units according to economic contracts.

- Construction of projects listed in the State plan; investment capital belongs to State investment (directly allocated by the State budget or allocated through other forms).

The taxable revenue in these cases is the value of the construction project handed over to the user of the project.

2. For transportation activities:

Transport units implement a mechanism linking revenue allocation with the assignment of vehicles to drivers, taxable revenue and tax payers being determined for each specific case as follows:

- In cases where transport vehicles belong to enterprises but the enterprise allocates part of the costs (fuel, oil, grease, regular maintenance, wages...) or a lump sum required to be paid to the unit to meet general management requirements, cost control, etc., then the transport unit is the entity required to declare and pay turnover tax on transport activities; taxable revenue is the total revenue without any deductions for costs.

Turnover tax revenue is calculated

as the allocated payment amount plus the allocated expense amount

The allocated expense amount is determined according to the quota allocated to the recipient of the vehicle, suitable for each type of transport vehicle and each method of allocation.

- In cases where transport vehicles belong to individual owners or private households, the vehicle owner is the entity directly required to declare and pay turnover tax on revenue and other types of taxes (if applicable).

For marine transport units that have registered for business and pay taxes in Vietnam, with revenue from transport activities between foreign ports and from foreign ports to Vietnam (excluding transport from Vietnam through foreign ports), if they have sufficient grounds such as transportation contracts and payment documents proving that the revenue generated from these transport activities occurs outside Vietnam's territory, they are not required to pay turnover tax, but must still reflect this revenue in their total transport revenue to determine business results and profits.

3. Regarding commercial trade operations:

a. On the application of the method of paying turnover tax based on the difference between selling price and purchase price.

Commercial trade units that meet the conditions stipulated in Section A, Part II, Circular No. 73 TC/TCT may declare and pay turnover tax based on the difference between selling price and purchase price.

Within a unit engaged in commercial trade operations, for commercial trade activities, only one of two methods can be applied to calculate and pay turnover tax: based on revenue or based on the difference. "Unit" as defined for determining the method of tax declaration under this provision is an entity that has completed registration for direct declaration and settlement of turnover tax with the tax authority.

b. Purchase price and selling price used as the basis for calculating turnover tax based on the difference are determined according to the price recorded on invoices.

In cases of purchasing and selling multiple types of goods where prices fluctuate, to determine the difference between selling price and purchase price: the purchase price of goods sold is calculated based on the weighted average price of inventory from the previous period and purchases made during the tax declaration period.

c. For certain items specified by the State requiring additional levies, the tax calculation base is determined as follows:

- For levies paid into the price stabilization fund: If the unit applies the method of declaring and paying turnover tax based on revenue, the levy cannot be deducted from taxable revenue. If the unit is allowed to apply the method of declaring and paying turnover tax based on the difference between selling price and purchase price, the levy cannot be deducted when determining the taxable difference for turnover tax.

- For other levies such as electricity surcharges, telephone installation fees, etc., except for specific cases as prescribed by the Government which allow the entire levy amount to be used as investment capital and not included in taxable revenue and business results, all other cases must include the levy in revenue and declare and pay turnover tax according to the Law.

4. For production units that organize retail outlets:

Production units must declare and pay turnover tax at the production industry rate at the place of production and declare and pay turnover tax at the commercial industry rate at the location of the retail outlet.

To determine revenue and tax payable at each location, when the unit supplies goods to retail outlets, it must use sales invoices clearly stating quantity, type of goods, unit price, and total value of goods dispatched. Retail outlets must use sales invoices purchased from the tax authority at the location of the outlet when selling goods. If the outlet meets the conditions to declare and pay turnover tax based on the difference, the tax authority allows the application of the difference-based tax payment method, and if the unit implements a unified pricing mechanism (same price at production and retail locations) without price differences, the outlet does not need to pay turnover tax on these goods.

In cases where production bases organize warehouses in different locations (warehouses not directly engaged in sales), they must use invoices and declare and pay taxes as follows:

- When dispatching goods from the production base to affiliated warehouses or transferring goods from one warehouse to another, internal dispatch and transportation slips must be used. The production base and warehouses do not need to declare and pay turnover tax on internally circulated goods.

- When dispatching goods from warehouses to buyers, agents, and affiliated outlets, the production base must issue sales invoices and declare and pay turnover tax at the place of production according to the production industry rate.

5. For commercial trade units that organize warehouses and affiliated outlets, dependent accounting, there is no need to declare and pay turnover tax on internally circulated goods dispatched from the unit's warehouse to affiliated outlets or transferred between outlets within the unit. These cases must use internal dispatch and transportation slips.

6. For installment sale transactions:

Turnover tax revenue for goods sold on installment is determined by the total value of goods sold that the buyer actually pays, as recorded on the sales invoice or purchase contract.

Specifically, for house sales on installment over several years, turnover tax revenue calculation and payment is based on the amount due each period according to the installment contract.

7. Regarding service activities:

a. Postal services: Organizations and individuals not belonging to the Postal Industry such as hotels, restaurants... engaging in postal service activities like telephone, fax, etc., shall apply the following tax rates:

In cases where they provide services for the Postal Industry with economic contracts signed with the Postal Industry and only enjoy commission, the tax rate applied shall be 12% as in agency sales activities.

In cases where they do not engage in commission-based services but directly operate and collect money from postal business activities, they must pay taxes according to postal business operations at a rate of 4% on the total revenue from postal services. If it is not possible to separate the revenue, they must pay taxes based on the highest tax rate applicable to their business activities.

b. For rental activities of houses, shops, machinery..., the taxable revenue is the rental income received before deducting any cost.

- In cases of long-term rentals paid in advance for several months or years, the business tax is calculated and collected once on the entire amount paid by the taxpayer.

- In cases where tenants pay rent in advance partially or fully under the form of investment for renovation or reconstruction of the house or shop for use during the lease period, the entire amount paid in advance by the tenant for investment and renovation, as agreed and specified in the lease contract, shall be considered as prepaid rental income and the lessor must declare and pay business tax on this amount.

The determination of taxable revenue for rental activities of houses, shops... must be based on the lease contract, the rental price stipulated in the contract, and actual payment vouchers. If an inspection finds that the contract is invalid or the rental price recorded in the contract is incorrect, the tax authority must cooperate with relevant departments to inspect and verify, and the tax authority has the right to determine the taxable revenue based on the housing price set by the People's Committee of the province or city according to Article 22 of Decree No. 61/CP dated July 5, 1994 of the Government regarding the purchase and sale of residential properties. If violations of false declaration to evade taxes are discovered, they must be handled according to current laws.

The determination of revenue and expenses for calculating profit tax for various forms of prepayment for renting houses, shops... has specific guidelines.

c. Transportation service activities:

- In cases where services such as introducing cargo owners to transport means and finding cargo sources for transport means, including handling procedures, supervising transportation, and preserving goods for cargo owners are provided; if organizations or individuals providing these services only earn service fees, while costs for leasing transport means and loading/unloading are borne by the cargo owner or paid on behalf of the cargo owner as clearly stated in the economic contract, the service provider must pay business tax at a rate of 15% on the revenue or commission earned from the service (according to point 15.e - Section IV - Business Tax Table) regardless of the name of the contract being agency, brokerage, or transportation service.

In cases where the unit signs a contract with the cargo owner to transport goods on a lump-sum basis, and the contract does not specify specific costs and commissions; the calculation of business tax shall be applied as transportation activities, with taxable revenue being the total lump-sum revenue received (regardless of whether the unit transports itself or hires others).

III - REGARDING THE BUSINESS TAX RATE

Based on the business tax table issued together with Decree No. 55/CP dated August 28, 1993 of the Government and the business tax rates amended and supplemented in Decree No. 182/CP dated November 10, 1994 of the Government, the Ministry of Finance provides additional guidance on applying tax rates to certain specific business activities as follows:

1. Mining: Apply the tax rate according to the industry and product mined (point 2, Section I, Business Tax Table). In cases where the mining unit uses the extracted materials to produce other products, the business tax payable shall be calculated on the sold production product according to the tax rate of the producing industry or product.

Example: A unit mines stone and produces stone tiles for sale; the production of stone tiles shall be subject to business tax at a rate of 5% for construction material production.

2. Production of metal cables of all kinds, including power cables, communication cables, and telephone cables (with plastic, insulating material coating or without coating) shall apply the tax rate for metal smelting and rolling (point 4, Section I, Business Tax Table).

3. Production and new manufacturing of transportation means (excluding bicycles and motorcycles), machinery, equipment, production tools, molds, and spare parts of machinery and equipment... shall apply a tax rate of 1% (point 5a, Section I).

4. Production and assembly: locks, scales, silver safes, bicycles, motorcycles, sewing machines, watches, and spare parts of these products (excluding electronic products) and household items made of iron enamel, aluminum, zinc-coated roofing sheets, tin-coated sheets, shall apply a tax rate of 2% (point 5b, Section I).

5. Production of various types of insecticides, rodenticides, mouse repellents, cockroach repellents, fly repellents, mosquito repellents (including mosquito repellent incense) shall apply a tax rate of 0.5%, and production of basic chemical products (according to the product list of the Heavy Industry Department) shall apply a tax rate of 1% (point 7, Section I).

6. Production of oil paper, lime, bricks, roof tiles, refractory materials shall apply a tax rate of 5% (point 9, Section I).

7. Production and repair of various types (including soy milk production) shall apply a tax rate of 4% (point 15, Section I).

8. By-products recovered in production shall apply the tax rate according to the main production industry or product.

Example: A unit grinding food grains sells bran and rice husks as by-products, which shall be subject to business tax at a rate of 2% for the grinding activity.

Sale of scrap and by-products in cases where cost reduction is not accounted for shall apply a business tax rate of 1%. Sale of secondary products (second-grade, third-grade products...) shall apply the tax rate according to the main production industry or product.

9. Passenger transportation within urban areas and cities using vehicles such as cars, motorized rickshaws, bicycles... shall apply a tax rate of 1%. In cases where passenger transportation mainly serves officials, workers commuting from urban areas to adjacent regions.

Example: From Hanoi to Ha Dong town, from Ho Chi Minh City to Bien Hoa city, the transportation fare for intra-city travel shall also apply a tax rate of 1%.

10. Sale of the following items listed in the category of items subject to a tax rate of 1% (point 1, Section IV, Business Tax Table):

- Food grains,

- Food products,

- Types of production materials include: fuel, combustibles, various types of burning oil, various types of coal (including processed coal into briquettes, honeycomb coal for sale), lubricating oils, canvas, tarps.

- Transportation vehicles such as ships, boats, trucks, passenger cars, motorized rickshaws, farm tractors, improved vehicles, cargo handling vehicles (excluding bicycles, motorcycles with up to 15 seats).

- Production machinery and tools: machine tools, power machines, welding machines, generators... and other types of production tools, fishing gear.

- Sale of spare parts for machinery, equipment, transportation vehicles (excluding spare parts for consumer products such as bicycles, motorcycles, watches, cameras...).

- Sale (distribution) of books, newspapers, films (already developed film for projection). In cases where conditions are met to pay tax on the difference, apply a tax rate of 4% (point 10, Section IV, Tax Table).

11. Trading goods that cannot be distinguished as machinery, equipment (production materials), raw materials, spare parts to apply a tax rate of 1%, shall apply a tax rate of 2% for domestically produced goods, and a tax rate of 4% for imported goods (except for specific items already defined in point 4 - Section IV - Business Income Tax Table).

12. Remittance services earning commission, apply a tax rate of 6% like bank payment services (point 3b, Section VI).

13. Karaoke, advertising services, apply a tax rate of 8% (point 9, Section VI).

Advertising includes forms such as: advertising through mass media: TV, radio, newspapers, magazines, renting advertising locations, billboards, posters.

14. Operating sauna, massage services, apply a tax rate of 10% (point 11, Section VI).

15. Operating table tennis rentals, billiards, football tables, electronic games (excluding electronic lottery games), apply a tax rate of 4% (point 14, Section VI).

IV - REGARDING THE REDUCTION OF TAXES

1. New production establishments eligible for consideration for reduction of business income tax are those engaged in production activities within the industries listed in "Section I - Manufacturing Industries" of the Business Income Tax Table.

To be eligible for consideration for reduction of business income tax, new production establishments must meet the following conditions:

- Have a decision to establish a business, a business registration certificate clearly stating the industry and products being produced and traded. For individual households starting to operate, only a business license is required.

- Actually invest in purchasing machinery, equipment, construction (or leasing) of production workshops to form a new production establishment. For large enterprises (companies, factories), economic and technical feasibility studies for investment and construction, final accounts or handover records of basic construction projects for production must be available.

- Registered and declared for tax payment with the tax authority.

- Have a production and trading plan for the year requesting tax reduction, clearly stating the amount of business income tax payable and the requested reduction.

New production establishments applying for reduction of business income tax must submit the above documents along with their tax reduction application to the tax authority managing the unit. Copies of the business establishment's decision and business registration certificates must be notarized, and if other documents are copies, they must bear the stamp of the copy issued by the unit or the authority issuing the decision. The tax authority managing the unit is responsible for receiving and checking the documents and the actual situation of the unit to determine whether it is a new production establishment eligible for tax reduction. If the unit does not qualify for tax reduction, the tax authority must notify the unit in writing. If the unit qualifies for tax reduction but the documents are incomplete or incorrect, the tax authority must request the unit to supplement them. After reviewing and completing the documents, the tax authority will issue a written opinion attached to the unit's documents and submit them to the higher-level tax authority for review and resolution according to the prescribed authority.

New production establishments that meet the conditions specified above, but are subsidiaries or affiliated companies that consolidate profits into parent companies or groups, are only eligible for consideration for reduction of business income tax, not reduction of both business income tax and profit tax as stipulated herein, which applies only to production activities.

The following situations do not qualify as new production establishments eligible for tax reduction under this provision:

- Production establishments that were previously established and now have changed their name, ownership, division, merger, dissolution, and re-establishment (including joint ventures, joint-stock companies, limited liability companies established with capital contributions from machinery, equipment, and workshops of previous establishments).

- Production establishments that have been registered as businesses, or production and trading establishments currently operating and now investing in upgrading or changing product lines or adding production industries.

2. The authority to consider and decide on the reduction of business income tax as stipulated in Part C, Section IV of Circular No. 73A TC/TCT for the Director of the Tax Department is specifically determined as follows:

The Director of the Tax Department may consider and decide to reduce taxes for individual households, collective economic organizations, limited liability companies, and state-owned enterprises managed by localities (excluding companies established and operated under the Law on Foreign Investment) in cases of tax reduction as stipulated in points 1 and 2 of Part B of Circular No. 73A TC/TCT, with an average tax reduction of less than 4 million VND per month for each case.

In addition to the objects and cases of tax reduction under the authority of the Director of the Tax Department as stipulated above, other cases requesting tax reduction and cases under the authority of the Director of the Tax Department but with an average monthly tax reduction of 4 million VND or more all fall under the authority of the Minister of Finance or the Director of the General Department of Taxation (by delegation of the Minister of Finance).

The procedures for considering and reducing business income tax in all cases require the applicant to complete the necessary documents as prescribed, the tax authority to check the documents and the actual situation, and issue a decision to reduce taxes for cases within their authority, or propose in writing along with the unit's documents to the higher-level tax authority for review and decision. The tax reduction must be implemented according to the decision of the competent authority.

3. Supplemental guidance on the examination for exemption and reduction of tax for small production and business households subject to turnover tax and income tax on turnover who have experienced a decrease in monthly income due to actual cessation of business operations is as follows:

- Households with five days or fewer of actual business operation in a month shall be exempted from paying turnover tax and income tax for that month.

- Households with fifteen days or fewer of actual business operation in a month shall have their turnover tax and income tax for that month reduced by fifty percent.

To be eligible for tax reduction, the business household must submit a declaration form to the tax authority detailing the reasons and number of days of cessation of business operations (according to the application form for tax reduction and the guidance of the tax authority).

The decision to reduce taxes for small households that cease business operations as stipulated above falls within the jurisdiction of the Director of the Tax Revenue Office. The General Department of Taxation will provide specific guidance on procedures and documentation for examining tax reductions for households that cease business operations under this regulation.

V. IMPLEMENTATION

The additional and amended provisions regarding turnover tax in this Circular take effect from June 1, 1995. Previous guidelines on turnover tax that conflict with this document are no longer effective. Points not addressed in this Circular shall be implemented according to the guidelines set forth in Circular No. 73A TC/TCT.

Any difficulties encountered during implementation should be reported to the Ministry of Finance by relevant units and agencies for further study and supplementary guidance.

 

Vu Mong Giao (Signed)