Circular No. 41/2002/TT-BTC guides the implementation of tax policies for programs and projects using official development assistance (ODA) sources.

CIRCULAR

Guidelines for implementing tax policies for programs and projects using official development assistance (ODA) sources

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Based on current tax laws and ordinances of the Socialist Republic of Vietnam and detailed implementing decrees of the Government regarding these laws and ordinances;

Based on Article 28 of the Regulation on the management and use of official development assistance issued together with Decree No. 17/2001/NĐ-CP dated May 4, 2001 of the Government on the issuance of the Regulation on the management and use of official development assistance;

Based on Decree No. 178/CP dated October 28, 1994 of the Government stipulating the tasks, powers, and organizational structure of the Ministry of Finance;

The Ministry of Finance provides guidelines for implementing tax policies for programs and projects using official development assistance as follows:

I. GENERAL PROVISIONS

1. Programs and projects using official development assistance (hereinafter referred to as ODA projects), upon approval by competent authorities, shall fulfill their tax obligations according to the provisions of tax laws and regulations as detailed in Section II of this Circular.

2. Interest from loans sourced from ODA repayable to sponsors under international agreements on ODA is not subject to corporate income tax as prescribed in the Law on Corporate Income Tax.

3. In cases where international agreements (including international agreements on ODA) signed or joined by the Government of Vietnam contain tax provisions related to the implementation of specific ODA projects that differ from the guidelines set out in this Circular, the application of tax policies for such ODA projects shall be implemented according to those international agreements.

During the drafting and negotiation of framework international agreements on ODA or specific international agreements on ODA containing tax provisions contrary to current regulations, the Ministry of Planning and Investment or the lead negotiating agency must seek the written opinion of the Ministry of Finance before submitting to the Prime Minister for approval and signing with sponsors.

4. In cases where there are amendments, supplements, or replacements to documents related to the application of tax policies for ODA projects mentioned in this Circular, the application of tax policies for ODA projects shall be carried out according to the provisions of the amended, supplemented, or replaced documents.

Terms defined in Article 5 of the Regulation on the Management and Use of Official Development Assistance issued together with Decree No. 17/2001/NĐ-CP are used in this Circular with the meanings given in that Article. Additionally, in this Circular, the following terms are understood as follows:

- "Main contractor" refers to foreign organizations or individuals, or Vietnamese organizations or individuals, who directly enter into contracts with the ODA project sponsor to construct works or provide goods and services for the ODA project.

- "Foreign subcontractor" refers to foreign organizations or individuals engaged in business activities in Vietnam outside the forms of foreign investment under the Law on Foreign Investment in Vietnam, who enter into contracts with the ODA project sponsor to construct works or provide goods and services for the ODA project.

- "Foreign sub-subcontractor" refers to foreign organizations or individuals engaged in business activities in Vietnam outside the forms of foreign investment under the Law on Foreign Investment in Vietnam, who enter into contracts with the main contractor to perform part of the work under the main contractor's contract with the ODA project sponsor.

1. Export duties, import duties, and value-added tax:

1. Import duties:

The ODA project sponsor importing goods subject to import duties for the implementation of the ODA project must pay import duties according to the provisions of the Law on Export Duties and Import Duties, the Law Amending and Supplementing Certain Provisions of the Law on Export Duties and Import Duties, Decree No. 54/CP dated August 28, 1993, and Decree No. 94/1998/NĐ-CP dated November 17, 1998 of the Government detailing the implementation of the Law on Export Duties and Import Duties and the Law Amending and Supplementing Certain Provisions of the Law on Export Duties and Import Duties, Circular No. 172/1998/TT-BTC dated December 22, 1998 of the Ministry of Finance guiding the implementation of Decree No. 54/CP dated August 28, 1993, and Decree No. 94/1998/NĐ-CP dated November 17, 1998 (as mentioned above) and current guiding documents, except for cases of preferential exemption from import duties specified in Section III of this Circular.

2. Special consumption tax:

The ODA project sponsor importing goods, purchasing goods, or services subject to special consumption tax for the implementation of the ODA project must pay special consumption tax according to the provisions of the Law on Special Consumption Tax, Decree No. 84/1998/NĐ-CP dated October 12, 1998 of the Government detailing the implementation of the Law on Special Consumption Tax, Circular No. 168/1998/TT-BTC dated December 21, 1998 of the Ministry of Finance guiding the implementation of Decree No. 84/1998/NĐ-CP and current guiding documents, except for cases of preferential exemption from special consumption tax specified in Section III of this Circular.

3. Value-added tax:

The ODA project sponsor importing goods or purchasing goods or services subject to value-added tax for the implementation of the ODA project must pay value-added tax according to the provisions of the Law on Value-Added Tax, Decree No. 79/2000/NĐ-CP dated December 29, 2000 of the Government detailing the implementation of the Law on Value-Added Tax, Circular No. 122/2000/TT-BTC dated December 29, 2000 of the Ministry of Finance guiding the implementation of Decree No. 79/2000/NĐ-CP and current guiding documents, except for cases of preferential treatment regarding value-added tax specified in Section III of this Circular.

4. Income tax for high-income individuals:

Vietnamese and foreign individuals working for ODA project management boards, working for main contractors and foreign subcontractors performing construction works and providing goods and services for ODA projects, shall pay individual income tax according to the provisions of the Ordinance on Income Tax for High-Income Individuals No. 35/2001/PL-UBTVQH10 dated May 19, 2001, Decree No. 78/2001/NĐ-CP dated October 23, 2001 of the Government detailing the implementation of the Ordinance on Income Tax for High-Income Individuals, Circular No. 05/2002/TT-BTC dated January 17, 2002 of the Ministry of Finance guiding the implementation of Decree No. 78/2001/NĐ-CP and current guiding documents, except for cases of preferential treatment regarding individual income tax specified in Section III of this Circular.

5. Tax for foreign main contractors, foreign sub-contractors constructing projects, supplying goods and services for ODA projects:

Foreign main contractors or foreign sub-contractors shall fulfill their tax obligations according to Circular No. 169/1998/TT-BTC dated December 22, 1998, issued by the Ministry of Finance, guiding the tax regime applicable to foreign organizations and individuals conducting business activities in Vietnam that do not fall under the forms of foreign investment regulated by the Law on Foreign Investment in Vietnam, and Circular No. 95/1999/TT-BTC dated August 6, 1999, issued by the Ministry of Finance, amending and supplementing Circular No. 169/1998/TT-BTC.

III. TAX INCENTIVES FOR ODA PROJECTS

1. For non-reimbursable ODA projects:

1.1. Import duties, value-added tax (VAT), special consumption tax (SCT) on imported goods:

The direct importer or the agent importer of non-reimbursable ODA projects shall be exempt from import duties, including price differential (or surcharge) for certain imported goods (if any), and shall not have to pay VAT or SCT (if any) according to the provisions of the Law on Export Duties and Import Duties, the Law on Value-Added Tax, the Law on Special Consumption Tax, and current guiding documents regarding imported goods for implementing non-reimbursable ODA projects. Documents to be presented to the customs authority at the place of importation include:

- A letter requesting exemption from taxes;

- The decision of the competent authority approving the project using non-reimbursable ODA funds (a copy stamped and signed by the authorized person of the project owner). In cases of multiple imports, only the first import needs to be presented;

- A confirmation document of non-reimbursable aid goods issued by the Ministry of Finance;

- The import contract or agency import contract for goods, clearly stating that the goods are imported using non-reimbursable ODA funds (a copy stamped and signed by the authorized person of the project owner). In cases of multiple imports, only the first import needs to be presented;

- The declaration form for imported/exported goods.

The General Customs Department shall organize the implementation of the exemption of import duties and the non-inclusion of VAT and SCT (if any) for imported goods for implementing non-reimbursable ODA projects.

1.2. Value-added tax on goods and services purchased in Vietnam:

The owner of non-reimbursable ODA projects shall be refunded the VAT paid when directly purchasing goods and services subject to VAT in Vietnam for implementing non-reimbursable ODA projects, as guided in Point 3, Section IV, of this Circular.

The main contractor (regardless of whether they are a VAT taxpayer under the deduction method or the direct payment method), when constructing projects or providing goods and services to non-reimbursable ODA project owners, shall not calculate output VAT and shall be refunded the input VAT paid when purchasing goods and services used for construction projects or production and supply of goods and services to non-reimbursable ODA project owners, as guided in Point 3, Section IV, of this Circular.

The owner of non-reimbursable ODA projects may purchase cars from duty-free shops according to the quota issued by the Ministry of Planning and Investment for use in the project without having to pay import duties, VAT, and SCT (if any).

2. For preferential loan ODA projects:

2.1. Import duties:

In cases where the owner of preferential loan ODA projects invests in fields, industries, or locations encouraged for investment according to the Law on Domestic Investment Promotion, they shall be exempt from import duties on goods that are not domestically produced or are produced but do not meet quality requirements, as stipulated in Decree No. 51/1999/NĐ-CP dated July 8, 1999, issued by the Government, detailing the implementation of the Law on Domestic Investment Promotion and related guiding documents:

- Specialized equipment, machinery, and dedicated transportation means (part of the production line), imported to create fixed assets of enterprises or expand investment scale, and update technology;

2. This Circular takes effect fifteen days after its publication in the Official Gazette. The provisions of this Circular shall be uniformly applied to cases arising before the effective date of this Circular. However, in cases where customs authorities have already processed import duty exemptions according to Circular No. 803/TCT/CS dated February 20, 2003 of the General Department of Taxation - Ministry of Finance, no back taxes will be levied on the import duties that have been exempted.

2.2. Value-added tax (VAT):

2.2.1. The owner of preferential loan ODA projects shall not have to pay VAT on goods and services imported or purchased in the domestic market that are exempt from VAT as stipulated in Article 4 of the Law on Value-Added Tax, Article 4 of Decree No. 79/2000/NĐ-CP dated December 29, 2000, issued by the Government, detailing the implementation of the Law on Value-Added Tax, and guided in Section II, Part A, of Circular No. 122/2000/TT-BTC dated December 29, 2000, issued by the Ministry of Finance, guiding the implementation of Decree No. 79/2000/NĐ-CP and current guiding documents.

2.2.2. The owner of preferential loan ODA projects who receives full funding from the State Budget, or the owner of ODA projects who receives partial funding from the State Budget and partial loans, approved before May 29, 2001 (the effective date of Decree No. 17/2001/NĐ-CP), shall be refunded the VAT paid when purchasing goods and services subject to VAT for implementing ODA projects, as guided in Point 3, Section IV, of this Circular.

In cases where the owner of ODA projects awards contracts to main contractors (regardless of whether the main contractor is a VAT taxpayer under the deduction method or the direct payment method) to construct projects or provide goods and services for ODA projects at prices excluding VAT, the main contractor shall not calculate output VAT when issuing invoices for settlement with the project owner but shall be refunded the input VAT paid for goods and services purchased for construction projects or production of goods and services subject to VAT, provided according to the contract signed with the ODA project owner, as guided in Point 3, Section IV, of this Circular.

2.2.3. ODA projects receiving loans from the State Budget, and ODA projects receiving partial funding from the State Budget and partial loans, approved from May 29, 2001 onwards (the effective date of Decree No. 17/2001/NĐ-CP), shall implement declarations and payments of VAT or VAT refunds as prescribed in the Law on Value-Added Tax and current guiding documents.

2.3. Recording income and expenditure of import duties, special consumption tax, and VAT on imported goods:

The project owner using ODA concessional loan capital shall use the counterpart capital approved by the competent authority to pay import tax, value-added tax, and special consumption tax in the form of recorded income and expenditure for goods directly imported or entrusted to be imported for the implementation of the ODA project, and prepare a proposal for recorded income and expenditure and submit it to the Ministry of Finance. The proposal for recorded income and expenditure includes:

- A letter requesting recorded income and expenditure from the project owner clearly stating: the quantity, value of imported goods, the amount of import tax, special consumption tax, and value-added tax proposed for recorded income and expenditure; For the first request for recorded income and expenditure, the management agency of the project should also provide a letter requesting recorded income and expenditure.

- The decision approving the ODA project by the competent authority (a copy stamped and confirmed with the signature of the authorized person of the project owner). In cases where multiple requests for recorded income and expenditure are required, only the first submission is necessary;

- An authorization document from the competent authority allowing recorded income and expenditure for import tax, special consumption tax, and value-added tax on imported goods of the project (a copy stamped and confirmed with the signature of the authorized person of the project owner). In cases where multiple requests for recorded income and expenditure are required, only the first submission is necessary;

- The import contract or entrusted import contract for goods (a copy stamped and confirmed with the signature of the authorized person of the project owner). In cases where multiple requests for recorded income and expenditure are required, only the first submission is necessary;

- The declaration form for imported/exported goods (a copy stamped and confirmed with the signature of the authorized person of the project owner);

- The tax payment notice issued by the customs authority.

Within three working days from the date of receiving the tax notice from the customs authority, the project owner must submit the above documents to the financial management agency providing capital for the project. Within ten working days from the date of receiving all documents, the financial management agency providing capital for the project will process the recorded income and expenditure procedures. If the documents are incomplete, the financial management agency providing capital for the project will notify the project owner in writing within three working days to supplement the documents.

Based on the recorded income and expenditure vouchers issued by the Ministry of Finance, the local Department of Finance and Price will record the local budget revenue from the additional central budget allocation and record the capital investment for the project according to current regulations.

No recorded income and expenditure procedures for the state budget shall be carried out for fines resulting from violations in declaration and payment of taxes.

The project owner is responsible for accounting for the taxes recorded as income and expenditure according to current regulations.

Water supply projects using ODA concessional loans that are refinanced by the State Budget shall implement recorded income and expenditure procedures for import tax and value-added tax as guided in Circular No. 28/2001/TT-BTC dated May 3, 2001, of the Ministry of Finance.

3. Recovery of Taxes:

3.1. Goods imported or purchased at duty-free shops for the implementation of ODA projects, which are exempted from import tax and special consumption tax as stipulated in Point 1.1, Point 2.1, Section III of this Circular, if used for purposes other than those exempted from import tax and special consumption tax, or sold in the Vietnamese market, must be approved by the Ministry of Trade. The project owner must recover the import tax and special consumption tax that have been exempted.

The procedures for recovering import tax and special consumption tax shall be implemented as guided in Circular No. 172/1998/TT-BTC dated December 22, 1998, of the Ministry of Finance guiding the implementation of Decree No. 54/CP dated August 28, 1993, and Decree No. 94/1998/NĐ-CP dated November 17, 1998, of the Government detailing the implementation of the Law on Export Tax and Import Tax and the Law Amending and Supplementing Certain Provisions of the Law on Export Tax and Import Tax, and as guided in Circular No. 168/1998/TT-BTC dated December 21, 1998, of the Ministry of Finance guiding the implementation of Decree No. 84/1998/NĐ-CP dated October 12, 1998, of the Government detailing the implementation of the Special Consumption Tax Law.

3.2. Goods subject to VAT, imported for the implementation of ODA projects but the project owner does not need to pay VAT, or goods subject to VAT imported or purchased in the Vietnamese market but the project owner has already received a refund of VAT, if sold in the Vietnamese market, must pay VAT and other taxes according to current regulations.

For ODA projects where the project owner is state management agencies, political organizations, or social-political organizations that do not engage in business, when selling goods in the Vietnamese market, the project owner must request the tax authority to provide individual invoices to issue to buyers, while sending the third copy of the invoice to the tax authority for monitoring the use of invoices, with full details of the value of goods, VAT rate, and VAT amount noted on the invoice. The project owner must declare and pay taxes according to current regulations; when selling goods through asset liquidation, the project owner must have a sale decision as guided in Circular No. 17/1999/TT-BTC dated February 5, 1999, of the Ministry of Finance, and request the tax authority to provide individual invoices to issue to buyers, while sending the third copy of the invoice to the tax authority for monitoring the use of invoices, with no VAT rate and VAT amount noted on the invoice. The project owner does not need to pay VAT but must pay other related taxes when liquidating assets.

4. Exemption of Taxes and Fees for Foreign Experts Working on ODA Projects:

In cases where individuals from foreign countries are recognized by the Ministry of Planning and Investment as foreign experts implementing ODA programs and projects and are eligible for tax and fee benefits under the Regulations on Foreign Experts issued together with Decision No. 211/1998/QĐ-TTg dated October 31, 1998, of the Prime Minister, they shall be exempted from import tax, special consumption tax, VAT, stamp duty, and personal income tax as guided in Circular No. 52/2000/TT-BTC dated June 5, 2000, of the Ministry of Finance guiding the implementation of exemptions for taxes and fees for foreign experts implementing ODA programs and projects.

5. Import duties, export duties, and value-added tax on machinery, equipment, and transportation vehicles imported by foreign contractors under temporary importation and re-exportation for construction purposes of ODA projects:

Machinery, equipment, and transportation vehicles imported by main foreign contractors and sub-contractors through temporary importation and re-exportation for construction purposes of ODA projects shall be exempt from import duties, and shall not be subject to value-added tax during the construction period of the ODA project, and shall also be exempt from export duties when re-exported.

Documents to be presented to the customs authority at the point of importation of machinery, equipment, and transportation vehicles include:

- A letter requesting exemption from the contractor;

- The construction contract signed with the ODA project owner (a certified copy bearing the stamp and signature of the authorized representative of the contractor). In cases where machinery and equipment are imported multiple times, only the first importation needs to be presented;

- A consolidated list of machinery, equipment, and transportation vehicles required for construction of the ODA project, confirmed by the project owner indicating that the contractor imports them for construction purposes using ODA funds;

- A letter from the Ministry of Trade permitting temporary importation and re-exportation;

- The declaration form for imported/exported goods.

Main foreign contractors and sub-contractors must re-export machinery, equipment, and transportation vehicles upon completion of the construction project. If they sell these items in the domestic market, they must obtain approval from the Ministry of Trade and pay import duties, value-added tax, special consumption taxes (if applicable), and other taxes as prescribed by current tax laws.

The General Department of Customs shall implement the exemption of import duties and non-inclusion of value-added tax on machinery, equipment, and transportation vehicles temporarily imported by foreign contractors for construction purposes, and the exemption of export duties when re-exporting.

For passenger cars with less than 24 seats and vehicles designed to carry both passengers and goods equivalent to passenger cars with less than 24 seats, the temporary importation and re-exportation procedure does not apply. Foreign contractors wishing to import such vehicles into Vietnam for use must pay import duties and special consumption taxes as stipulated by law. Upon completion of the construction project, foreign contractors must re-export the imported vehicles to their home countries and will be refunded the paid import duties and special consumption taxes according to the guidelines set forth in Circular No. 172/1998/TT-BTC dated December 22, 1998, and Circular No. 168/1998/TT-BTC dated December 21, 1998, issued by the Ministry of Finance.

IV. IMPLEMENTATION

1. Provision of documents for tax management of ODA projects:

During the implementation of ODA projects, when submitting periodic reports (monthly, quarterly, annual, and final reports) as guided by Circular No. 06/2001/TT-BKH dated September 20, 2001, issued by the Ministry of Planning and Investment guiding the implementation of regulations on the management and use of official development assistance, the Project Management Board shall submit an additional report to the local tax authority where the project management office is located and the tax authority where the construction site of the ODA project is located (in cases where the construction site of the ODA project is in a different locality from the location of the project management office).

Within ten working days from signing the construction and installation contracts, supply of goods, and service provision contracts with main contractors, project owners must send a certified copy of the contract (bearing the stamp and signature of the authorized representative of the project owner) to the local tax authority where the project management office is located and the tax authority where the construction site of the ODA project is located (in cases where the construction site of the ODA project is in a different locality from the location of the project management office).

2. Determination of ODA provision form and applicable tax policies:

The basis for applying tax policies and VAT refunds as guided by this Circular is the decision approving the ODA project by the competent authority and the guidance on the form of ODA provision at Point 1.2, Section I of Circular No. 06/2001/TT-BKH dated September 20, 2001, issued by the Ministry of Planning and Investment. In cases where the investment decision does not clearly state that the ODA is non-reimbursable or concessional loans fully funded by the State budget, the project owner or main contractor must supplement a document from the issuing authority specifying the form of ODA provision for the project. For projects decided on investment by the Prime Minister, the Ministry of Planning and Investment will confirm the form of ODA provision for the project.

In cases where a project uses concessional loan ODA but includes a portion of non-reimbursable ODA funded by a separate agreement with the donor, the application of tax policies will be implemented separately for each part of the project according to the respective forms of ODA provision.

3. Refund of VAT for ODA projects with non-reimbursable aid and concessional loan ODA eligible for VAT refund:

3.1. Registration procedures for tax identification number:

- For main contractors:

Domestic main contractors shall use the tax identification number already issued for transactions and VAT refund procedures or request the tax authority to issue a tax identification number for dependent units for transactions and VAT refund procedures related to construction and installation works, supply of goods, and service provision for ODA projects.

Foreign main contractors currently operating in Vietnam and holding a tax identification number may continue to use it for VAT refund procedures. In cases where foreign main contractors have been issued a tax identification number but operate under multiple contracts in Vietnam, they should request the tax authority to issue a tax identification number for dependent units for use in transactions and VAT refund procedures related to construction and installation works, supply of goods, and service provision for ODA projects.

Foreign contractors who are visiting Vietnam for the first time to conduct business or are currently conducting business in Vietnam but have not been issued a tax code (contractors declaring and paying taxes through Vietnamese organizations or individuals via withholding tax methods) must prepare and submit an application form to the local tax authority where their management office is located (for contractors with a management office) or to the local tax authority where the construction project is located according to Form No. 04-ĐK-TCT issued together with Circular No. 79/1998/TT-BTC dated June 12, 1998, of the Ministry of Finance, in order to obtain a tax code.

In cases where the main contractor is a consortium consisting of multiple parties each performing separate tasks, each party shall issue invoices for their own revenue and the tax authority will issue a tax code to each member of the consortium (if they have not yet been issued a tax code). If the parties in the consortium divide income according to a contract, the tax authority will issue a tax code to the consortium member responsible for consolidating the financial results of the consortium (if they have not yet been issued a tax code) to be eligible for VAT refund. If the parties in the consortium divide revenue according to a contract, the tax authority will issue a tax code to the consortium member responsible for issuing invoices to the project owner to be eligible for VAT refund. If the consortium establishes a joint management board which handles accounting, has a bank account, and is responsible for issuing invoices and receiving payments from the project owner, the tax authority will issue a tax code to the joint management board to be eligible for VAT refund. The consortium members will issue invoices with VAT when they receive payments from the joint management board.

For Project Owners:

Project owners who have registered a tax code shall use that code in transactions and for procedures related to VAT refunds. New project owners, within ten days of receiving the Investment Decision from the competent authority, shall prepare and submit an application for a tax code to the local tax authority where the project management office is located, following the guidelines set out in Circular No. 79/1998/TT-BTC dated June 12, 1998, of the Ministry of Finance.

In cases where project owners have registered a tax code but delegate a unit (Project Management Board) to manage and separately account for the input VAT generated during the project implementation using ODA funds, the tax authority will issue a tax code applicable to dependent units for the delegated unit.

3.2. Documentation for VAT Refund:

The documentation and procedures for VAT refund shall follow the guidelines provided in Point 3, Section II, Part D, Circular No. 122/2000/TT-BTC dated December 29, 2000, of the Ministry of Finance, guiding the implementation of Decree No. 79/2000/NĐ-CP dated December 29, 2000, of the Government detailing the implementation of the Law on Value Added Tax. The responsibilities of entities entitled to VAT refunds, the authority, and the procedure for VAT refunds shall follow the guidelines provided in Sections III and IV, Part D, Circular No. 122/2000/TT-BTC dated December 29, 2000, of the Ministry of Finance.

3.3. Location for VAT Refunds:

- For project owners: at the Provincial Tax Department where the project management office is located.

- For main contractors: at the Provincial Tax Department where the main contractor's management office is located (for contractors with a management office) or at the Tax Department where the construction work is being carried out.

3.4. Procedure for VAT Refunds:

- Project owners and main contractors eligible for VAT refunds must prepare and submit an application for VAT refund immediately upon receipt of payment invoices, if payments are made periodically with intervals between payments exceeding one month, or submit a periodic application for VAT refund at least once every month but with intervals between periods not less than ten days (project owners or main contractors must pre-register with the tax authority regarding the schedule for submitting VAT refund applications). Within three working days of receiving a complete application for VAT refund, the tax authority will review and issue a decision on VAT refund. If additional documentation is required for the VAT refund application, the tax authority must notify the project owner or main contractor in writing within three working days.

- For projects utilizing ODA loans granted by the State Budget and eligible for VAT refunds: if the VAT refund is for the main contractor, the VAT refund application of the main contractor must include confirmation from the project owner regarding the amount of VAT to be refunded before submitting the application to the tax authority. If the contractor declares input VAT that is not used for constructing ODA-funded projects or producing goods or services subject to VAT for ODA projects, the project owner must provide immediate confirmation in the VAT refund application to accurately determine the amount of VAT to be refunded.

- The tax authority will not refund VAT in cases where the project owner directly imports goods subject to VAT, but the VAT at the import stage has already been recorded as income or expense.

- When issuing a decision on VAT refund, in addition to the circulated copies as per Form No. 14/GTGT "Decision on VAT Refund" issued together with Circular No. 122/2000/TT-BTC dated December 29, 2000, of the Ministry of Finance, the tax authority must also send an additional copy to the project owner. For projects utilizing ODA loans granted by the State Budget and eligible for VAT refunds, in addition to the aforementioned copies, the tax authority will send one copy to the Ministry of Finance (Investment Department) to process the increase in investment capital as per Circular No. 42/2001/TT-BTC dated June 12, 2001, of the Ministry of Finance, guiding the management and accounting of VAT refund capital for ODA projects.

- If the project owner receives funding from the State Budget to pay VAT, when the VAT refund is received, the project owner must repay the State Budget as per Circular No. 42/2001/TT-BTC dated June 12, 2001, of the Ministry of Finance, guiding the management and accounting of VAT refund capital for ODA projects.

- After value-added tax refund, if any doubts arise requiring post-refund inspection and audit, the tax authority shall issue a decision to conduct such inspection and audit. The inspection, audit, and handling of violations related to value-added tax refunds shall be carried out in accordance with current regulations.

4. This Circular takes effect fifteen days from the date of signature. All previous guidance on taxes applicable to ODA projects issued by the Ministry of Finance that contradicts this Circular are hereby abolished.