Circular No. 4366/TCT/NV5 stipulates the rules for deducting input VAT and determining reasonable costs for PVGC Company when entering into contracts with agents. The document guides the issuance of invoices, tax declaration, and handling expenses incurred by agents.
Scope of application
[PVGC Company; Minh Hoang Private Enterprise]
Key points
- Minh Hoang Private Enterprise must issue VAT invoices when receiving payments from PVGC Company and declare taxes in accordance with regulations (Point 1).
- Monthly detailed expense statements and input VAT of Minh Hoang Private Enterprise are to be prepared for issuing invoices to PVGC Company (Point 2).
- Invoices paid on behalf before this guidance, if not yet declared for input VAT deduction or reasonable cost determination by Minh Hoang Private Enterprise, can be declared for VAT deduction and included in reasonable costs by PVGC Company (Point 3).
- PVGC Company is entitled to deduct input VAT from invoices issued by the agent when incurring expenses consistent with signed contracts.
- Minh Hoang Private Enterprise must prepare detailed statements of goods and services purchased according to each tax rate.
🌐 Social impact of this document
- PVGC Company can deduct input VAT from invoices issued by the agent, reducing financial burden.
- Minh Hoang Private Enterprise must comply with regulations on preparing detailed statements and issuing invoices to PVGC Company.
- Verifying invoices before this guidance ensures the legality of input VAT.
❓ Frequently asked questions
What actions does Minh Hoang Private Enterprise need to take for input VAT deduction?
Minh Hoang Private Enterprise must prepare detailed statements of goods and services purchased according to each tax rate and issue invoices to PVGC Company.
From which invoices can PVGC Company deduct input VAT?
PVGC Company is entitled to deduct input VAT from invoices issued by Minh Hoang Private Enterprise when incurring expenses consistent with signed contracts.
What is the significance of verifying invoices before this guidance?
Verifying invoices ensures the legality of input VAT and reasonable costs for PVGC Company.
Full text
LETTER
OF THE GENERAL DEPARTMENT OF TAXATION NO. 4366/TCT/NV5 DATED OCTOBER 30, 2001 REGARDING WITHHOLDING TAX AND DETERMINING COSTS
OF PVGC COMPANY
Dear: Bà Rịa - Vũng Tàu Provincial Tax Department
In response to the letter No. 2190/CT-TTr dated August 16, 2001 of the Bà Rịa - Vũng Tàu Provincial Tax Department regarding withholding VAT on input tax and determining reasonable costs for the PetroVietnam Gas Corporation (PVGC), the General Department of Taxation provides its opinion as follows:
Pursuant to Article 4 of Circular No. 99/1998/TT-BTC dated July 14, 1998 issued by the Ministry of Finance guiding the implementation of Decree No. 30/1998/NĐ-CP dated May 13, 1998 of the Government detailing the implementation of the Law on Corporate Income Tax, expenses related to the formation of taxable income in the tax year as stipulated in Section III, Part B of the Circular shall be deductible when determining taxable income.
Pursuant to Article 4 of the Issuance, Management and Use Regulations for Sales Invoices issued together with Decision No. 885/1998/QĐ-BTC dated July 16, 1998 by the Minister of Finance, organizations and individuals must issue legal invoices when selling goods or services and receiving payment or exchanging products; each VAT invoice is issued for goods and services with the same VAT rate.
In the case where Minh Hoang Private Enterprise (the agent) signs a contract with PVGC Company (the ship owner) to act as an agent for Condensate-carrying vessels of PVGC, the VAT obligations shall be implemented as follows:
1. For tasks directly performed by the agent, the agent must issue VAT invoices to collect money from PVGC and declare and pay VAT according to regulations.
2. For expenses paid on behalf of PVGC by the agent in accordance with the signed contract (invoices bearing the name and tax code of Minh Hoang Private Enterprise), the following shall be implemented:
- Monthly, Minh Hoang Private Enterprise prepares a list detailing costs and VAT for goods and services purchased according to each category (goods and services not subject to VAT; goods and services with a 5% VAT rate; goods and services with a 10% VAT rate; goods and services with a 20% VAT rate).
- Based on the list of costs and input VAT, Minh Hoang Private Enterprise issues VAT invoices for PVGC according to the same VAT rate as those listed. The VAT amount stated on the invoice is the output VAT of Minh Hoang Private Enterprise and the input VAT of PVGC.
3. For invoices paid by Minh Hoang Private Enterprise prior to this guidance, currently stored at PVGC, Bà Rịa - Vũng Tàu Provincial Tax Department shall verify if these invoices have not been declared for input VAT deduction or included in reasonable costs of Minh Hoang Private Enterprise; they may be declared for VAT deduction and included in reasonable costs of PVGC.
The General Department of Taxation provides this response for the Bà Rịa - Vũng Tàu Provincial Tax Department to know and guide relevant units to implement.
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