Decree No. 78/1999/NĐ-CP amending and supplementing Decree No. 102/1998/NĐ-CP dated December 21, 1998 of the Government amending and supplementing some Articles of Decree No. 28/1998/NĐ-CP dated May 11, 1998 of the Government detailing the implementation of the Law on Value Added Tax.

DECREE OF THE GOVERNMENT

Amending and supplementing Decree No. 102/1998/NĐ-CP dated December 21, 1998 of the GovernmentAmending and supplementing some Articles of Decree No. 28/1998/NĐ-CP dated May 11, 1998 of the Governmentdetailing the implementation of the Value Added Tax Law

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THE GOVERNMENT

Pursuant to the Value Added Tax Law No. 02/1997/QH9 dated May 10, 1997;

Pursuant to Point 2, Section IV of Resolution No. 18/1998/QH10 dated November 25, 1998 of the National Assembly on the State budget estimate for 1999;

At the proposal of the Minister of Finance,

DECREE:

Article 1. Amending and supplementing some clauses of Article 1 of Decree No. 102/1998/NĐ-CP dated December 21, 1998 of the Government amending and supplementing some Articles of Decree No. 28/1998/NĐ-CP dated May 11, 1998 of the Government detailing the implementation of the Value Added Tax Law as follows:

1. Clause 1 shall be supplemented and amended as follows:

"1. Amending and supplementing some clauses of Article 4 of Decree No. 28/1998/NĐ-CP dated May 11, 1998 of the Government on objects not subject to value added tax:

Supplementing the beginning of Clause 4 as follows: aircraft, drilling platforms, ships leased from abroad that are not produced domestically, used for production and business operations.

Amending and supplementing Clause 13 as follows: printing, publishing, importing and distributing: newspapers, magazines, specialized newsletters, political books, textbooks, teaching materials, books of laws, books printed in ethnic minority languages; paintings, photographs, propaganda posters; printing money".

2. Clause 3 shall be supplemented and amended as follows:

d) The following cases are eligible for input tax deduction at the following rates:

Production and trading establishments paying value added tax under the input tax deduction method when purchasing agricultural, forestry, and aquatic products not yet processed directly from producers or direct harvesters without invoices but with receipts, or from traders with invoices, shall be eligible for input tax deduction at the following percentage rate based on the value of goods purchased according to receipts or invoices as follows:

A rate of 5% for plantation products such as rubber, resin, oil, cotton, sugarcane, fresh tea leaves, rice, corn, potatoes, cassava; livestock and poultry, fish, shrimp, and other aquatic products.

A rate of 3% for agricultural and forestry products not included in the group of products deductible at 5% mentioned above.

Production and processing establishments paying value added tax under the input tax deduction method when purchasing scrap materials directly from collectors without invoices but with receipts, or from aggregators with invoices, shall be eligible for input tax deduction at the following percentage rate based on the value of goods purchased according to receipts or invoices as follows:

A rate of 5% for scrap iron and steel;

A rate of 3% for other types of scrap materials.

In other cases, production and business establishments paying taxes under the input tax deduction method shall be eligible for input tax deduction as follows:

A rate of 5% for insurance compensation;

A rate of 4% for goods subject to special consumption tax purchased by trading establishments from production establishments for resale;

A rate of 3% for soil, gravel, sand, and pebbles purchased directly from extractors without invoices but with receipts, or from traders with invoices;

A rate of 3% for all other goods purchased from traders with invoices.

The input tax deduction or refund provisions set forth above shall not apply to cases where these products are used as raw materials for producing export goods or purchased for export.

In cases where a Vietnamese party enters into a contract with a foreign contractor and pays value added tax on behalf of the foreign contractor, the input tax paid on behalf of the foreign contractor shall be deductible".

3. Point 2, Clause 5 shall be amended and supplemented as follows:

"2. Some products, goods, and services currently facing difficulties shall have their tax rate reduced by 50%:

Mechanical products (excluding consumer mechanical products);

Iron, steel, non-ferrous metals, precious metals (gold, silver) smelting, rolling, drawing;

Various molds;

Coal, coke;

Computers;

Basic chemical products;

Explosives;

Car tires with sizes from 900 - 20 and above;

Products used as raw materials for producing medicines subject to value added tax within the 10% tax bracket;

Artificial limbs, crutches, wheelchairs specifically designed for disabled persons;

Goods subject to special consumption tax at the trading stage, taxed under the input tax deduction method;

Fishing nets, fishing ropes, and fishing threads;

Construction and installation;

Dredging of channels, ports, rivers, and sea ports;

Books subject to value added tax within the 10% tax bracket;

Transportation and loading/unloading;

Hotels, tourism, and catering;

Film distribution and screening".

Article 2. This Decree takes effect from September 1, 1999.

Article 3.The Minister of Finance shall guide the implementation of this Decree.

Ministers, Heads of ministerial-level agencies, Heads of agencies under the Government, Chairpersons of provincial People's Committees directly under the Central Government are responsible for implementing this Decree./.