Circular No. 82/2002/TT-BTC guiding amendments and supplements to certain contents of Circular No. 122/2000/TT-BTC dated December 29, 2000 guiding the implementation of Government Decree No. 79/2000/ND-CP dated December 29, 2000 detailing the implementation of the Value Added Tax (VAT) (<font color="red">Attached Content</font>)

CIRCULAR

Guidelines for amending and supplementing certain contents of Circular No.

122/2000/TT-BTC dated December 29, 2000 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 (VAT).

 

Pursuant to the Law on VAT No. 02/1997/QH9 dated May 10, 1997;

Pursuant to Resolution No. 116/2002/NQ-UBTVQH11 dated September 10, 2002 on amending and supplementing the VAT rate for certain industrial concrete products;

Pursuant to Decree No. 79/2000/NĐ-CP dated December 29, 2000 of the Government detailing the implementation of the Law on VAT;

Pursuant to Decree No. 76/2002/NĐ-CP dated September 13, 2002 of the Government amending and supplementing some articles of Decree No. 79/2000/NĐ-CP dated December 29, 2000 of the Government detailing the implementation of the Law on VAT,

The Ministry of Finance guides the supplementation and amendment of certain points in Circular No. 122/2000/TT-BTC dated December 29, 2000 guiding the implementation of Decree No. 79/2000/NĐ-CP (mentioned above) as follows:

 

I. REGARDING GOODS AND SERVICES NOT SUBJECT TO VAT:

Replace paragraph 2 at Point 20, Section II, Part A of Circular No. 122/2000/TT-BTC: "- Goods and services sold to exempt entities outside diplomatic transactions... of Vietnamese representative offices for tax declaration and settlement purposes" with the new paragraph 2 as follows:

"-Goods imported by organizations and individuals belonging to exempt entities under the Diplomatic Exemption Decree shall enjoy VAT exemption benefits according to current regulations. In cases where goods and services are purchased in Vietnam subject to VAT, VAT refunds will be made according to the guidance at Point 1, Section V of this Circular."

II. REGARDING THE TAXABLE VALUE FOR PRINTING SERVICES:

Replace Point 17, Section I, Part B of Circular No. 122/2000/TT-BTC with the new Point 17 as follows:

"17. For printing services, the taxable value is the printing fee. If the printing entity performs printing contracts that include both the printing fee and paper costs, the taxable value includes the paper cost."

III. REGARDING THE VAT RATE:

1/ Replace Point 1 of Section II, Part B of Circular No. 122/2000/TT-BTC with the new Point 1 as follows:

"1. The 0% VAT rate applies to:

1.1 Exported goods including export processing goods, goods produced subject to special consumption tax for export, and exported computer software products.

Export includes exporting to foreign countries, selling to enterprises in export processing zones, and other cases as prescribed by the Government.

Cases where goods are taken out of the country for sale or product promotion at exhibitions and fairs, if there is sufficient evidence to determine them as exported goods, also apply the 0% VAT rate.

Exported goods applying the 0% VAT rate must have documents and certificates proving they were actually exported, specifically as follows:

Sales contracts for goods or processing contracts for export, or consignment export contracts for consignment exports.

VAT invoices for sales or returns of processed goods to foreign countries, export processing enterprises, and other entities recognized as exports according to government regulations.

Exported goods to foreign traders, export processing enterprises must be settled through banks. Payment vouchers with foreign traders must comply with the State Bank of Vietnam's regulations.

Customs declarations for exported goods must be confirmed by customs authorities as having been exported. For consignment exports, customs declarations from the consignee must be provided, and if copies, they must be signed and stamped by the consignee.

1.2 Repairing machinery, equipment, transportation means, providing software services to foreign countries, export labor services; construction and installation projects abroad and by export processing enterprises.

Cases applying the 0% VAT rate must meet the following conditions and documents:

Contracts for repairing machinery, equipment, transportation means, construction, installation, export labor services, and software provision signed with foreign countries or export processing enterprises;

VAT invoices for service payments applying the 0% rate;

Repairs of machinery, equipment, transportation means, and software provision to foreign countries or export processing enterprises; export labor services; construction and installation projects abroad and by export processing enterprises must be settled through banks. Payment vouchers with foreign traders must comply with the State Bank of Vietnam's regulations.

1.3 Certain cases where goods are considered as exported and apply the 0% VAT rate:

a/ Processing goods for export transferred according to Article 17 of Decree No. 57/1998/NĐ-CP dated July 31, 1998 of the Government detailing the implementation of the Law on Commerce regarding export, import, processing, and agency purchase and sale of goods with foreign countries:

This applies to processing goods for export by the direct processor according to a processing contract signed with a foreign party (called the delivery entity), but the processed goods have not yet been exported to foreign countries and are instead transferred to another domestic entity (called the receiving entity) designated by the foreign party for further processing into finished products according to the contract signed with the foreign party, with payment directly made by the foreign party.

When transferring processed goods for export to another entity according to the designation of the foreign party, the delivery entity issues a VAT invoice indicating a 0% rate. Processed goods for export must have the following documents and certificates:

Processing contracts for export and related contract accessories (if any) signed with foreign parties, clearly stating the receiving entity in Vietnam.

VAT invoices clearly stating the processing fee and quantity of processed goods returned to foreign parties (as stipulated in the contract signed with foreign parties) and the name of the receiving entity designated by the foreign party;

Transfer receipt for transferred processed goods (shortened as Transfer Receipt) must have signatures and stamps of both the delivering and receiving entities, and confirmation from the customs authority managing the processing contract.

Processed goods for foreign traders must be settled through banks. Payment vouchers with foreign traders must comply with the State Bank of Vietnam's regulations.

Procedures for receiving and transferring processed goods and Transfer Receipts shall be carried out according to the General Customs Department's regulations.

Example: Company A signed a processing contract with a foreign party to export 200,000 pairs of shoe soles. The processing fee is 800 million VND. The contract clearly states that the shoe soles will be delivered to Company B in Vietnam for the production of complete shoes.

In this case, Company A falls under the category of processing goods for re-export. When preparing the transfer documents for delivering the shoe soles to Company B, Company A must clearly indicate the quantity, type, specifications of the products transferred, and the entire processing revenue of 800 million VND received, subject to a VAT rate of 0%.

The Standing Office of the Council for International Cooperation on Non-Governmental Organizations (Vietnam Friendship Association) is the agency responsible for receiving registration dossiers, leading, and coordinating with member agencies of the Council to examine dossiers and return results of reviews of registration dossiers of foreign non-governmental organizations in Vietnam./ Goods processed for export through a direct contracting entity signing a processing contract with a foreign party:

The conditions for goods processed for export through a direct contracting entity signing a processing contract with a foreign party shall apply a tax rate of 0%:

The processing price on the contract signed with the foreign party must be equal to the processing price stipulated in the contract signed between the direct processing entity and the direct contracting entity signing the processing contract with the foreign party.

The direct contracting entity signing the processing contract with the foreign party only enjoys commission on the processing fees.

Processed goods for foreign traders must be settled through banks. Payment vouchers with foreign traders must comply with the State Bank of Vietnam's regulations.

When exporting processed goods to the direct contracting entity signing the processing contract with the foreign party, the direct processing entity for export shall issue a VAT invoice for payment of the processing fee, with a tax rate of 0%.

In this situation, the processing entity for exported goods must have the following documents to serve as the basis for applying a tax rate of 0%:

The processing contract signed with a foreign party by the direct contracting entity signing the processing contract with the foreign party (a copy), signed and stamped by the entity;

The export processing contract signed with the direct processing entity signing the processing contract for export with a foreign party.

The export declaration form of the direct contracting entity signing the processing contract with the foreign party, confirmed by Customs regarding the actual quantity and types of processed goods exported (a copy). In cases where the Customs declaration form lists the exported goods of multiple processing entities, the direct contracting entity signing the processing contract with the foreign party must submit a copy of the Customs declaration form along with a detailed confirmation list regarding the actual quantity and types of consigned processed goods exported by the processing entity. The consignee must sign and stamp the confirmation list and the copy of the Customs declaration form and bear responsibility for the data listed on the confirmation list.

The settlement statement of the consigned export processing contract (if the contract has been concluded) or the periodic account reconciliation statement clearly indicating the quantity of processed export products delivered, the actual quantity exported, the processing fee due for payment, and the amount already paid; it must also specify the number and date of the payment document with the foreign trader (the payment document of the direct contracting entity signing the processing contract with the foreign trader), and the method of bank transfer.

If these documents are copies, they must be certified as true copies, signed by the director and stamped by the enterprise holding the original.

Example: Company X signed a processing contract with a foreign party to manufacture 100,000 sets of clothing with a processing fee of 200 million VND, but Company X signed this contract through Import-Export Company Y to export the processed goods to the foreign party with a commission of 5% of the processing fee.

In this case, Company X falls under the category of processing goods for export. When issuing the export invoice to Company Y, Company X can record a tax rate of 0%, and the entire processing revenue of 200 million VND received from the export of processed goods is subject to a VAT rate of 0%. The export commission of Company Y must be subject to VAT according to regulations.

1.4 For the export of goods and services to repay foreign debts for the Government; goods and services exported for payment in kind, the payment documents shall be implemented according to specific guidelines issued by the Ministry of Finance.

2/ Replace Point 2.14, Section II, Part B Circular No. 122/2000/TT-BTC with the new Point 2.14 as follows:

"2.14Soil, stone, sand, gravel (excluding products made from soil, stone, sand, gravel such as cut stone, stone tiles, granite); Industrial concrete products: prestressed concrete beams, concrete columns and frames, concrete piles, concrete utility poles, concrete pipes and boxes of various types, prefabricated reinforced concrete components meeting standards, ready-mixed concrete;"

IV. VAT deduction:

1/ Replace Point 1.2b, Section III, Part B Circular No. 122/2000/TT-BTC with the new Point 1.2b as follows:

"The Standing Office of the Council for International Cooperation on Non-Governmental Organizations (Vietnam Friendship Association) is the agency responsible for receiving registration dossiers, leading, and coordinating with member agencies of the Council to examine dossiers and return results of reviews of registration dossiers of foreign non-governmental organizations in Vietnam./ Input VAT equals (=) the total VAT recorded on the VAT invoices for purchasing goods and services (including fixed assets) used for producing and trading goods and services subject to VAT, the VAT recorded on import tax payment documents (or paid on behalf of the foreign party according to Point 3, Section II, Part C of Circular No. 122/2000/TT-BTC), and the deductible input VAT at a rate of 1% on the purchase price for:

Goods and services subject to VAT purchased from business entities paying VAT using the direct method based on value-added, with sales invoices in Form 02/GTTT-3LL or Form 02/GTTT-2LN issued according to Decision No. 885/1998/QĐ-BTC dated July 16, 1998, of the Minister of Finance (referred to as sales invoices);

Raw agricultural, forestry, and aquatic products not yet processed, purchased from production entities not subject to VAT at the production stage, using VAT invoices specified in Point 5.1, Section IV, Part B of Circular No. 122/2000/TT-BTC;

Goods subject to special consumption tax purchased by commercial trade entities from production entities for resale, with sales invoices (including purchases from agents selling goods subject to special consumption tax at the correct price of the production entity, receiving commissions);

Insurance compensation expenses for insurance operations subject to VAT (calculated based on the value of the insurance compensation) are the responsibility of the insurance business entity;

Purchased goods (with an inventory list) are raw agricultural, forestry, and aquatic products not yet processed; soil, stone, sand, gravel, and waste materials purchased from sellers without invoices. For production entities producing raw agricultural, forestry, and aquatic products not yet processed which are not subject to VAT, if these entities use these products to continue producing other taxable goods, the deduction rate is the production cost of the agricultural, forestry, and aquatic products.

The above deduction rate applies to purchase invoices and documents for goods and services from October 1, 2002, and is uniformly applied to both domestic and export transactions.

In cases where the purchased goods or services are of a type that uses special vouchers (including national reserve goods invoices issued by the national reserve agency) recording the payment price including VAT, the entity shall base on the price including VAT and the calculation method specified at Point 14, Section I, Part B of Circular No. 122/2000/TT-BTC to determine the price excluding VAT and the deductible input VAT.

Example: During the period, Company A pays for input services eligible for deduction:

The total payment amount is 110 million VND (inclusive of VAT), this service is subject to a 10% tax rate, the calculation of the deductible VAT input tax is as follows:

110 million VND

---------- x 10% = 10 million VND

1 + 10%

The price exclusive of VAT is 100 million VND, the VAT is 10 million VND".

2/ Amend the percentage figures of 3%, 2% to 1% at Point 1.3, Section III, Part B of Circular No. 122/2000/TT-BTC.

V. VAT REFUND:

1/ Add Point 7 to Section I, Part D of Circular No. 122/2000/TT-BTC as follows:

"7-The objects entitled to diplomatic exemption benefits under the Ordinance on Diplomatic Exemption purchasing goods and services in Vietnam shall be refunded the VAT paid as recorded on the VAT invoice. Businesses selling goods and services to these objects in Vietnam must still calculate VAT when issuing the VAT invoice. The objects, goods, services, and procedures for enjoying the VAT exemption benefit are guided in this point and Section I of this Circular according to the specific guidance of the Ministry of Finance.

2/ Add Point 8 to Section I, Part D of Circular No. 122/2000/TT-BTC as follows:

"8-Classification of refund objects:

a/ Objects subject to pre-refund inspection and audit:

Newly established businesses operating for less than one year requesting their first refund;

Businesses that have committed acts of VAT fraud as stipulated in Section VI of this Circular;

Businesses exporting agricultural, forestry, aquatic products not processed through land border;

Businesses undergoing division, dissolution, bankruptcy.

b/ Objects subject to pre-refund before post-inspection: are those not included in the objects defined in Point 8.a above.

of/ In cases where the refund application dossier has been submitted fully and correctly but is currently under investigation or prosecution for VAT fraud by competent authorities, the refund process will be temporarily suspended until a decision is made on handling.

For businesses with acts of VAT fraud, falling within the scope of pre-refund inspection and audit, if they comply well with tax laws and invoice management regulations for 12 months after the initial application, they may be eligible for pre-refund before post-inspection. The Tax Authority will examine each case specifically.

3/ Replace Point 1, Section II, Part D of Circular No. 122/2000/TT-BTC with the new Point 1 as follows:

"1-The refund VAT dossier for the cases mentioned in Points 1 and 2, Section I, Part D of Circular No. 122/2000/TT-BTC includes:

A letter requesting VAT refund clearly stating the reasons for refund, the amount of tax requested for refund, and the time of refund (according to Model No. 10/GTGT issued along with Circular No. 122/2000/TT-BTC).

A summary table of output VAT generated, deductible input VAT, taxes already paid (if any), and the excess input VAT proposed for refund.

An inventory list of purchased goods and services, sales during the period related to the determination of input VAT and output VAT (Model Nos. 02/GTGT, 03/GTGT, 04/GTGT issued along with Circular No. 122/2000/TT-BTC and this Circular).

For refunds under Point 1.b, Section I, Part D of Circular No. 122/2000/TT-BTC (including exported goods and services, construction and installation activities abroad, and export processing enterprises), there must be a detailed list of relevant documents signed and stamped by the business. The list should include:

Export declaration number and date for exported goods (in case of entrusted export, the declaration number and date of the entrusted party must be provided);

Export contract number and date or entrusted export contract number and date (for entrusted export cases);

Payment voucher number and date for exported goods and services, construction and installation activities abroad, and export processing enterprises through the Bank, specifying the form and currency of payment;

Settlement record number and date of the entrusted export contract (entrusted export processing contract) between the entrusting party and the entrusted party; quantity, value, and type of entrusted exported goods; export declaration number of the entrusted party (for entrusted export cases and cases guided at Point 1.3b, Section II, Part B of Circular No. 122/2000/TT-BTC);

Exported goods via land border, sea, air; name of importing country.

If the monthly tax declaration is complete and accurate, consistent with the summary table, the business does not need to submit the inventory list of purchased goods and services for the months applying for refund. In cases where there are adjustments to the deductible input VAT and output VAT during the refund period, the business must declare the deductible input VAT and output VAT generated each month during the refund period, and provide a clear explanation for the adjustment.

4/ Replace Point 2, Section IV, Part D of Circular No. 122/2000/TT-BTC with the new Point 2 as follows:

"2-Duties of the Tax Authority in the refund process:

a/ Receiving and registering the refund tax dossier of taxpayers. The registration department records the receipt date and promptly transfers it to the management department for processing.

b/ Conducting file review at the Tax Authority, classifying refund objects:

Reviewing the refund request files based on the content: determining the refundable cases, procedures, and documents as guided in Sections I and II, Part D of Circular No. 122/2000/TT-BTC and Points 1 and 3 of Section V of this Circular.

For businesses not eligible for refund: the Tax Authority must notify in writing and return the dossier to the business within 7 days from receiving the dossier.

For businesses eligible for refund but whose dossier is incomplete or non-compliant: the Tax Authority must notify in writing within 7 days from receiving the dossier, requiring the business to supplement the dossier according to regulations or resubmit the dossier to the Tax Authority.

c/ Check data to determine the amount of tax to be refunded:

For those subject to post-inspection tax refunds, the tax authority shall perform:

Check the refund application data against the consolidated sales tax return for VAT output, based on the allocation of deductible VAT input, the deductible VAT input arising; compare with the data from the VAT declaration form, the invoice detail sheet for goods and services purchased and sold, and the final VAT settlement report (if applicable).

In case the refund applicant's declared data is incorrect or unclear, the Tax Authority will request the entity to provide explanations along with relevant documentation.

Determine the amount of tax to be refunded.

During the process of checking data and determining the amount of tax to be refunded at the Tax Authority, if suspicious signs are found in the file or the refund applicant violates the provisions of the Law on Tax, the Tax Authority will conduct an inspection or audit at the entity before refunding the tax.

d/ Issue the Decision to Refund Tax: After checking and accurately determining the amount of tax to be refunded (including cases where the entity has been inspected or audited at the premises before refunding and concluded as eligible for tax refund), the Tax Authority issues the Decision to Refund Tax for the applicant according to Form No. 14/GTGT issued together with Circular No. 122/2000/TT-BTC."

đ/ Time limit for resolving tax refund:

For entities subject to post-inspection tax refunds: The maximum time limit for resolving the tax refund is 15 days (3 days for cases under Points 5 and 6, Section I, Part D of Circular No. 122/2000/TT-BTC) from the date of receiving all required documents.

For entities subject to pre-refund inspection or audit: The maximum time limit for resolving the tax refund is 60 days from the date of receiving all required documents."

VI. ON HANDLING VIOLATIONS

Supplement to the end of Point 3, Section I, Part E of Circular No. 122/2000/TT-BTC as follows:

"3-...

In case of discovering fraudulent behavior in tax declaration and refund during inspection or audit involving a value-added tax (VAT) fraud amounting to 5 million dong or more, the business entity will be handled as follows:

Not allowed to deduct or refund the VAT declared fraudulently;

Subject to penalties for tax fraud according to current regulations;

The Tax Authority will not resolve the tax refund for the amount claimed in the refund application; if the tax refund has already been processed, the Tax Authority must recover the refunded VAT;

The remaining VAT in the refund application, after excluding the fraudulent VAT, must be transferred to the next tax declaration period to offset the payable VAT;

Not considered for tax refund for a period of 12 months from when the Tax Authority discovers the tax fraud. After the 12-month period, if the business entity has remedied the consequences and shown good compliance with tax laws, the Tax Authority will consider processing the refund for the remaining deductible VAT input;

If the Tax Authority discovers tax fraud during regular inspections or audits at the business entity, it will be handled according to the provisions of this point;

The following actions are considered fraudulent in tax declaration and refund:

Using illegal invoices or documents, including fake printed invoices; blank invoices (no sale of goods or services); invoices given to buyers (second copy) differing from those kept by the business entity (first copy); invoices showing higher values than actual; invoices with erased entries; falsely registering purchase invoices for deductible VAT inputs; falsely registering import VAT payment documents to commit tax fraud in declaration and refund;

Selling goods or services without issuing invoices or declaring VAT;

Using invoices from other business entities to sell goods or services without declaring VAT;

Selling domestic goods but declaring them as exports to enjoy a zero percent tax rate;

Declaring VAT input for goods or services not used for business activities or for exempted goods or services to claim deductions;

Other fraudulent actions aimed at embezzling state tax revenue."

VII. INVOICE AND DOCUMENT DETAIL SHEET FOR PURCHASED GOODS AND SERVICES SOLD

Replace Invoice Detail Sheet Model No. 02/GTGT, 03/GTGT issued with Circular No. 122/2000/TT-BTC with new Invoice Detail Sheet Model No. 02/GTGT, 03/GTGT issued with this Circular. The new Invoice Detail Sheet applies for VAT declarations starting from October 2002.

VIII. IMPLEMENTATION.

This Circular takes effect from October 1, 2002.

The implementation of the 5% VAT rate for industrial concrete products as guided in Point 6, Section III of this Circular starts from September 15, 2002, without adjusting the VAT rate for transactions completed and invoiced at the 10% rate prior to that date.

Cases of tax refunds completed before October 1, 2002, shall follow the guidance provided in Circular No. 122/2000/TT-BTC (mentioned above).

Any provisions contrary to this Circular are hereby abolished. Any difficulties encountered during implementation should be reported to the Ministry of Finance for supplementary guidance./. 

 

Model No.: 02/GTGT

Invoice and Document Detail Sheet for Goods and Services Sold
(Attached to the VAT Declaration Form)

(For entities taxed under the deduction method)
(Monthly declaration)

(Month... Year 200...)

Name of Business Entity:...

Address:...

(Signature, Full Name)                                       Legal Representative of

(Signature, Full Name)                                           …on…day…month…year…

                                                                                    (Signature, Full Name)

Method of Entry:

+ Monthly sales detail sheets are opened sequentially by date.

+ Based on detailed records, the entity summarizes and prepares monthly declarations.

+ Column (5) for buyer's tax number: if the buyer does not have a tax number, draw a horizontal line (-).

+ For retail sales below the threshold requiring invoices and where the buyer does not request an invoice, the business entity bases its daily sales report on the sales summary to issue monthly VAT invoices grouped by similar items with the same tax rate, and enters the group of items listed on the invoice in column (6).

Form number: 03/GTGT

List of purchase invoices and documents for goods and services

(For entities claiming input tax deduction monthly)

Month... year 200...

 

Name of Business Entity:...

Address:...

(Signature, Full Name)                                                   Date... month... year 200...

(Signature, Full Name)                                           …on…day…month…year…

(Signature, full name)

Method of Entry:

+ Prepare the List monthly, recording in the order of purchase documents. For imported goods that have already paid VAT, record the receipt number, date, and month in the "Notes" column.

+ In cases where an entity engages in both taxable goods/services and non-taxable goods/services, based on the total VAT from the List of purchased goods/services, the entity shall calculate and allocate the input VAT to be deducted for goods/services used in the production and business activities subject to VAT according to regulations, and fill it into the monthly tax declaration form./.