Circular No. 83/2014/TT-BTC guiding the implementation of value-added tax according to the List of Imported Goods of Vietnam.

CIRCULAR

Guidelines for implementing value-added tax according to

 The List of Imported Goods in Vietnam

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Pursuant to the Law on Value-Added Tax No. 13/2008/QH12 dated June 3, 2008 and the Law Amending and Supplementing Certain Provisions of the Law on Value-Added Tax No. 31/2013/QH13 dated June 19, 2013;

Pursuant to the Government Decree No. 209/2013/NĐ-CP dated December 18, 2013 detailing and guiding the implementation of certain provisions of the Law on Value-Added Tax;

Pursuant to the Government Decree No. 06/2003/NĐ-CP dated January 22, 2003 regarding the classification of export and import goods;

Pursuant to Decree No. 215/2013/NĐ-CP dated December 23, 2013 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

At the proposal of the Director of the Tax Policy Department;

The Minister of Finance issues this Circular guiding the implementation of value-added tax according to the List of Imported Goods in Vietnam.

Article 1. Scope of Regulation

This Circular guides the application of the rate of value-added tax for imported goods, production, business, and consumption in Vietnam according to the List of Imported Goods in Vietnam.

Article 2. Applicability

1. Organizations and individuals importing, producing, and trading goods subject to value-added tax;

2. Tax administration agencies and other related organizations and individuals.

Article 3. Value-Added Tax Tariff Schedule

The Value-Added Tax Tariff Schedule issued together with this Circular includes:

1. The detailed list of the Value-Added Tax Tariff Schedule according to the eight-digit commodity code, describing goods according to the List of Export and Import Goods in Vietnam issued together with Circular No. 156/2011/TT-BTC dated November 14, 2011 of the Ministry of Finance, and further specifying the "Special" section with descriptions of the characteristics of goods in accordance with the name of goods that are not subject to value-added tax or are subject to value-added tax as prescribed in the Law on Value-Added Tax, the Law Amending and Supplementing Certain Provisions of the Law on Value-Added Tax (hereinafter referred to as the Law on Value-Added Tax) and guiding legal documents for the implementation of the Law on Value-Added Tax.

2. Rate of value-added tax

a) The symbol (*) in the tariff column of the Value-Added Tax Tariff Schedule applies to goods that are not subject to value-added tax.

Example: Purebred horses for breeding (commodity code 0101.21.00); Vehicles for disabled persons (commodity codes 8713.10.00 and 8713.90.00) marked with (*) in the tariff column means that these three commodity codes are goods not subject to value-added tax.

b) The symbol (5) in the tariff column of the Value-Added Tax Tariff Schedule applies to goods subject to a unified rate of 5% value-added tax at the import, production, processing, or commercial trade stages (including cases where enterprises or cooperatives pay value-added tax under the deduction method when selling raw rubber, rosin, or cotton to enterprises or cooperatives at the commercial trade stage).

Example: Raw natural rubber (group 40.01) marked with (5) in the tariff column means that this good is subject to a unified rate of 5% value-added tax at the import, production, or commercial trade stages. In the case where enterprises or cooperatives pay value-added tax under the deduction method when selling processed rubber at the commercial trade stage, it still falls under the category of applying a 5% value-added tax rate.

c) The symbol (*,5) in the tariff column of the Value-Added Tax Tariff Schedule applies to goods that are not subject to value-added tax at the self-production, sale, or import stages but are subject to a 5% rate of value-added tax at the commercial trade stage, except for cases specified in point b, Clause 3, Article 4 of this Circular.

d) The symbol (10) in the tariff column of the Value-Added Tax Tariff Schedule applies to goods subject to a unified rate of 10% value-added tax at the import, production, processing, or commercial trade stages.

Example: Bathtubs (commodity code 3922.10.10) marked with (10) in the tariff column means that this good is subject to a 10% value-added tax rate at the import stage and also applies a 10% value-added tax rate at the production, processing, or commercial trade stages.

e) The symbol (*,10) in the tariff column of the Value-Added Tax Tariff Schedule applies to gold bars or sheets imported without being crafted into artistic products, jewelry, or other products (group 71.08), which are not subject to value-added tax at the import stage but must be subject to value-added tax at the production, processing, or commercial trade stages with a rate of 10%.

Article 4. General Guidelines for Applying VAT Rates According to the List of VAT Tariff

1. In cases where goods are specifically defined as not being subject to VAT or applying a VAT rate of 5% or 10% according to the Law on Value Added Tax and guiding legal documents implementing the Law on Value Added Tax, such provisions shall be implemented in accordance with those documents. However, agricultural products, livestock products, aquatic products, seafood; specialized medical equipment shall be implemented in accordance with the provisions of Clause 3, 4, 5 of Article 4 of this Circular.

Example: If the VAT tariff list specifies that the VAT rate for group 87.05 "Motor vehicles specially designed for particular uses other than carrying passengers or goods (for example, fire engines, cranes, ambulances, concrete mixers, street sweepers, irrigation trucks, mobile X-ray units)" is 10%, then all imported goods belonging to group 87.05 will apply a VAT rate of 10%. However, if certain items within group 87.05 are determined to be specialized equipment serving national defense and security according to Clause 18, Article 5 of the Law on Value Added Tax, they will be exempt from VAT.

2. The VAT rate specified for each eight-digit code applies to goods under that code, except for goods listed by name in the "Specific" section of four-digit groups, which apply the VAT rate specified in the "Specific" section.

Example: Goods under code 9017.20.10, "Measuring instruments," apply a VAT rate of 10%, but "Measuring instruments for teaching and learning" under group 90.17 apply a VAT rate of 5% as specified in the "Specific" section of group 90.17.

3. The VAT rate applicable to agricultural products (plant products, products derived from plants); livestock products (livestock products, products derived from livestock, including internal organs and other by-products obtained after slaughtering animals); forest products, aquatic products, seafood (of natural origin and cultivated) in Chapters 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 18 of the VAT Tariff issued together with this Circular shall be implemented as follows:

a) In cases where these products have not been processed into other products or only undergo simple processing, including products: newly cleaned, dried, shelled, stripped, cut, ground (except ground products under Chapters 9, 10, 11, 12 of the VAT Tariff issued together with this Circular), chopped, peeled, ground, husked, crushed, polished, glued, sealed in air-tight containers, or preserved in common ways such as refrigeration (chilled, frozen), sulfur fumigation, chemical preservation to prevent spoilage, salt preservation (salted, brined), preservation in sulfuric acid solution or other preservative solutions, or other common preservation methods, shall be implemented at the specific VAT rate (*) 5% specified in the VAT Tariff issued together with this Circular, except for cases specified in point b of this clause.

b) The VAT rate applicable to agricultural products, livestock products, aquatic products, seafood that have not been processed into other products or only undergone simple processing, fresh food, at the trading stage shall be as follows:

b.1) Enterprises and cooperatives paying VAT through the deduction method selling agricultural products, livestock products, aquatic products, seafood that have not been processed into other products or only undergone simple processing, fresh food to enterprises and cooperatives at the trading stage do not need to declare and pay VAT. On the VAT invoice, the sales price line should be recorded as the price without VAT, the tax rate and VAT lines should not be filled in and should be crossed out.

Example: Raw shrimp (cleaned, whole or headless, peeled, gutted, deveined, flattened, packed in trays, vacuum-sealed, frozen); fresh squid (cleaned, sorted, cut into pieces, packed in molds, frozen); fish fillets; frozen shrimp and fish; cashew nuts (dried, sieved, steamed, shelled, roasted, peeled, fumigated); rice (paddy) milled to produce white rice, polished rice; by-products and waste products of agricultural products, livestock products, aquatic products, seafood such as bran, husk, feed, shrimp heads and shells, fish heads and bones, internal organs and other by-products obtained after slaughtering animals, fresh fat are all products that have not been processed into other products or only undergone simple processing and do not need to be declared and pay VAT at the trading stage.

b.2) Households, individuals engaged in business, enterprises, cooperatives, and other economic organizations paying VAT through the direct calculation method on added value when selling agricultural products, livestock products, aquatic products, seafood that have not been processed into other products or only undergone simple processing, fresh food at the trading stage shall declare and pay VAT at a rate of 1% on turnover.

Example: Company B is a business entity paying VAT through the deduction method importing or purchasing rice directly from organizations and individuals who grow it for sale. Therefore, rice at the import or purchase stage from organizations and individuals who grow it for sale does not fall under the category of goods subject to VAT.

When Company B sells rice to Company C, Company B does not need to declare and pay VAT on the amount of rice sold to Company C.

When Company B sells rice to Company D (a company producing rice noodles and rice vermicelli), Company B does not need to declare and pay VAT on the amount of rice sold to Company D.

On the VAT invoice issued and handed over to Company C, Company D, and Company B, clearly record the sales price as the price without VAT, the tax rate and VAT lines should not be filled in and should be crossed out.

When Company B directly sells rice to consumers, it declares and pays value-added tax at a rate of 5%.

c) In cases not being products that have undergone simple processing as mentioned in point a of this clause, they shall be determined as processed products and subject to a unified value-added tax rate of 10% at the importation, production, processing, or commercial trading stages.

4. Agricultural products, livestock products, aquatic products, marine products that have not been processed into other products or only undergone simple processing by organizations and individuals for self-production and sale, and at the importation stage used as feed for livestock, poultry, and other animals (collectively referred to as animal feed) are exempt from value-added tax according to the provisions of Clause 1, Article 5 of the Law on Value-Added Tax.

Example: Rice, corn, cassava, wheat that have not been processed (including those used as animal feed) produced and sold by organizations and individuals, and at the importation stage are exempt from value-added tax (the 5% value-added tax rate is not applied at all stages as with other animal feeds).

Medical equipment and tools include specialized machines and tools for medical purposes such as various types of diagnostic, imaging, and radiographic equipment used for diagnosis and treatment; specialized surgical and wound treatment equipment, ambulances; blood pressure, heart, and pulse measuring devices, blood transfusion devices; syringe pumps; contraceptive devices; other specialized medical equipment and tools shall be implemented according to the Value-Added Tax Tariff issued together with this Circular.

State-owned enterprises that have been assigned by the Ministry of Agriculture and Rural Development to conduct offshore wind power project surveys before the effective date of this Circular shall continue to implement according to the assigned documents; any new matters arising after the effective date of this Circular shall be implemented in accordance with the provisions of this Circular.

1. This Circular takes effect from August 10, 2014.

2. This Circular replaces Circular No. 131/2008/TT-BTC dated December 26, 2008 of the Ministry of Finance guiding the implementation of the tariff rates of the Import Tariff Schedule; Circular No. 74/2009/TT-BTC dated April 13, 2009 of the Ministry of Finance amending Circular No. 131/2008/TT-BTC; Circular No. 84/2009/TT-BTC dated April 28, 2009 of the Ministry of Finance amending Circular No. 131/2008/TT-BTC;

3. In cases where there are difficulties or inconsistencies in the application of value-added tax for the same type of imported goods and domestically produced, traded, and consumed goods, when declaring and calculating value-added tax at the importation stage, the provisions of this Circular shall be followed, while organizations, individuals, tax authorities, and customs authorities should promptly report to the Ministry of Finance to unify guidance on implementation./.