Circular No. 86/2001/TT-BTC guides the refund of special consumption tax on exported cigarette sticks.

CIRCULAR

Guidelines for refunding special consumption tax already paid

on exported cigarette products

Pursuant to the provisions of Article 3, 4, and 12 of Decree No. 84/1998/NĐ-CP dated October 12, 1998, detailing the implementation of the Special Consumption Tax Law issued by the Government;

To implement the refund of special consumption tax on exported cigarette products as stipulated in Circular No. 651/CP-KTTH dated July 23, 2001, issued by the Government.

The Ministry of Finance hereby provides guidelines for the refund of special consumption tax (SCT) as follows:

1. Refund Object and Conditions

Business establishments established under the State Enterprise Law and the Enterprise Law that have registered their business operations (including enterprises established under the Private Enterprise Law and the Company Law prior to these laws) and have registered taxes, holding a business license for cigarette production, which directly export cigarette brands produced in Vietnam by foreign entities, are eligible for SCT refunds.

The amount of SCT refunded to the exporting entity is determined based on the SCT collected at the production stage from the foreign cigarette branch in Vietnam or from distributors with direct purchase contracts from the foreign cigarette branch in Vietnam.

Exporting entities must register with the local tax authority regarding the type of cigarettes (brand name) being exported, the name of the supplier selling cigarettes to the exporter, and provide complete documentation confirming the exported cigarettes according to the provisions set out below in Point 3.

2. Determination of the Amount of SCT Eligible for Refund

The amount of SCT eligible for refund is calculated based on the actual quantity of cigarettes exported each quarter.

The rate of SCT paid at the production stage is determined by the Ministry of Finance (General Department of Taxation) based on the declaration made at the production stage.

3. Documentation for Requesting SCT Refunds

Export entities of foreign-branded cigarettes produced in Vietnam, which are eligible for SCT refunds, shall submit a request for SCT refund to the provincial or centrally-administered city Tax Bureau where the enterprise's headquarters is located (using the attached form), along with the following complete documentation:

- Invoice summary for purchasing cigarettes (Form 01-BK)

- Invoice summary for exporting cigarettes (Form 02-BK)

- Inventory summary for cigarette purchases, sales, and stock (Form 03-BK)

- Business license for cigarette production

- Customs declaration forms for imported and exported goods, confirmed by customs authorities regarding the actual quantity of foreign-branded cigarettes produced in Vietnam that have been exported, in accordance with regulations of the General Department of Customs.

- Sales contract (in writing) between the exporting entity and foreign traders; Purchase contract for foreign-branded cigarettes produced in Vietnam between the exporting entity and the foreign cigarette branch in Vietnam or distributor with direct purchase contracts from the foreign cigarette branch in Vietnam, in compliance with Articles 49, 50, and 81 of the Trade Law.

- Payment documents through commercial banks in the form of letters of credit, collections, or transfers, in compliance with current regulations of the State Bank and agreements in the export contract. In cases where cash payment (freely convertible foreign currency) is permitted by the State Bank, there must be a permit from the State Bank, confirmation from the foreign party regarding the quantity of goods received and the amount paid, and proof of deposit into the exporter’s bank account.

For cases where cigarettes were exported to neighboring countries sharing borders with Vietnam before the issuance of this circular, if payments were made in cash (Vietnamese dong or the currency of the bordering country and economic zone), in compliance with State Bank regulations, confirmation from the foreign party regarding the quantity of goods received and the amount paid will also be considered valid payment documentation.

All submitted documents for SCT refunds must be original copies, except for the business license for cigarette production, customs declarations, trade contracts, and payment documents, which may be certified true copies stamped by the entity. The entity bears full responsibility under the law for all data and related documentation in the refund application.

The refund application is prepared quarterly. For cases where cigarettes were exported from January 1, 2001, to September 30, 2001, the exporting entity must submit a single refund application for the exported cigarettes to the directly managing tax authority by November 15, 2001.

4. Procedures and Authority for SCT Refunds

Upon receipt of the SCT refund application from the entity, the Tax Bureau shall verify:

+ Whether the applicant meets the criteria for SCT refunds.

+ Whether the application has been completed in accordance with regulations; if not, the entity must be requested to supplement the necessary information.

+ The quantity of cigarettes purchased, the actual quantity exported, and related invoices and documents.

Within 15 working days from the date of receiving the refund application, the Tax Bureau shall verify the application, issue a specific determination regarding the quantity of each brand of foreign-branded cigarettes produced in Vietnam that the entity has actually exported, and send this together with the refund application to the Ministry of Finance (General Department of Taxation). If the entity does not meet the conditions for SCT refunds, the Tax Bureau must notify the entity in writing.

Within 10 working days from the date of receiving the refund application sent by the Tax Bureau, the General Department of Taxation shall verify and determine the amount of SCT eligible for refund, which will then be decided by the Ministry of Finance for SCT refunds to the entity (using the attached form).

The refunded SCT for the export of foreign-branded cigarettes produced in Vietnam must be included in the entity's income to calculate taxable corporate income tax.

5. Effective Implementation Period

The refund of excise tax pursuant to the guidance provided in this Circular shall apply to branded cigarettes with foreign registered trademarks produced in Vietnam for export from January 1, 2001.