Circular No. 91/2009/TT-BTC Issuing the Supplementary List of Certain Goods Subject to a 50% Reduction in the Value-Added Tax Rate According to Decision No. 16/2009/QĐ-TTg dated January 21, 2009 of the Government Prime Minister

CIRCULAR

Issuing a Supplementary List of Certain Goods Subject to a 50% Reduction in the Value-Added Tax Rate According to Decision No. 16/2009/QĐ-TTgdated January 21, 2009 of the Government Chairman

__________________________

Pursuant to the Law on Value-Added Tax No. 13/2008/QH12 dated June 3, 2008;

Pursuant to Decree No. 123/2008/NĐ-CP dated December 8, 2008 of the Government detailing and guiding the implementation of certain provisions of the Law on Value-Added Tax;

Pursuant to Decree No. 118/2008/NĐ-CP dated November 27, 2008, of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decision No. 16/2009/QĐ-TTg dated January 21, 2009 of the Government Chairman issuing certain tax measures to implement policies to stimulate investment and consumption, prevent economic downturn, and address difficulties faced by enterprises;

The Ministry of Finance hereby provides detailed supplementary guidance on the commodity codes for certain goods subject to a 50% reduction in the value-added tax rate (VAT) according to Decision No. 16/2009/QĐ-TTg as follows:

Article 1. List of Certain Goods Subject to a 50% Reduction in the VAT Rate

1. Attached hereto is a supplementary list of certain goods subject to a 50% reduction in the VAT rate issued with Circular No. 18/2009/TT-BTC dated January 30, 2009 of the Ministry of Finance guiding the implementation of a 50% reduction in the VAT rate according to the list of goods in the Preferential Import Tariff Schedule.

2. The application of a 50% reduction in the VAT rate for goods listed in the supplementary list issued with Circular No. 18/2009/TT-BTC and this supplementary list shall be uniformly applied at the importation stage, production, processing, and commercial trade stages.

3. Waste materials recovered for recycling and reuse when sold shall apply the VAT rate according to the rate applicable to that product.

For goods falling within the scope of the 50% reduction in the VAT rate as guided in Article 1 of Decision No. 16/2009/QĐ-TTg, waste materials recovered when sold also fall within the scope of the 50% reduction in the VAT rate.

Example: Recovered waste plastic when sold applies the VAT rate according to the rate applicable to plastic products, which is 10%; recovered coal slag when sold from February 1, 2009 to December 31, 2009 is subject to a 50% reduction in the VAT rate like coal.

4. Goods subject to a 50% reduction in the VAT rate are marked with an "x" in the "Goods Reduced" column in the List. For Group 84.13, water pumps with a capacity over 10 m3/h are subject to a 50% reduction in the VAT rate; water pumps with a capacity of 10 m3/h or less are not subject to a 50% reduction in the VAT rate.

5. Matters not covered by this Circular shall be implemented according to the guidance provided in Circular No. 131/2008/TT-BTC dated December 26, 2008 of the Ministry of Finance guiding the implementation of VAT according to the list of goods in the Preferential Import Tariff Schedule and Circular No. 18/2009/TT-BTC.

Article 2. Effective Date

1. This Circular takes effect from February 1, 2009 until December 31, 2009.

For consignments of goods under the list prescribed in Article 1 of this Circular imported through customs declarations registered with customs authorities from February 1, 2009: if the VAT on imported goods has not yet been paid, the importer must supplement the tax declaration form according to regulations for the customs authority to adjust the VAT rate to a 50% reduction as guided in this Circular; if the VAT on imported goods has already been paid and declared for deduction with the tax authority, it will not be adjusted again; if the VAT on imported goods has already been paid but the importer has not declared for deduction with the tax authority, the importer may choose not to adjust and declare for deduction of the entire VAT paid, or request the customs authority to confirm the excess tax payment for the tax authority to refund according to regulations.

For consignments of goods under the list prescribed in Article 1 of this Circular sold from February 1, 2009 where the seller has not reduced the VAT rate on the sales invoice:

- In case the buyer requests the seller to adjust the invoice to reduce the VAT rate by 50%, both parties must prepare a written record or agreement specifying the quantity and specifications of the goods according to the sales invoice (invoice number, date, time), the reason for adjusting the VAT rate is to comply with this Circular, and the seller must issue an adjusted invoice reflecting the reduced VAT rate. Based on the adjusted invoice, both parties must declare adjustments to the output and input VAT.

- In case the buyer does not request adjustment of the invoice to reduce the VAT rate by 50%, the seller must declare and pay VAT at the 10% rate indicated on the invoice; the buyer can declare and deduct the VAT on purchased goods at the 10% rate indicated on the invoice according to regulations.

- In case the buyer cannot be identified, the seller cannot issue an adjusted invoice reducing the VAT rate by 50% and must declare and pay VAT at the 10% rate indicated on the sales invoice.

2. During implementation, if inconsistencies in the application of the VAT rate for the same type of imported goods at the importation, production, processing, and commercial trade stages are discovered, local tax and customs authorities must report to the Ministry of Finance for research and resolution./.