I. The draft law on Value added tax
Issued by: Ministry of Finance
According to the submission of the draft law, the amended Draft Law on Value Added Tax (Draft) consists of 4 chapters, 16 articles, amending and supplementing the contents specified in 10 Articles of the current Law on Value Added Tax (VAT). Some notable changes in the draft are as follows:
Regarding non-taxable subjects: amending the regulation "goods and services of business households and individuals with an annual turnover of VND 100 million or less" to "goods and services of business households and individuals with annual turnover below the level prescribed by the Government" are not subject to VAT.
Proposing to transfer some groups of goods and services to VAT subjects to comply with international practices and avoid the effect of increasing costs, reducing complications for enterprises when both providing taxable goods and services and providing non-taxable goods and services.
Supplementing a number of groups of goods and services to non-VAT subjects such as, assets of organizations or individuals that are not doing business, not being VAT payers; national reserves sold by the National Reserve Authority; charges and charges in accordance with the law on fees and charges; public passenger transportation by tran, inland waterway vehicles...
Group of non-taxable goods and services: The draft Law removed 12 types of goods and services subject to non-VAT.
Regarding taxable prices: Supplementing regulations on the determination of deductible land prices when determining taxable prices for real estate business activities, taxable prices for specific production and business activities.
Regulations on subjects applying the 0% tax rate: Supplemented 3 groups of goods that are not allowed to apply the 0% tax rate to legislate regulations that are being implemented stably in documents under the Law. Specifically, cigarettes, alcohol, beer imported and then exported; gasoline and oil purchased domestically sold to businesses in the non-tariff zone; cars sold to organizations and individuals in the non-tariff zone; goods supplied to individuals not registered for business in the non-tariff zone.
Supplementing regulations that the tax rate of 0% cannot be applied to products and services provided on digital platforms.
Goods and services subject to the 5% tax rate: The Draft removed 3 groups of goods and services (fresh food, unprocessed forest products; sugar, by-products in sugar production, including sugar rust, bagasse, sludge; cultural activities, exhibition activities, physical training, sports, art performances, film production, import, distribution and screening) and 2 types of goods (preliminarily processed turpentine; types of equipment, specialized instruments for teaching, research, scientific experiments).
According to the agenda, the Law on Value Added Tax (amended) will be submitted to the National Assembly at its 7th session next May.
II. Circular No.06/2024/TT-BTC regulating the import of rice and dried tobacco leaf orginating from the Kingdom of Cambodia under tariff quotes in 2023 and 2024
Issued by: Ministry of Industry and Trade. Issued date: 04 April 2024
Effective date: 20 May 2024. Expiry date: 31 December 2024
On 04 April 2024, the Minister of Industry and Trade issued Circular No. 06/2024/TT-BCT regulating the import of rice and dried tobacco leaves originating from the Kingdom of Cambodia according to the 2023 tariff quota. and 2024. The circular stipulates:
(1) Import tariff quota amount for rice and dried tobacco leaves from Cambodia in 2023, 2024
Commodity codes and total tariff quota amounts of rice and dried tobacco leaves originating from the Kingdom of Cambodia are specified in Appendix II issued with Decree No.05/2024/ND-CP.
The 2023 import tariff quota is applied to declarations registered with customs authorities from 02 June 2023 to 31 December 2023.
The 2024 import tariff quota is applied to declarations registered with customs authorities from 01 January 2024 to 31 December 2024.
(2) Applying special preferential import tax rates for rice and dried tobacco leaves from Cambodia in 2023 and 2024
Special preferential import tax rates as prescribed in Decree No. 05/2024/ND-CP.
For dried tobacco leaves, traders are granted import licenses by the Ministry of Industry and Trade according to tariff quotas as prescribed in Decree No.69/2018/ND-CP and Circular No. 12/2018/TT-BCT; The imported quantity is deducted from the import tariff quota according to the License issued by the Ministry of Industry and Trade.
III. Circular No.25/2024/TT-BTC abolishes circular No.83/2014/TT-BTC dated 26 June 2014, by The Minister of Finance, whichs provides guidance on the implementation of Value-added tax (VAT) arcording to the Vietnam imported goods classification table
Issued by: Ministry of Finance
Issued date: 23 April 2024. Effective date: 08 June 2024
The issuance of Circular No. 83/2014/TT-BTC was intended to clarify the VAT rates defined in the VAT law based on HS codes to provide customs authorities and taxpayers with additional references for determining VAT rates. However, since the issuance of Circular No. 83/2014/TT-BTC, VAT laws have been amended several times, leading to many provisions in Circular No. 83/2014/TT-BTC becoming outdated. The implementation of Circular No. 83/2014/TT-BTC has encountered many obstacles and inconsistencies, primarily due to the differences between the basis for determining VAT rates under VAT law and Circular No. 83/2014/TT-BTC.
Therefore, Circular No. 25/2024/TT-BTC has entirely abolished Circular No. 83/2014/TT-BTC's guidance on VAT according to the Vietnam Imported Goods Classification Table, facilitating customs authorities and businesses in the process of implementation.
Currently, the application of VAT rates for imported goods, as well as the determination of goods subject to VAT exemption, is specifically regulated in the VAT Law and in Government decrees, along with Ministry of Finance circulars guiding the implementation of the VAT Law.
IV. Official letter No.1570/TCHQ-TXNK on the Value-added tax
Issued by: General Department of Customs. Issued date: 12 April 2024
In response to Binh Duong provincial Customs Department the issue of value-added tax (VAT) for goods that have been exempted from import duty and then changed to the purpose of use, the General Department of Customs has some opinions as follows:
According to clause 2 Article 7 of Circular No. 219/2013/TT-BTC and Decree No. 209/2013/NĐ-CP specifying and providing guidelines for implementation of several articles of the Law on Value-Added Tax, in case, enterprise that has paid VAT based on “the prices at the border checkpoint” but has not paid VAT based on “import tax” due to the exemption of import duty, now due to the change in the purpose use arising “import duty” must pay VAT based on “import duty” according to the regulations of Law on Value-Added Tax and implementation guiding documents.
V. Official letter No.2578/BTC-TCHQ on import duties refund
Issued by: Ministry of Finance
Issued date: 14 March 2024
In response to several questions of import duties refund, Ministry of Finance has some opinions as follows:
1. Regarding the application of tax policy on imported goods
- Pursuant to Article 16 of Law on Export and Import Duties No.107/2016/QH13 stipulating duties exemption on:
"... 6. Imported raw materials, supplies, components serving processing of exports; finished products imported to be fixed on processed products; outward processing products.
Regarding outward processing products derived from domestic raw materials that subject to export duties, the amount of domestic raw materials incorporated into the products shall be taxed.
Goods exported for processing and then imported are exempt from export duty and import duty on the value of exported raw materials incorporated into the processed products…
7. Materials, supplies, components imported for manufacture of exports. products.”
- Pursuant to point d clause 1 Article 11 of Decree No. 134/2016/NĐ-CP stipulating:
"When products that are processed overseas are imported into Vietnam, import duties on the value of raw materials, supplies and components incorporated into the processed products shall be exempt; the remaining value of the products shall be dutiable at the import duty rates applied to processed imports.”
2. Regarding import duties refund
- Pursuant to point d clause 1 Article 19 of Law on Export and Import Duties No. 107/2016/QH13 stipulating duty refund in case: “Any taxpayer who has paid tax on goods imported to serve manufacture or business operation and they have been used for manufacture of exports and the products are already exported“.
- Pursuant to clause 2 Article 36 of Decree No. 134/2016/NĐ-CP dated 01 September 2016 of the Government stipulating that goods entitled to import duties refund include:
“a) Raw materials, supplies (including those for manufacture of packages of exports), components, semi-finished products imported incorporated into the exports or used during the manufacture of exports without being incorporated into the exports;
b) Imported finished products that are attached on exports or packed with exports as a whole;
c) Components and parts imported for repair of exports under warranty.”
Pursuant to the above regulations, in cases, a domestic enterprise that imports raw materials for production, then sends these materials for processing at an export processing enterprise and receives back semi-finished products to continue manufacture to export must pay import duty as prescribed.
Products or semi-finished products processed at an export processing enterprise when imported back to Vietnam to continue producing export products are not subject to tax refund as prescribed at point d, Article 19 of the Law on Export and Import Duties No. 107/2016/QH13 and Article 36 of Decree No. 134/2016/NĐ-CP
Thus, the Law on Export and Import Duties No. 107/2016/QH13 and guiding documents do not stipulate import duty refund for enterprises that have paid import duty on the added value when importing products for processing from the non-tariff zone and then continue to produce and export products abroad.
VI. Official letter No.245/TTg-KTTH on boosting digital transformation in the customs field
Issued by: Prime Minister
Issued date: 17 April 2024
In order to boost and further improve the efficiency of digital transformation in the customs field, the Prime Minister requested the Ministry of Finance and the General Department of Customs to implement a number of contents, including:
Reviewing and completing legal policies, upgrading information technology systems in the direction of digitizing documents in customs dossiers, moving towards paperless in carrying out customs procedures for imported and exported goods; means of transport exiting and entering, gradually ending the requirement for customs declarants to submit paper documents belonging to the customs dossier when carrying out customs procedures. ……
Thus, boosting digital transformation in the field of Customs will facilitate trade and tourism activities, create a transparent and fair import and export environment, contributing to improving national competitiveness, preventing smuggling, trade fraud and illegal transportation of goods across borders.
VII. Official letter No.1336/TCT-TTKT on strengthening tax management for purchase of goods in the form of detailed list
Issued by: General Department of Taxation
Issued date: 02 April 2024
Issued by: General Department of Taxation Issued date: 02 April 2024
At point 2.2, Section II Inspection Conclusion No. 966/KL-TTCP dated 20 September 2022 of the Government Inspectorate at Saigon Tobacco Company (page 13 Inspection Conclusion) has the following content:
“During the period from 2013 - 2017, Ben Tre Tobacco Company, Hoa Viet Joint Stock Company, An Giang Tobacco Company, Dong Thap Tobacco Company, Cuu Long Tobacco Company were member companies of Saigon Tobacco Company has a number of contracts to purchase tobacco ingredients from private enterprise Tuan Dung (Binh Loi village, Hao Duoc commune, Chau Thanh district, Tay Ninh province).
The profile provided by private enterprise Tuan Dung shows a number of tobacco ingredients purchased directly from tobacco growers in Tay Ninh province (making a List of purchased goods without invoices).
The results of verifying the purchase of tobacco raw materials by private enterprise Tuan Dung showed that many people whose names were on the list of purchases of tobacco raw materials from growers, but in fact they did not grow or sell tobacco raw materials to private enterprise Tuan Dung. ”
The Government Inspectorate's recommendation at Point 1, Section IV (page 34 Inspection Conclusion) is as follows: "The Ministry of Finance directs the General Department of Taxation to inspect tax declaration and payment for cases of purchasing medicinal ingredients leaves of farmer households are made in the form of a List to determine the appropriate CIT price; Re-determination of corporate income tax for private enterprise Tuan Dung due to inappropriate list of tobacco raw material purchases.”
Based on the inspection results and recommendations of the Government Inspectorate, the General Department of Taxation recommends that the Tax Departments:
Tay Ninh Provincial Tax Department checks the declaration of private enterprise Tuan Dung.
Tax Departments in tax inspection and examination work should strengthen verification of cases of purchasing goods and services in the form of Lists to determine reasonableness, legality... as a basis for determining costs. Deductible when calculating corporate income tax reasonably and in accordance with regulations, avoiding loss of state budget revenue. Note for businesses that commit violations such as private enterprise Tuan Dung.
In case through inspection, examination and verification, if enterprises are found to have violated tax laws, they will be handled according to regulations; If there are signs of crime, the file will be transferred to the authorities for handling according to the provisions of law.
VIII. Official letter No.1357/TCT-DNNCN on review of tax management for business household and business individuals
Issued by: General Department of Taxation
Issued date: 02 April 2024
In order to continue to strengthen tax management for business households and individual businesses, the General Department of Taxation requests the Directors of Tax Departments of provinces and centrally-run cities to direct the Note the following:
(1) Regarding propaganda work to support taxpayers
Strengthen propaganda and support taxpayers in implementing tax policies and laws for business households and business employees.
(2) Regarding the management of business households and individual businesses
Organize a review of all tax management records for business and credit employees in the management area; comparisons and reviews in the management area to grasp the changing situation of business activities of business households and business employees and promptly put them into management according to regulations;
Compare with information sources of relevant state agencies;
Provide the business registration agency with information about businesses and business establishments that have registered businesses but are no longer doing business at the business registration address so that the business registration agency can carry out management according to regulations;
Publicize information about business households and business employees paying presumptive tax according to regulations, and at the same time publicize on the Map function the number of business households;
(3) Regarding inspection and supervision
Organize regular reviews and surveys of revenue and flat tax rates, compare the private database, the input invoice database of contracted households and the actual business situation in the area;
Direct the Tax Departments to conduct periodic and planned inspections at tax authority headquarters on the database of business households, business employees and related organizations. For high-risk cases with signs of violation, inspections should be carried out at the taxpayer's headquarters to promptly detect and prevent violations of tax laws and tax administration.
(4) Regarding consulting work with local authorities
Advise the People's Committees of provinces and cities to direct relevant state agencies (Business registration, Statistics, Finance, Banking, Industry and Trade, Market Management, Police, Media Information,... ) coordinate with tax authorities to regularly compare and review in the area to understand the changing situation of business activities of business households and business employees to serve tax management according to regulations.
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