Chương I Thông tư 06/2012/TT-BTC: Quy định chung

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Circular prescribes the taxable objects, non-taxable objects, tax payers, foundation and methods to calculate, deduct and refund Value-added tax.

Article 2. Taxable objects

Objects of Value-added tax (VAT) means goods, services serving production, business and consumption in Vietnam (including goods, services purchased from overseas organizations, individuals, except for VAT non-taxable objects guided in Article 4 of this Circular.

Article 3. Tax payers

VAT payers are organizations, individuals producing, trading VAT taxable goods, services in Vietnam, regardless of lines, forms, business organizations (hereinafter referred to as business establishments) and organizations, individuals importing goods, purchasing services from foreign countries subject to VAT (hereinafter referred to as importers) including:

1. Business organizations established and registered business under the Law on Enterprises, the Law on State-owned Enterprises (now the Law on Enterprises), the Law on Cooperatives;

2. Economical organizations of political organizations, socio-political organizations, social organizations, socio-professional organizations, People’s armed force units, non-business organizations and other organizations;

3. Foreign-owned enterprises and the foreign parties participating in business cooperation under the Law on Foreign Investment in Vietnam (now the Law on Investment); foreign organizations, individuals conducting business in Vietnam but not establishing legal entities in Vietnam;

4. Individuals, households, individuals conducting independent business and other subjects conducting production, business, import.

5. Organizations, individuals conducting business and production in Vietnam purchasing services (including purchasing services attached to goods) from foreign organizations without permanent establishments in Vietnam, individuals living overseas being non-residents of Vietnam, the organizations, individuals purchasing services are the tax payers.

Provisions on permanent establishments and non-residents are implemented in accordance with law on enterprise income tax and law on personal income tax.

Article 4. Objects not subject to VAT

1. Products from cultivation (including products from cultivated forest), breeding, aquatic/maritime products that have not been processed into other products or have just been through preliminary raw process by organizations, individuals producing, catching to sell at the importation stage.

Products having just been through preliminary raw process mean products having just been cleaned, dried, peeled, husked, cut, salted, frozen and by other usual means of preservation.

Example 1: dry, peel, husk, cut products from cultivated products; clean, dry, salt, freeze other aquatic/maritime products.

2. Products being animal breeds, plant breeds, include breeding eggs, breeding animals, breeding plants, seeds, breeding branches, breeding tubers, semen, embryos, genetic materials from cultivations, importations, and commercial business. Animal breeds, plant breeds which are not subject to VAT are products of importers, commercial establishments having animal breeds, plant breeds business registration certificate issued by State management agencies. For products being animal breeds, plant breeds subject to promulgation of standards, quality by the State must satisfy the conditions prescribed by the State.

3. Irrigation and drainage, ploughing and harrowing, dredging in-field channels and canals serving agricultural production; agricultural product harvesting services.

4. Salt products made of sea water, salt from natural mines, refined salt, iodized salt that the main composition is NaCl.

5. State-owned residential houses sold by the State to the tenants.

6. Land use right transfer.

7. Insurances including: life insurance; health insurance, accident insurance for humans, student insurance and insurance services relating to humans: domestic animal insurance, plant insurance and other agricultural insurance services; reinsurance.

8. Financial activities

a) Credit provision services supplied by credit institutions including:

- Loans

- Discounts, rediscounts of transferring instruments and other valuable documents;

- Banking guarantee;

- Financial loans

- Credit card issue;

- Domestic factoring, international factoring regarding banks licensed for international payments;

- Other form of credit provisions as prescribed by law.

Assets for loan security of VAT payers or for transferring ownership rights to lenders are subject to VAT as sold except for VAT non-taxable goods prescribed in Article 4 of this Circular.

Example 2: LLC A mortgages its lines, machinery, equipment to take capital loans at  the bank B. As the loan term is due under the credit contract and LLC A fails to pay debts, bank B shall sell the loan security assets (regardless of the asset ownership rights are transferred to bank B or not) to retrieve debts, such assets are subject to VAT.

b) Securities trade including: brokerage, securities sole trade, securities issue underwriting, securities investment consultancy, securities depository, securities investment fund management, securities investment company management, securities investment portfolio management, market organizing services of establishments or centers of securities trading, services relating to securities registered, deposited at Vietnam Securities Depository Center, loans for deposit transaction, advance payments of securities sale and other services as prescribed by the Ministry of Finance.

Activities of information provision, auction of shares of issuing organizations, technical support for online securities transaction of the Stock Exchanges.

c) Capital transfer including transfer of partial or complete invested capital, including sale of the enterprise to another enterprise to conduct production, business; transfer of securities and other forms of capital transfer as prescribed by law.

d) Debt sale

đ) Foreign currency trading

e) Derivative financial services including interest swap, term contract, future contract, foreign currency call, put options and other derivative financial services as prescribed by law.

9. Health care and veterinary services, including medical examination, treatment, prevention for humans or domestic animal, birth control, heath care, rehabilitation services for patients, 

Medical services include patient transport, sick-room, sick-bed renting of medical establishments; testing, irradiating, radio-graphing, blood and blood products for patients.

For medical treatment service packs (prescribed by the Ministry of Health) including use of medicines, the revenues from medicines in the service pack are not subject to VAT.

10. Public post/telecommunications and universal Internet services under the Government’s programs; post/telecommunications services supplied from foreign countries to Vietnam (incoming direction).

11. Public services of streets and residential area hygiene, drainage; maintenance of zoos, flower gardens, parks, urban trees and plants, public lighting; funeral services. Services specified in this point regardless of funding sources. In particular:

a) Public services of streets and residential area hygiene, drainage provided for organizations, individuals including collecting, disposing, transport, processing trash and waste; drainage, wastewater processing; pumping, transporting and processing sludge, cesspool; unclogging sanitation, drainage system, cleaning public restrooms, maintaining hygiene in portable restrooms, collecting, transporting and processing other wastes.

For business establishments providing services such as office cleaning, house cleaning, such services are subject to VAT.

Example 3: If LLC B providing office cleaning services for unit C, corridor and staircase cleaning services for apartment building H, such services are subject to VAT.

b) Maintaining zoos, flower gardens, parks, urban plants and trees including managing, planting, cultivating plants and trees, protecting birds and animals in parks, zoos, public areas, National forests, National gardens.

c) Public lighting including lighting of streets, alleys in residential areas, flower gardens, parks.

d) Funeral services from establishments conducting funeral services including leasing funeral homes, cars serving funerals, burial, cremation, exhumation.

12. Maintenance, repairs and constructions from people’s contributions, humanitarian aids regarding cultural, artistic constructions, public service works, infrastructure, residential houses for subjects under preferential social policies.

For other capital sources apart from people’s contributions (including contributions and sponsorships from organizations, individuals), humanitarian aids that the other capital sources do not exceed 50% the total capital for the construction, the non-taxable object is the entire value of the construction.

Those subject to social policies includes: creditable individuals as prescribed by law on creditable individuals; social protection beneficiaries gaining pensions from the State budget; individuals of poor/semi-poor households and other cases as prescribed by law.

13. Teaching, vocational training as prescribed by law including foreign languages, information technology, dancing, singing, painting, music, circus, sport, physical exercises; children nursing and teaching, and other occupation aiming to train, develop and improve cultural standard and professional knowledge.

For educational establishments at all levels from pre-school to high school that collect student transport, meal fees and other revenues in forms of authorized collection/spending of student transport, meal, such collection/spending amounts are not subject to VAT.

Boarding revenues of pupils, students; revenues from training activities (including the organization of examinations and certificate issue during the training process) provided by training establishments are not subject to VAT For provision of certificate issue and examination services not attached to training, such services are subject to VAT.

14. Radio and television broadcasting using State budget funds.

15. Publishing, importing, issuing newspapers, magazines, professional news, political books, textbooks, teaching materials, legal document books, technical/scientific books, books printed in ethnic languages, pictures, photographs, posters of propagation including audio/graphic tapes/disks, electronic data; money printing.

Professional newspapers, magazines, news, including transmission of professional newspapers, magazines, news.

Political books are books that propagate the political line of the Party and the State serving political tasks by subjects, topics, serving anniversaries, traditional days of organizations, levels, branches, localities; books collecting and propagating “Good people, good deeds” movement; books containing speeches, theoretical researches of the Party and the State leaders.

Textbooks means books for teaching and learning at all levels from pre-school to high school (including referential books for teacher and students in accordance with the educational program)

Teaching materials are books for teaching and learning in universities, colleges, professional and vocational high schools.

Legal documents books are books containing the State’s legal documents.

Technical-scientific books are books for introducing, guiding technical-scientific knowledge directly relating to production and lines of science and engineering.

Books printed in languages of ethnic minority including bilingual text books in national language and the ethnic minority language.

Pictures, photographs, poster of propagation including pictures, photographs, poster, fliers, leaflets serving propagation, mottos, slogan, leaders’ pictures, Party’s flags, National Flags, Union’s flags, Team’s flags.

16. Public passenger transport by bus, tram are public passenger transport by bus, tram by intra-provincial, intra-city routes and peripheral outer-provincial routes as prescribed by the Ministry of Transport.

17. Goods which have not been yet produced domestically are imported in the following cases:

a) Machinery, equipment, materials imported to directly use for science research and technology development;

b) Machinery, equipment, spare parts, means of specialized transport and materials need to be imported for petroleum mine exploration and development.

c) Airplanes (including airplane engines), drilling rigs, ship which have not been yet produced domestically are imported to compose fixed assets of enterprises, rented from foreigners to use for production, trading including import for lease.

To be determined as goods which are not subject to VAT at the importation stage prescribed in this clause, importers must present dossiers to customs agencies under the Ministry of Finance’s guidance on customs procedures; customs inspection and supervision; export/import duties and tax administration for exported/imported goods.

The list of machinery, equipment, materials able to be produced domestically as the basis for differentiating from those which have not been yet produced domestically and need to be imported to directly use for science research and technology development; The list of machinery, equipment, spare parts, means of specialized transport and materials able to be produced domestically as the basis for differentiating from those which have not been yet produced domestically and need to be imported for petroleum mine exploration and development; the list of airplanes, drilling rigs, ships able to be produced domestically as the basis for differentiating from those which have not been yet produced domestically and need to be imported to compose fixed assets of enterprises, rented from foreigners to use for production, business and lease are promulgated by the Department of Planning and Investment.

18. Weapons, specialized military equipment serving National defense and security

a) Weapons, specialized military equipment serving National defense and security under the List of weapons, specialized military equipment serving National defense and security uniformly promulgated by the Ministry of Finance, the Ministry of National Defense and the Ministry of Public Security.

Weapons, specialized military equipment serving National defense and security which are not subject to VAT must be complete or uniform products, or parts, components, package specialized to assemble and preserve the complete products. For weapons, specialized military equipment serving National defense and security required to repair, the services of repairing weapons, military equipment performed by enterprises of the Ministry of National Defense, the Ministry of Public Security are not subject to VAT.

b) Imported weapons, specialized military equipment (including materials, machinery, equipment, spare parts) serving National defense and security are exempted from import duty as prescribed by the Law on Export, Import duties or import under annual quota approved by the Prime Minister.

Dossiers, procedures regarding weapons, military equipment not subject to VAT at the importation stage are made in accordance with guidance of the Ministry of Finance on customs procedures; customs inspection and supervision; Export, Import duties and tax administration regarding exported, imported goods.

19. Imported goods and goods, services being sold to organizations, individuals for humanitarian aids, non-refundable aids in the following cases:

a) Goods imported in case of humanitarian aids, non-refundable aids and verified by the Ministry of Finance;

b) Gifts for state agencies, political organizations, socio-political organizations, socio-political-professional organizations, social organizations, socio-professional organizations, People’s armed force units as prescribed by law provisions on presents and gifts;

c) Presents, gifts given to individuals in Vietnam as prescribed by law provisions on presents and gifts;

d) Personal belongings of foreign organizations, individuals under diplomatic immunity regulations as prescribed by law on diplomatic immunity; goods being belongings of Vietnam citizens residing overseas being brought along when coming back home.

đ) Hand-luggage under duty-free luggage regulations;

The quota of imported goods not subject to VAT at the importation stage is under the quota of import duty exemption prescribed in the Law on export and import Duties and other documents guiding the implementation.

Imported goods by organizations, individuals under diplomatic immunity as prescribed in the Ordinance on diplomatic immunity are not subject to VAT. Subjects under diplomatic immunity purchasing VAT-inclusive goods, services in Vietnam shall be refunded tax as guided in clause 7 Article 18 of this Circular.

Subject, goods, procedures for enjoying VAT exemption guided in this Article are implemented as guided by the Ministry of Finance on VAT refund regarding diplomatic representative agencies, consulates and representative agencies of international organizations in Vietnam.

e) Goods, services being sold to foreign organizations, individuals, international organizations for humanitarian aids, non-refundable aids for Vietnam.

Procedures for international organizations, foreigners purchasing goods, services in Vietnam for humanitarian aids, non-refundable aids for Vietnam not being subject to VAT: international organizations, foreigners must send dispatches to merchandising establishments in which specify name of the international organizations or foreigners purchasing goods, services for humanitarian aids, non-refundable aids, quantities or values of goods, services; verification of the Ministry of Finance on such aids.

During merchandising, business establishments must issue invoices as prescribed by law on invoices, it must specify on the invoices that the goods is sold to foreign organizations, individuals for humanitarian aids, non-refundable aids, not included VAT and dispatches of the international organizations or representative agencies in Vietnam must be saved as the basis for tax declaration. Foreign organizations, individuals, international organizations purchasing VAT-inclusive goods, services in Vietnam for humanitarian aids, non-refundable aids shall be refunded as guided in clause 6 Article 18 of this Circular.

20. Goods in border-gate transfer, transit through Vietnam territory; goods temporarily imported for re-export; goods temporarily exported for re-import; raw materials imported for production, processing exported goods under export processing, production contracts signed with foreign parties;

Goods, services traded between foreign countries and non-tariff zones and among non-tariff zones themselves.

Non-tariff zones include: processing and exporting zones, processing and exporting enterprises, bonded zones, bonded warehouse, special commercial and economic zones, commercial-industrial zones and other economic zones established and enjoying preferential taxes similarly to non-tariff zones under the Prime Minister’s Decisions. The trading relationship between these zones and the outside is export-import relationship.

Dossiers, procedures for determination and handling of VAT exemption in these cases are implemented as guided by the Ministry of Finance on customs procedures; customs inspection and supervision; export, import duties and tax administration regarding exported/imported goods.

21. Technology transfer as prescribed by the Law on Technology transfer; intellectual property right transfer as prescribed by the Law on Intellectual property. For contracts of technology transfer, intellectual property right transfer attached to machinery, equipment transfer, only the value of the transferred technology, intellectual property rights is not subject to VAT; if such value cannot be separated, VAT shall be imposed on both transferred technology value, intellectual property rights value together with that of the machinery and equipment.

Computer software including software products and software services as prescribed by law

22. Imported gold in forms of bar or ingot and gold not being fashioned into fine arts products, jewelry or other products.

Gold in forms of bar or ingot and gold not being fashioned are identified as prescribed by law on gold trading and management.

23. Exported products being unprocessed exploited natural resources, minerals

Unprocessed exploited natural resources, minerals are natural resources, minerals having not been processed into other products, including minerals being filtered, selected, grinded, crushed, processed for content increase, or natural resources being cut and splitted.

Example 4: Business establishment A exports natural stones in blocks or slabs, the exported natural stone products are not subject to VAT.

Example 5: Business establishment B exports granular and powdery chalky limestone, the exported granular and powdery chalky limestone products are not subject to VAT. For business establishments exporting super fine stone dust (under standards of competent agencies), super fine stone dust coated with acid, these products are defined to be processed into other products and they are subject to VAT upon export.

24. Artificial products used as substitutes for diseased human organs, including products being permanent implanted organs; crutches, wheel-chairs and other tools used exclusively for disabled.

25. Goods, services of business individuals with average monthly income lower than common minimum salary rate applicable to domestic organizations, individuals as prescribed by the Government on region-based minimum salary rates for workers in companies, enterprises, cooperatives, farms, artels, business households, other Vietnam individuals and organizations that hire workers.

26. The following goods, services:

a) Duty-free goods in duty-free shops as prescribed by the Prime Minister.

b) National reserve goods sold by National reserve agencies.

c) State activities that charge fees as prescribed by law on fees and charges.

d) Sweeping and defusing bombs, mines and explosive objects performed by national defense units regarding projects capitalized by the State budget.

In case goods not subject to VAT at the importation stage prescribed in this Article changes use purposes, it is required to declare and pay VAT at the importation stage as prescribed by customs agencies where the customs declaration is registered. Organizations, individuals selling goods in domestic market must declare and pay VAT to directly managing tax agencies as prescribed.

Article 5. Cases not required to declare and pay VAT.

1. Goods, services that tax payers in Vietnam provide from outside Vietnam, except for international transport that points of departure and arrival are overseas;

For business establishments providing services (except for export services) both inside and outside Vietnam, such services are subject to VAT regarding the part of contract value that is performed in Vietnam, except for providing insurance services for imported goods.

Example 6: Company A and Company B (Vietnamese enterprises) sign the lubricant sale contract. Company A purchases lubricant from Singapore, then sells to company B at Singapore seaport., Company A is not required to declare, calculate and pay VAT regarding the revenue from that lubricant sale.

Example 7: Company D signs the art performance contract in Netherlands with unit X being Vietnamese State administration agency. Company D is not required to declare, calculate and pay VAT regarding the revenue from that art performance contract.

Example 8: Company B contracted to provide for company C services of consultancy, survey, design for company C’s investment project in Cambodia ( company B and company C are Vietnamese enterprises). The contractual services are performed in both Vietnam and Cambodia. Company B is not required to declare, calculate and pay VAT regarding services performed in Cambodia. For revenue from services performed in Vietnam, company B must declare and calculate VAT as prescribed.

Example 9: Insurance company Y (being Vietnamese company) signs the insurance providing contract with LLC X for LLC X’s imported goods from France to LLC X’s warehouse in Vietnam. Insurance company Y is not required to declare, calculate and pay VAT regarding the revenue from the insurance contract for imported goods signed with LLC X.

2. Revenues from compensation, bonus, supports, emission right transfer and other financial revenues, except for loan interest received by enterprises not being credit institutions.

When receiving revenues from compensations, bonus, support, emission right transfer and other financial revenues, business establishments shall make collection documents as prescribed. For business establishments spending money, the expenditure documents are made based on the spending purposes.

For compensations in goods, services, establishments paying compensations must issue invoices similarly to that of selling goods, services; establishments receiving compensations shall declare and deduct as prescribed.

Example 10: Joint-stock company VC signs the 6-month loan contract with enterprise T and receive the interest. Joint-stock company VC is required to declare and pay VAT regarding the interest from that loan contract.

Example 11: LLC P&C receives the interest from purchasing bonds and dividend from purchasing other enterprises’ stocks. LLC P&C is not required to declare and pay VAT regarding the interest from purchasing bonds and the received dividend.

Example 12: Enterprise A receives 50 million VND of compensation for contract termination from enterprise B, enterprises A shall make collection documents and is not required to declare and pay VAT regarding that amount.

Example 13: Enterprise X purchases goods from enterprise Y, enterprise X pays in advance for enterprise Y and receives interest on that deposit, enterprise X is not required to declare and pay VAT regarding the collected interest.

Example 14: Enterprise X sells goods for enterprise Z, the total amount is 440 million VND. According to the contract, enterprise Z must make deferred payment within 3 months, the deferred payment interest rate is 1%/month/total amount of the contract. After 3 months, enterprise X receives from enterprise Z 440 million VND of the total amount of the contract and 13,2 million VND of deferred payment (440 million VND x 1% x 3 months), enterprise X is not required to declare and pay VAT regarding the amount of 13,2 million VND.

3. Organizations, individuals producing or trading in Vietnam purchasing services from foreign organizations without permanent establishments in Vietnam, or overseas individuals being non-resident in Vietnam such as: repairing means of transport, machinery, equipment (including materials and spare parts); advertising, marketing, investment and trade promotion; goods sale and service provision brokerage; training, share of charges of international post, telecommunication services between Vietnam and foreign parties performed outside Vietnam.

4. Non-business organizations, individuals, not being VAT payers are not required to declare and calculate VAT when selling their assets, including selling assets being used for loan security at banks and credit institutions.

Example 15: Mr. A being non-business individual sells 01 4-seat car to Mr. B valued at 600 million VND, Mr. A is not required to declare and calculate VAT regarding the money from selling his car.

Example 16: Mr. E being non-business individual mortgages 01 4-seat car for bank VC to take loans. When the payment term is due and Mr. E fails to make payment to bank VC and the asset being the mortgaged car is sold to recover debts, the amount collected from selling the mortgaged car is not required to declare and calculate VAT.

5. Fixed assets being used and depreciated are not required to issue invoices, declare and pay VAT when being transferred by values on accounting books among the business establishments and member units 100% capitalized by one business establishment or among member units 100% capitalized by one business establishment to serve the production and business of goods and services subject to VAT. Business establishments with transferred assets must have Decisions or Order on assets transfer enclosed with asset origin dossiers.

For assets re-valuated as transferred or transferred to establishments producing, trading goods, services not subject to VAT, it is required to issue VAT invoices, declare and pay VAT as prescribed.

6. Other cases:

Business establishments are not required to declare and pay tax in the following cases:

a) Contributing assets as capital for establishing enterprises. Contributed assets must be enclosed with: written record on contributions as capital for production and business, joint-venture, affiliation contract, written assets valuation record by the Council of delivery and receipt of contributed capital from contributing parties (or written valuation by valuating organizations as prescribed by law) enclosed with the dossier on asset origin.

b) Asset transfer among dependent cost-accounting member units of the enterprise; asset transfer upon division, splitting, consolidation, merging, and enterprise transformation. Transferred assets among dependent cost-accounting member units of the business establishment; For assets transferred upon division, splitting, consolidation, merging and transformation, business establishments with transferred assets must have asset transfer orders enclosed with a set of asset origin dossiers and are not required to issue invoices.

For asset transfer among independent cost-accounting units or among member units with full legal entities in the same business establishment, business establishments with transferred assets must issue VAT invoice, declare and pay VAT as prescribed except for the cases guided in clause 5 of this Article.

c) Payment claiming from third parties in insurance activities.

d) Amounts collected on other’s behalf not relating to the sale of goods and services of business establishments.

đ) Revenues from goods, services of agent sale and commissions from agent sale at prices prescribed by agent-appointing parties for commission on services such as: post, telecommunication, lotteries, air/car/train/ship ticket sale; international transport agents, agents of aviation, maritime services thereon applied 0% VAT rates; insurance agents.

e) Revenues from goods, sales and agent commissions received from agent sale of goods, services not subject to VAT.