Circular No. 116/2002/TT-BTC dated December 25, 2002 of the Ministry of Finance guiding the implementation of the Government’s Decree No. 108/2002/ND-CP dated December 25, 2002 annulling the regulation on input Value Added Tax (VAT) deduction in percentage (%) for a number of goods and services

CIRCULAR

GUIDING THE IMPLEMENTATION OF THE GOVERNMENT’S DECREE NO. 108/2002/ND-CP OF DECEMBER 25, 2002 ANNULLING THE REGULATION ON INPUT VALUE ADDED TAX (VAT) DEDUCTION IN PERCENTAGE (%) FOR A NUMBER OF GOODS AND SERVICES

Pursuant to Value Added Tax Law No. 02/1997/QH9 of May 10, 1997;

Pursuant to the Governments Decree No. 108/2002/ND-CP of December 25, 2002 annulling the regulation on input VAT deduction in percentage (%) for a number of goods and services;

The Ministry of Finance hereby guides the annulment of the regulation on input VAT deduction in percentage (%) for a number of goods and services as follows:

1. To annul the input VAT deduction in percentage (%) under the guidance at Point 1, Section IV of Circular No. 82/2002/TT-BTC of September 18, 2002 guiding the amendments and supplements to a number of contents of Circular No. 122/2000/TT-BTC of December 29, 2000 guiding the implementation of the Governments Decree No. 79/2000/ND-CP of December 29, 2000 detailing the implementation of the Value Added Tax Law on:

- VAT-liable goods and services purchased from business establishments that pay VAT by the method of direct calculation on the added value with goods sale invoices (now the common sale invoices).

- Goods being unprocessed agricultural, forestry and aquatic products, purchased from production establishments and not liable to VAT at the production stage but with the use of value added invoices.

- Goods being unprocessed agricultural, forestry and aquatic products; soils, stones, sand, gravel and discarded materials, purchased without invoices but with lists (now the invoices for purchasing agricultural, forestry and aquatic products, applicable to goods being agricultural, forestry and aquatic products) from the sellers.

- Insurance indemnities for insurance operations liable to VAT (calculated on the value of the insurance indemnities) falling within the responsibility of the insurance business establishments.

2. For goods liable to special consumption tax, which are purchased from production establishments by trading establishments for sale with goods sale invoices, the input VAT deduction of 1% as guided at Point 1, Section IV of Circular No. 82/2002/TT-BTC (said above) shall still apply.

The regulation on input VAT deduction at this Point shall not apply to cases where trading establishments purchase special consumption tax-liable goods from production establishments for export.

3. This Circular takes effect as from January 1, 2003. All stipulations contrary to the guidance in this Circular are hereby annulled. In the course of implementation, if meeting with any problems, the units are requested to report them to the Ministry of Finance for consideration and settlement.