Circular No. 134/2014/TT-BTC dated September 12, 2014 of the Ministry of Finance guiding the procedure for extension of VAT payment and refund for import machines and equipments for investment project’s fix assets

Circular

Guiding procedures for extending the payment of, and refunding, value-added tax for machinery and equipment imported to create fixed assets of investment projects[1]

Pursuant to June 3, 2008 Law No. 13/2008/QH12 on Value-Added Tax and June 19, 2013 Law No. 31/2013/QH13 Amending and Supplementing a Number of Articles of the Law on Value-Added Tax;

Pursuant to November 29, 2006 Law No. 78/2006/QH11 on Tax Administration and November 20, 2012 Law No. 21/2012/QH13 Amending and Supplementing a Number of Articles of the Law on Tax Administration;

Pursuant to the Government’s Decree No. 209/2013/ND-CP of December 18, 2013, detailing and guiding a number of articles of the Law on Value-Added Tax;

Pursuant to the Government’s Decree No. 83/2013/ND-CP of July 22, 2013, detailing a number of articles of the Law on Tax Administration and the Law Amending and Supplementing a Number of Articles of the Law on Tax Administration;

In furtherance of the Government’s Resolution No. 63/NQ-CP of August 25, 2014, on a number of tax-related solutions for removing difficulties for, and accelerating the development of, enterprises;

At the proposal of the Director of the Tax Policy Department,

The Minister of Finance promulgates the Decree guiding procedures for extending the payment of, and refunding, value-added tax for machinery and equipment imported to create fixed assets of investment projects.

Article 1. Scope of regulation

1. A new enterprise set up under an ongoing investment project and not yet put into operation or an operating enterprise having an investment project (installing new production lines, expanding operation scope, renewing technologies, improving the eco-environment or increasing production capacity) which directly imports or entrusts others to import machinery and equipment to create fixed assets for its investment project but, for objective reasons, is facing financial difficulties such as having no funding sources to pay value-added tax (VAT) at the stage of importation or having to borrow loans from commercial banks to import machinery and equipment for production and business, and will suffer great damage if the implementation of its investment project is suspended or prolonged when the goods are not cleared from customs procedures, may request extension of payment of import VAT and VAT refund under this Circular if it fully meets the following conditions:

a/ The enterprise has registered to pay tax by the credit method, has a business registration certificate, investment certificate or investment license (practice license); has a seal as prescribed by law; keeps accounting books and documents in accordance with the accounting law; and has a deposit account opened at a bank under its tax identification number;

b/ Machinery and equipment imported to create fixed assets are valued at VND 100 billion or more;

c/ The investment project aims to produce VAT-liable goods or provide VAT-liable services.

2. Machinery and equipment imported to create fixed assets of investment projects not governed by this Circular include: machinery and equipment being fixed assets to be exclusively used for production of weapons and ammunition serving national defense and security; fixed assets, machinery and equipment of credit institutions, reinsurance, life insurance and securities businesses, medical examination and treatment institutions and training institutions; civil aircraft and cruises not used for cargo or passenger transport, tourism or hotel business.

Article 2. Extension of payment of import VAT

1. The enterprises prescribed in Article 1 of this Circular are eligible for extension of payment of import VAT for machinery and equipment to be imported to create fixed assets for their investment projects for 60 days from the prescribed tax payment deadline. The tax payment extension will apply from the time the first import shipment, which is valued at under VND 100 billion, arrives at a port. Goods shall be cleared from customs procedures as soon as customs offices complete the physical inspection.

2. Tax payment extension dossiers 

a/ A written request for extension of VAT payment clearly stating: (1) the reason for requesting the extension of VAT payment for machinery and equipment to be imported to create fixed assets; (2) the commitment on the accuracy of the declaration; and (3) the commitment and plan on payment of the tax amount proposed for payment extension (1 original).

In case goods are imported in more than one shipment, for the first shipment, the enterprise shall enclose a list of imported goods proposed for tax payment extension, made according to form No. 7 provided in Appendix II to the Ministry of Finance’s Circular No. 128/2013/TT-BTC of September 10, 2013, guiding customs procedures; customs inspection and supervision; import duty, export duty and tax administration of imported and exported goods (2 originals), enclosed 2 copies of a reconciliation monitoring slip made according to form 10 provided in Appendix II to Circular No. 128/2013/TT-BTC. In this List, the title “List of goods eligible for import duty exemption” shall be replaced with “List of goods eligible for extension of import VAT payment” and the line  “7. Expected time for completion of the import of goods eligible for duty exemption” shall be replaced with “7. Expected time for completion of the import of goods eligible for VAT payment extension.”

In case the tax amount proposed for payment extension belongs to more than one customs declaration, the written request for tax payment extension must list such declarations.

b/ The tax declaration dossier of the VAT amount proposed for payment extension (1 copy);

c/ The contract on the sale and purchase of imported goods proposed for tax payment extension (1 copy). In case there are more than one contract, to submit 1 copy of each contract;

d/ The document approving the project or investment plan which is the investment certificate, in case an investment certificate has been granted by a competent state agency, or the written approval of the Board of Directors, Shareholders’ Meeting or director in conformity with the delegation of competence prescribed in the enterprise charter, enclosed with the written investment registration and receipt issued by the investment project dossier-receiving agency, in case the investment certificate is unavailable (1 copy);

In case machinery and equipment to be imported are eligible for both VAT payment extension and import duty exemption according to the laws on investment and import duty, the VAT payment extension dossier shall be made and VAT payment extension procedures shall be carried out together with the import duty exemption dossier and procedures as prescribed in Article 102 of Circular No. 128/2013/TT-BTC. For types of documents required for both VAT payment extension and import duty exemption, their number of copies to be submitted is that required for the import duty exemption dossier.

3. Tax payment extension process:

a/ Receiving dossiers:

a.1/ In case the tax payment extension dossier is submitted directly at a customs office, a customs officer shall receive and affix a “received” mark to the dossier showing the time of receiving the dossier and the number of documents in the dossier;

a.2/ In case the tax payment extension dossier is sent by post, a customs officer shall affix a receipt date mark to the dossier and write down the receipt in the customs office’s incoming mail register;

a.3/ In case the tax payment extension dossier is submitted electronically, the receipt, examination and acceptance of the dossier shall be carried out by the customs office via the e-data processing system.

b/ Processing dossiers:

In case the taxpayer’s tax payment extension dossier is incomplete as prescribed, within 1 (one) working day after receiving the dossier, the customs office shall notify such in writing to the taxpayer for dossier supplementation.

Within 3 (three) working days after receiving the customs office’s notice of dossier supplementation, the taxpayer shall complete the dossier.

In case the dossier is complete, truthful and valid as prescribed, within 3 (three) working days after its receipt, the customs office shall notify the taxpayer in writing of its acceptance of the latter’s tax payment extension request.

c/ Responsibility to extend tax payment:

c.1/ Directors of Customs Branches shall extend tax payment for taxpayers that submit dossiers of request for extension of payment of tax amounts which all arise at a single Customs Branch;

c.2/ Directors of provincial-level Customs Departments shall extend tax payment for taxpayers that submit dossiers of requests for extension of payment of tax amounts which arise at different Customs Branches of a provincial-level Customs Department;

c.3/ The General Director of Customs shall extend tax payment for taxpayers that submit dossiers of request for extension of payment of tax amounts which arise at different provincial-level Customs Departments.

Article 3. Procedures and order for VAT refund

1. A tax refund dossier must comprise:

a/ A written request for tax refund, made according to form No. 01/DNHT issued together with the Minister of Finance’s Circular No. 156/2013/TT-BTC of November 6, 2013, guiding a number of articles of the Law on Tax Administration, the Law Amending and Supplementing a Number of Articles of the Law on Tax Administration and the Government’s Decree No. 83/2013/ND-CP of July 22, 2013. It must clearly state that the tax refund request is made in pursuance to this Circular (specifying the number of this Circular) and that the dossier does not comprise import VAT payment documents;

b/ A list of imported goods’ customs declarations which contain customs offices’ certification stamps, made according to form No. 01-1/DNHT issued together with Circular No. 156/2013/TT-BTC. This list must clearly state that it is “enclosed to the tax refund request form No. 01/DNHT” and must be written with the phrase “import VAT payment documents to be submitted later” in the “Note” column.

Enterprises shall take responsibility before law for the validity, lawfulness and truthfulness of their dossiers, invoices and other documents related to their tax refund requests sent to tax offices.

2. Tax refund process:

a/ Submitting and receiving tax refund dossiers:

The enterprise shall make and submit to a tax office a tax refund dossier which does not comprise import VAT payment documents.

In case the tax refund dossier is submitted directly at the tax office, a tax officer shall receive and affix a “received” mark to the dossier showing the time of receiving the dossier and the number of documents in the dossier.

In case the tax refund dossier is sent by post, a tax officer shall affix a receipt date mark to the dossier and write down the receipt in the tax office’s incoming mail register.

In case the tax refund dossier is sent electronically, the receipt, processing and acceptance of the dossier shall be carried out by the tax office via the e-data processing system.

b/ Processing tax refund dossiers:

b.1/ In case the tax refund dossier is incomplete as prescribed, within 2 (two) working days after receiving the dossier, the tax office shall notify in writing the taxpayer thereof for dossier supplementation;

b.2/ In case the tax refund dossier is complete, truthful and valid as prescribed, the tax office shall consider and check the dossier according to the VAT refund process;

b.3/ Within 5 (five) working days after receiving a complete dossier, the tax office shall notify the taxpayer of its eligibility for tax refund and request the taxpayer to submit import VAT payment documents so that the tax office shall issue a decision on pre-inspection tax refund;

b.4/ Within 3 (three) working days after receiving import VAT payment documents, the tax office shall check and compare these documents with the figures declared in the enterprise’s tax refund dossier and issue a tax refund decision. In case the paid VAT amount stated in tax payment documents is lower than the tax amount proposed for refund, the refundable tax amount is the paid tax amount stated in tax payment documents; in case the paid VAT amount stated in tax payment documents is higher than the tax amount proposed for refund, the refundable tax amount is the tax amount proposed for refund.

Article 4. Effect

1. This Circular takes effect on October 27, 2014.

For enterprises prescribed in Article 1 of this Circular which have customs declarations for imported goods registered before the effective date of this Circular and have not yet paid tax, if the tax payment time limit prescribed in Clause 11, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Tax Administration has not yet expired, they are also eligible for tax payment extension and tax refund under this Circular.

2. Other cases of VAT refund not guided in this Circular must still comply with current laws.

Any problems arising in the course of implementation of this Circular should be reported to the Ministry of Finance for study and settlement.-

For the Minister of Finance
Deputy Minister
DO HOANG ANH TUAN