THE MINISTRY OF FINANCE
Circular No. 20/2017/TT-BTC dated March 06, 2017 of the Ministry of Finance amending and supplementing Clause 2 Article 8 of the Circular No. 195/2015/TT-BTC dated November 24, 2015 of the Ministry of Finance (amended and supplemented according to the Circular No. 130/2016/TT-BTC dated August 12, 2016 of the Ministry of Finance)
Pursuant to the Law No. 27/2008/QH12 on special excise tax dated November 14, 2008; the Law No. 70/2014/QH13 dated November 26, 2014 amending, supplementing a number of articles of the Law on special consumption;
Pursuant to the Law on tax management No. 78/2006/QH11 dated November 29, 2006 and the Law No. 21/2012/QH13 dated November 20, 2012 amending, supplementing a number of articles of the Law on tax management;
Pursuant to the Law No. 106/2016/QH13 dated April 06, 2016 of the National Assembly on amending a number of Articles of the Law on Value-added Tax, the Law on Special Excise Duty, and the Law on Tax Administration;
Pursuant to the Decree No. 108/2015/ND-CP dated October 28, 2015 of the Government guiding a number of Articles of the Law on Special Excise Duty and the Law on amending the Law on Special Excise Duty;
Pursuant to the Decree No. 100/2016/ND-CP datedJuly 01, 2016 of the Government on elaboration and guidelines for some articles of the law on amendment of the law on value-added tax, the law on special excise duty and the law on tax administration;
Pursuant to the Decree No. 215/2013/ND-CP dated December 23, 2013 of the Government defining the functions, tasks, powers and organizational structure of the Ministry of Finance;
At the proposal of the General Director of the General Department of Taxation;
The Minister of Finance promulgates the Circular amending and supplementing a number of articles under Circulars guiding on special excise tax as follows:
Article 1.
To amend, supplement Clause 2 Article 8 of the Circular No. 195/2015/TT- BTC dated November 24, 2015 of the Ministry of Finance guiding the Decree No. 108/2015/ND-CP dated October 28, 2015 of the Government guiding a number of Articles of the Law on Special Excise Duty and the Law on amending the Law on Special Excise Duty and the Law amending, supplementing a number of articles of the Law on special excise tax (amended and supplemented according to the Circular No. 130/2016/TT-BTC dated August 12, 2016 of the Ministry of Finance) as follows:
“2. Payers of special excise tax (SET) on goods subject to special excise tax at import (except for gasoline) may deduct special excise tax paid at importation from special excise tax payable on goods sold domestically. Deductible SET is equal to special excise tax on goods subject to special excise tax that are sold after import, and must not exceed the special excise tax on goods sold domestically.The taxpayer may include special excise tax that remains after deduction when calculating corporate income tax.
Conditions for deducting SET:
- When importing materials subject to SET to manufacture goods subject to SET, and when importing goods subject to SET, the receipt for SET payment at importation is the basis for SET deduction.
- If materials are purchased from a domestic manufacturer:
+ A sale contract which specifies that the materials are directly manufactured by the seller; copies of the Certificate of Business Registration of the seller which bears the seller’s signature and seal.
+ Bank transfer receipts.
+ VAT invoices. The amount of SET paid by the buyer when buying materials equals (=) taxable price multiplied by (x) SET rate, where:
Taxable price | = | VAT-exclusive buying price (according to the VAT invoice) | - | Environmental protection tax (if any) |
1 + SET rate |
SET payable is calculated as follows:
SET payable | = | SET on goods subject to SET sold in the period | - | Paid SET on the quantity of imported or purchased materials that are used for manufacturing of goods sold in the period |
If SET payable or paid SET on the quantity of materials used for manufacturing of goods sold in the period, the figures of the previous period may be used to calculate deductible SET and the actual amount shall be determined at the end of the quarter or year. In any case, deductible SET must not exceed the SET on the quantity of materials set out in technical regulations applied to such products. The manufacturer must register such technical regulations with the supervisory tax authority.
Example 12: In a tax period, establishment A:
+ Imports 10,000 liters of alcohol and pays VND 250 million of SET at importation (according to the receipt for SET payment at importation).
+ Uses 8,000 liters of alcohol to manufacture 12,000 bottles of alcohol.
+ Sells 9,000 bottles of alcohol; SET on these 9,000 bottles is VND 350 million.
+ SET on the quantity of imported alcohol corresponding to 9,000 bottles that are sold is VND 150 million.
SET payable by establishment A in this period:
350 million – 150 million = 200 million (VND).
Example 13: In a tax period, establishment B:
+ Imports 100 air conditioners of 12,000 BTU and pays VND 100 million of SET at importation (according to the receipt for SET payment at importation).
+ Sells 100 air conditioners domestically; SET on air conditioners sold domestically is VND 120 million.
SET payable by establishment B in this period:
120 million – 100 million = 20 million (VND).
Example 14: In a tax period, establishment B:
+ Imports 100 air conditioners of 12,000 BTU and pays VND 100 million of SET at importation (according to the receipt for SET payment at importation).
+ Sells 100 air conditioners domestically; SET on air conditioners sold domestically is VND 90 million because of a force majeure event.
Establishment B may deduct VND 90 million of SET. Establishment B may include SET that remains after deduction (VND 10 million) in expenses when calculating corporate income tax.
Enterprises permitted to manufacture E5 and/or E10 shall declare and deduct SET at tax authorities in charge of the areas where their headquarters are located. SET on E5 and E10 procedures remains after deduction may be offset against SET payable on other goods/services.
SET payers shall use form No. 01/TTDB (SET declaration) and form No. 01-1/TTDB (Deductible SET on purchased materials and imported goods) enclosed to this Circular.
Article 2.
This Circular takes effect on April 20, 2017.
Any difficulties arising in the course of implementation should be reported to the Ministry of Finance for consideration./.
For The Minister
TheDeputy Minister
Do Hoang Anh Tuan
Vietnamese
Circular 20/2017/TT-BTC DOC (Word)
Circular 20/2017/TT-BTC PDF (Original)
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