Circular No. 205/2009/TT-BTC dated October 26, 2009, of the Ministry of Finance guiding the procedures for the refund of value-added tax on equipment, machinery, special-use vehicles, construction supplies, raw materials, supplies and semi-finished products included in technology lines which cannot be produced at home and need to be imported to create fixed assets of enterprises

THE MINISTRY OF FINANCE

Circular No. 205/2009/TT-BTC of October 26, 2009, guiding the procedures for the refund of value-added tax on equipment, machinery, special-use vehicles, construction supplies, raw materials, supplies and semi-finished products included in technology lines which cannot be produced at home and need to be imported to create fixed assets of enterprises

Pursuant to June 3, 2008 Law No. 13/2008/QH12 on Value-Added Tax (VAT);

Pursuant to November 29, 2006 Law No. 78/2006/QH11 on Tax Administration;

Pursuant to the Government’s Decree No. 123/2008/ND-CP of December 8, 2008, detailing and guiding the implementation of a number of articles of the Law on Value-Added Tax;

Pursuant to the Government’s Decree No. 85/2007/ND-CP of May 25, 2007, detailing the implementation of a number of articles of the Law on Tax Administration;

Pursuant to the Government’s Decree No. 118/2008/ND-CP of November 27, 2008, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

The Ministry of Finance guides the procedures for the refund of VAT on equipment, machinery, special-use vehicles, construction supplies, raw materials, supplies and semi-finished products included in technology lines which cannot be produced at home and need to be imported to create fixed assets of enterprises as follows:

Article 1. Scope of application

1. Business establishments which are newly set up under investment projects and have made business registration but are making investment preparation and have not yet been put into operation or operating business establishments which have investment projects on setting up production establishments in provinces or centrally run cities other than the localities where they are headquartered but these projects are making investment preparations and have neither yet been put into operation nor made business registration and tax registration, when importing equipment, machinery, special-use vehicles, construction materials, raw materials, supplies and semi-finished products included in technology lines which cannot be produced at home and need to be imported to create their fixed assets, may choose to apply the procedures for VAT refund under the guidance in this Circular if they fully meet the following conditions:

- They have registered for VAT payment by the credit method and have been granted business registration certificates or investment licenses (practice permits); have a seal in accordance with law and keep accounting books and documents in accordance with the accounting law; and have bank accounts with their tax identification numbers;

- The VAT amount payable upon import of equipment, machinery, special-use vehicles, construction materials, raw materials, supplies and semi-finished products included in technology lines which cannot be produced at home and need to be imported to create fixed assets is VND 200 million or more.

- Their investment projects are of national importance which are considered and decided by the National Assembly or group-A investment projects specified in Article 2 of the Government’s Decree No. 12/2009/ND-CP of February 12, 2009, on the management of investment projects on construction of works.

- Theirs are investment projects on production of and trading in VAT-liable goods and services or both VAT-liable and non-VAT-liable products and services.

2. Goods which cannot be produced at home and need to be imported to create fixed assets specified in Clause 1 of this Article will be deter-mined based on the list of equipment, machinery, spare parts and special-use vehicles which can be produced at home, the list of construction materials which can be produced at home and the list of raw materials, supplies and semi-finished products which can be produced at home, issued by the Ministry of Planning and Investment. In case production and business establishments import complete technology lines which include both equipment, machinery, special-use vehicles, construction materials, raw materials, supplies and semi-finished products which cannot be produced at home and those which can be produced at home, they may carry out procedures for tax refund under the guidance in this Circular for all equipment, machinery, special-use vehicles, construction materials, raw materials, supplies and semi-finished products included in technology lines.

3. Goods which cannot be produced at home and need to be imported specified in Clauses 1 and 2 of this Article do not include: special-use fixed assets used for the manufacture of weapons and ammunitions for defense and security; fixed assets which are houses used as offices and special-use equipment in service of credit activities of credit institutions, reinsurance, life insurance and securities companies, hospitals and schools; civil aircraft and yachts not used for passenger and cargo transportation or tourism and hotel business.

Article 2. Procedures for and order of VAT refund

1. A dossier of VAT refund comprises:

a/ An application for tax refund, made according to form No. 01/HTBT issued together with the Finance Ministry’s Circular No. 60/2007/TT-BTC of June 14, 2007, guiding the implementation of a number of articles of the Law on Tax Administration and Decree No. 85/2007/ND-CP, clearly stating the refund of VAT on imported equipment, machinery, special-use vehicles and supplies included in technology lines which cannot be produced at home and need to be imported to create fixed assets. The dossier does not include documents on payment of VAT at the import stage.

b/ A declaration of the VAT amount paid on imported goods computed aggregately for all customs declarations affixed with the certification stamps of customs offices, made according to form No. 01-1/HTBT issued together with Circular No. 60/2007/TT-BTC, in which:

- The “creditable input VAT amount” and the “input VAT amount which is higher than the VAT amount proposed to be refunded” items are written with the payable VAT amount;

- The “output VAT amount” item is left blank and crossed out;

- The “paid VAT amount” item is written with the phrase “documents on payment of VAT at the import stage are not yet submitted.”

c/ A list of customs declarations affixed with the certification stamp of customs offices, made according to form No. 01-2/GTGT issued together with Circular No. 60/2007/TT-BTC, clearly stating that the list is enclosed to the application for tax refund made according form No. 01/HTBT in which:

- The “invoice code” item is replaced with “customs declaration code”;

- The “invoice number” item is replaced with “customs declaration number”;

- The “date of issuance” item is replaced with “date of registration of customs declarations”;

- The “notes” column is written with the phrase “documents on VAT payment are not yet submitted.”

Business establishments shall take responsibility before law for the validity, lawfulness and accuracy of dossiers, vouchers, invoices and other documents related to the request for VAT refund.

2. Order of VAT refund:

- Business establishments shall compile and send to tax agencies dossiers of application for VAT refund, excluding documents on payment of VAT at the import stage.

- Tax agencies shall receive and examine dossiers of application for tax refund of business establishments in accordance with the procedures for VAT refund. Within 15 days after receiving complete dossiers, tax agencies shall notify business establishments that their dossiers are valid for tax refund and request business establishments to submit documents on payment of VAT at the import stage for tax agencies to issue decisions on tax refund. The time limit of 15 days for examination of dossiers of application for tax refund will apply to both dossiers subject to inspection prior to tax refund and those valid for tax refund prior to inspection.

- Within 3 working days after receiving documents on payment of VAT on imported goods, tax agencies shall check tax payment documents against the figures declared in the approved tax refund dossiers of business establishments and issue a tax refund decision. In case the paid VAT amount inscribed in tax payment documents is lower than the tax amount proposed for refund, the to-be refunded tax amount is the amount indicated in tax payment documents. In case the paid VAT amount indicated in tax payment documents is higher than the tax amount proposed for refund, the to-be-refunded tax amount is the amount proposed for refund.

Article 3. Effect

This Circular takes effect 45 days after the date of its signing. Other cases of VAT refund not yet guided in this Circular shall comply with current laws.

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

For the Minister of Finance
Deputy Minister
DO HOANG ANH TUAN