Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance guiding the implementation of the Law on Value-Added Tax and 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

CONDITIONS TO APPLY 0% VAT

On December 31, 2013, the Ministry of Finance issued the Circular No. 219/2013/TT-BTC guiding the implementation of the Law on Value-Added Tax and the Decree No. 209/2013/ND-CP dated December 18, 2013 of the Government on detailing and guiding implementation of several articles of Law on Value-Added Tax.

Within that, the most important content is the application of 0% VAT. Accordingly, exported goods with  a sale contract, export processing contract, or export entrustment contract; bank receipts for payment for exported goods and other documents prescribed by law; a customs declaration if customs procedure has been completed and if the taxpayer exports software programs in the form of physical packages, the customs declaration must be made similarly to ordinary goods in order to deduct input VAT shall be applied 0% VAT. Apart from presenting the aforesaid documents, providers of repair services for foreign aircraft and sea vessels must follow the procedure for importing the aircraft or vessel to Vietnam, and follow the procedure for exporting them after they are repaired in order to be eligible for 0% tax.

Besides, the Circular also details the cases exempted for declaring and paying VAT. In particular, an organization or individual receives a monetary compensation , bonus, allowance, or payment for transfer of emission permit, or other revenues. Any taxpayer that receives a monetary compensation, bonus, allowance, payment for transfer of emission permits, or other revenues must make a receipt for such revenues. The taxpayer shall make receipts for spending according to the spending purposes. If compensation is provided in the form of goods/services, the provider of compensation must issue an invoice, declare and pay VAT as if such goods/services are sold; the recipient of compensation shall declare and deduct tax as prescribed.