Circular No. 26/2016/TT-BTC dated February 18, 2016 of the Ministry of Finance guiding the implementation of a number of incentive policies applicable to Con Dao, Ba Ria – Vung Tau province

THE MINISTRY OF FINANCE

Circular No. 26/2016/TT-BTC dated February 18, 2016 of the Ministry of Finance guiding the implementation of a number of incentive policies applicable to Con Dao, Ba Ria – Vung Tau province

Pursuant to the import and export tax Law and documents guiding the implementation;

Pursuant to the Law on value-added tax and documents guiding the implementation;

Pursuant to the Law on enterprise income tax and documents guiding the implementation;

Pursuant to the Investment Law No. 67/2014/QH13 and documents guiding the implementation;

Pursuant to the Government’s Decree No. 45/2014/ND-CP dated May 15, 2014 stipulating the collection of land use levy; the Government’s Decree No. 46/2014/ND-CP dated May 15, 2014 stipulating the collection of land rental and water surface rental;

Pursuant to the Decision No. 32/2013/QD-TTg dated May 22, 2013 of the Prime Minister providing for a number of incentive policies applicable to Con Dao, Ba Ria – Vung Tau Province ;

Pursuant to the Decision No. 24/2009/QD-TTg dated February 17, 2009 of the Prime Minister promulgating regulations on trading in duty-free goods; Decision No. 44/2013/QD-TTg dated July 19, 2013 amending a number of articles of the Regulations on trading in duty-free goods promulgated under Decision No. 24/2009/QD-TTg; Decision No. 39/2015/QD-TTg dated September 11, 2015 amending a number of articles of the Regulations on trading in duty-free goods promulgated under Decision No. 24/2009/QD-TTg dated February 17, 2009 and Decision No. 44/2013/QD-TTg;

Pursuant to the Government s Decree No. 215/2013/ND-CP dated December 23, 2013 defining the functions, tasks, powers and apparatus of the Ministry of Finance;

Implementing the advice of the Prime Minister at the Official Dispatch No. 5528/VPCP-KTTH dated July 16, 2015 of the Government Office;

At the request of the Director General of the Department of tax policy,

The Minister of Finance promulgates a Circular to provide guidance on implementation of a number of incentive policies applicable to Con Dao, Ba Ria – Vung Tau Province.

Article 1. Scope of adjustment

This Circular provides guidance on incentive policies on the enterprise income tax; incentive policies on import tax and export tax; incentive policies on exemption and reduction of land use levy and land rental for investment projects in Con Dao, Ba Ria – Vung Tau Province(hereinafter referred to as Con Dao); refund of value added tax (VAT) on goods purchased in Vietnam and brought out of Vietnam through Con Dao border checkpoint by foreigner or overseas Vietnamese who holds passport or entry permit issued by the foreign competent authorities; construction and establishment of duty-free shops in Con Dao; procedures for selling duty-free goods to visitors who are foreigners or overseas Vietnamese who hold foreign passports to Con Dao.

Article 2. Guidance on incentives on taxes, land use levy and land rental

1.Incentives on the enterprise income tax

a) Investment projects of domestic and foreign organizations and individuals in Con Dao shall be enjoyed the incentives on enterprise income tax applicable to investment projects in areas with specially difficult socio-economic conditions as regulated in the Law on enterprise income tax No. 14/2008/QH12, the Law on amendments to the Law on enterprise income tax No. 32/2013/QH13, the Law on amendments to the tax laws No. 71/2014/QH13 and documents guiding the implementation.

b) Procedures for implementing the incentives on enterprise income tax: The Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Minister of Finance guiding the implementation of the Government s Decree No. 218/2013/ND-CP dated December 26, 2013 on detailed regulations and guidelines for implementing the Law on enterprise income tax and the Circular No. 96/2015/TT-BTC dated June 22, 2015 of the Minister of Finance providing guidance on the enterprise income tax stipulated in the Government s Decree No. 12/2015/ND-CP dated February 12, 2015 on detailed regulations on implementation of the Law on amendments to the tax laws and amendments to the tax decrees and amendments to the Circular No. 78/2014/TT-BTC dated June 18, 2014, the Circular No. 119/2014/TT-BTC dated August 25, 2014, the Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Minister of Finance shall apply.

2.Incentives on import tax and export tax

a) Investment projects of domestic and foreign organizations and individuals in Con Dao shall be enjoyed the incentives on import tax and export tax applicable to investment projects in areas with specially difficult socio-economic conditions as regulated in the import and export tax Law and documents guiding the implementation.

b) Procedures for implementing the incentives on import tax and export tax shall comply with the Circular No. 38/2015/TT-BTC dated March 25, 2015of the Minister of Finance on customs procedures, customs supervision and inspection; import tax and export tax and tax administration applied to imported and exported goods.

3.Incentives on land use levy and land rental

a) Investment projects in Con Dao shall be enjoyed incentives on exemption and reduction of land use levy, land rental and water surface rental at the incentive rates applied to:

-Investment projects in areas with specially difficult socio-economic conditions;

-Investment projects in business lines eligible for investment incentives(including business lines eligible for investment incentives or special investment incentives specified in Appendix I-List of business lines eligible for investment incentives promulgate under the Government’s Decree No. 118/2015/ND-CP dated November 12, 2015 on detailed regulations and guidelines for implementing a number of articles of the Investment Law)in Con Dao( in areas with specially difficult socio-economic conditions)shall be enjoyed the corresponding incentive rates in accordance with the law on land use levy, land rental and water surface rental.

b) Documents stipulating the incentive rates on land use levy, land rental and water surface rental stated in Point a of this Clause shall be applied as follows:

-Incentives on land use levy shall be executed in accordance with the Government’s Decree No. 45/2014/ND-CP dated May 15, 2014 stipulating the collection of land use levy and the Circular No. 76/2014/TT-BTC dated June 16, 2014 of the Minister of Finance providing guidance on a number of articles of the Decree No. 45/2014/ND-CP. Procedures for implementing the incentives on land use levy shall comply with the Circular No. 76/2014/TT-BTC stated above.

-Incentives on land rental and water surface rental shall be executed in accordance with the Government’s Decree No. 46/2014/ND-CP dated May 15, 2014 stipulating the collection of land rental and water surface rental and the Circular No. 77/2014/TT-BTC dated June 16, 2014 of the Minister of Finance providing guidance on a number of articles of the Decree No. 46/2014/ND-CP. Procedures for implementing the incentives on land rental and water surface rental shall comply with the Circular No. 77/2014/TT-BTC stated above.

Article 3. Guidance on refund of value added tax (VAT) on goods purchased in Vietnam and brought out of Vietnam through Con Dao border checkpoint by foreigner or overseas Vietnamese

Foreigner or overseas Vietnamese who holds valid passport or entry permit issued by the foreign competent authorities shall be eligible for refund of value added tax (VAT) on goods purchased in Vietnam and taken with them upon exit through Ben Dam international port, Con Dao or international airports or international maritime ports qualified for state management on customs as regulated in Clause 7 Article 1 of the Law on amendments to the Law on value added tax No. 31/2013/QH13, the Government’s Decree No. 209/2013/ND-CP dated December 18, 2013 on detailed regulations and guidelines for implementing a number of articles of the Law on value added tax and the Circular No. 72/2014/TT-BTC dated May 30, 2014 of the Minister of Finance on refund of VAT on goods of foreigners or overseas Vietnamese that taken with them upon exit.

Article 4. Guidance on construction and establishment of duty-free shops in Con Dao and procedures for selling duty-free goods to visitors who are foreigners or overseas Vietnamese who hold foreign passports to Con Dao

1.Construction and establishment of duty-free shops in Con Dao

a) Construction and establishment of duty-free shops in Con Dao(in isolated area of Ben Dam Port or in Con Dao territory)shall be executed in accordance with the Decision No. 24/2009/QD-TTg dated February 17, 2009 of the Prime Minister promulgating regulations on trading in duty-free goods(Decision No. 24/2009/QD-TTg), Decision No. 44/2013/QD-TTg dated July 19, 2013 of the Prime Minister amending a number of articles of the Regulations on trading in duty-free goods promulgated under Decision No. 24/2009/QD-TTg(Decision No. 44/2013/QD-TTg); Decision No. 39/2015/QD-TTg dated September 11, 2015 amending a number of articles of the Regulations on trading in duty-free goods promulgated under Decision No. 24/2009/QD-TTg and Decision No. 44/2013/QD-TTg(Decision No. 39/2015/QD-TTg ); The Circular No. 148/2013/TT-BTC dated October 25, 2013 of the Minister of Finance guiding the implementation of the Regulations on trading in duty-free goods promulgated under Decision No. 24/2009/QD-TTg and Decision No. 44/2013/QD-TTg(Circular No. 148/2013/TT-BTC);The Circular No. 207/2015/TT-BTC dated December 25, 2015 of the Minister of Finance on amendments to the Circular No. 148/2013/TT-BTC(Circular No. 207/2015/TT-BTC).

b) Duty-free shops in Con Dao are eligible for selling duty-free goods to the following entities:

-Entities eligible for buying duty-free goods as regulated in the Decision No. 24/2009/QD-TTg and Decision No. 44/2013/QD-TTg. Procedures for implementing the sales of duty-free goods shall comply with the Circular No. 148/2013/TT-BTC and Circular No. 207/2015/TT-BTC.

-Visitors who are foreigners or overseas Vietnamese holding foreign passports and eligible for buying duty-free goods upon coming Con Dao with value not exceeding VND 500,000 per person/day. Procedures for implementing the sales of duty-free goods shall comply with Clause 2 of this Article.

2.Procedures for selling import duty-free goods to visitors who are foreigners or overseas Vietnamese holding foreign passports to Con Dao(buyers of import duty-free goods)

a) Regulations on goods

Goods put in duty-free shops must be clearly accounted for selling price, in which the import tax amount for each case that has been deducted from quota for tax exemption, VAT amount, special consumption tax amount and environmental protection tax amount(if any)must be clearly determined.

b) Responsibilities of traders in duty-free goods:

b1) Trader must establish a software system with the following main functions:

-Load information, look up and total up the quantity of goods sold out, and tax amount after having quota for exemption from import tax deducted.

-Save and print data out to serve report, statistical and storing affairs.

-Share information with Con Dao Customs Branch to serve inspection and control affairs.

b2) Weekly, trader in duty-free goods shall aggregate the quantity of goods sold to visitors and then, submit summary table to the customs agency. Summary table of the quantity of goods sold to visitors includes the following information: Name of visitor, passport number, name of goods, quantity and amount, payable tax amount, number of customs declaration form for imported goods(using form enclosed with this Circular).

b3) Ahead of the 15^thof the following month, trader shall carry out customs procedures for goods used for domestic consumption of previous month. Customs declaration form for changing use purpose of goods to domestic consumption shall be used to finalize customs declaration forms for imported goods.

b4) While selling goods to visitors who are foreigners or overseas Vietnamese holding foreign passports to Con Dao, trader in duty-free goods shall enter the following data into the software system:

-Name of visitor as specified in his passport or document having equivalent validity;

-Number of passport or document having equivalent validity;

-Name of goods, unit of calculation according to those stated in the customs declaration form for importing goods for sales in duty-free shops.

-Quantity and amount.

b5) Calculation of VAT, special consumption tax and environmental protection tax(if any) for amount of goods being exempted from import tax. All kinds of taxes shall be aggregated for the amount in excess of standard quota.

If the visitor buys many kinds of goods and total value of goods bought in excess of the quota for exemption from the import tax, the visitor shall determine the goods whose value exceeds the quota for tax exemption for making tax payment.

b6) Store daily sale invoices(if the sale invoices are made in roll, the storage of invoices shall be made in roll)and photocopies of valid passports or exit and entry permits issued by the foreign competent authorities.

c) Responsibilities of buyer of import duty-free goods: The buyer of import duty-free goods must present and provide relevant information as regulated in point b4 of this Clause when buying any import duty-free goods. The buyer of import duty-free goods is not allowed to grant permission to another person to use his passport and quota for exemption from import tax.

d) Responsibilities of customs agencies managing duty-free shops:

-Weekly, the customs agencies shall compare and certify the quantity of goods sold to visitors by traders through software system and surveillance camera.

-Open customs declaration forms for changing use purpose of goods sold to visitors into domestic consumption.

dd) Customs procedures and finalization documents for goods imported for selling as duty-free goods: The Circular No. 148/2013/TT-BTC dated October 25, 2013 of the Minister of Finance guiding the implementation of the Regulations on trading in duty-free goods promulgated under Decision No. 24/2009/QD-TTg and Decision No. 44/2013/QD-TTg; The Circular No. 207/2015/TT-BTC dated December 25, 2015 of the Minister of Finance on amendments to the Circular No. 148/2013/TT-BTC shall apply.

Article 5. Effect

1.This Circular takes effect on April 03, 2016.

2. If relevant documents stated in this Circular are amended or replaced, the new one shall apply in the course of implementation.

For the Minister

The Deputy Minister

Vu Thi Mai