Circular No. 35/2011/TT-BTC dated March 15, 2011 of the Ministry of Finance guiding some contents on value-added tax on telecommunications services

PAY 2% VAT FOR POSTPAID TELECOMMUNICATIONS SERVICES REVENUE

On March 15, 2011, the Ministry of Finance issued the Circular No. 35/2011/TT-BTC guiding some contents on value-added tax (VAT) on telecommunications services.

Within that, In case a telecommunications service business commercially provides postpaid telecommunications services in provinces and/or centrally run cities other than that in which its head office is based and establishes dependent cost-accounting branches that pay VAT by the credit method and join in providing these telecommunications services in such localities.

VAT amounts payable in the localities in which its dependent cost-accounting branches are based shall be determined to be 2% (for postpaid telecommunications services subject to the VAT rate of 10%) of revenues (exclusive of VAT) from postpaid telecommunications services in these localities.

Monthly, after completing the comparison of figures on telecommunications connection service charges, telecommunications service businesses shall make out value-added invoices and declare and pay VAT according to current regulations. The time limit for completing the comparison complies with economic contracts between telecommunications service businesses but must not exceed 2 months counting from the month in which telecommunications connection service charges arise.

In case a telecommunications service business completes the comparison late, resulting in the making out of value-added invoices for the provision of telecommunications connection service after the above time limit, it shall be sanctioned for such tax-related violation under current regulations. The time for calculating fines on late VAT payment is the date following the deadline for submission of tax declaration dossiers for telecommunications connection service charges of which the comparison is completed late.