Decree No. 146/2017/ND-CP dated December 15, 2017 of the Government on amending and supplementing a number of articles of the Government’s Decree No. 100/2016/ND-CP of July 1, 2016, and Decree No. 12/2015/ND-CP of February 12, 2015

DECREE

Amending and supplementing a number of articles of the Government’s Decree No. 100/2016/ND-CP of July 1, 2016, and Decree No. 12/2015/ND-CP of February 12, 2015^[1]

Pursuant to the June 19, 2015 Law on Organization of the Government;

Pursuant to the June 3, 2008 Value-Added Tax Law; the June 19, 2013  Law Amending and Supplementing a Number of Articles of the Value-Added Tax Law; and the April 6, 2016 Law Amending and Supplementing a Number of Articles of the Value-Added Tax Law, the Excise Tax Law and the Tax Administration Law;

Pursuant to the June 3, 2008 Law on Enterprise Income Tax; and the June 19, 2013 Law Amending and Supplementing a Number of Articles of the Law on Enterprise Income Tax;

Pursuant to the November 26, 2014 Law Amending and Supplementing a Number of Articles of the Laws on Taxs;

At the proposal of the Minister of Finance;

The Government issues the Decree amending and supplementing a number of articles of the Government’s Decree No. 100/2016/ND-CP of July 1, 2016, and Decree No. 12/2015/ND-CP of February 12, 2015.

Article 1. To amend and supplement a number of articles of the Government’s Decree No. 209/2013/ND-CP of December 18, 2013, detailing and guiding the implementation of a number of articles of the Value-Added Tax Law, which was amended and supplemented under the Government’s Decree No. 100/2016/ND-CP of July 1, 2016

1. To amend and supplement Clause 11, Article 3 as follow:

“11. Exported natural resources or minerals not yet processed into other products.

Exported products processed directly from natural resources or minerals as main materials with the total value of natural resources or minerals plus the energy cost making up 51% or more of the production cost of the products, except the following cases:

- Exported products processed from natural resources or minerals exploited and processed directly by exporting establishments or by other establishments hired by exporting establishments, which have taken the form of other products in the course of processing but then further processed into exported products (in a closed processing process or in a processing workshop or plant at each stage), are liable to value-added tax at the rate of 0% if they fully satisfy the conditions prescribed at Point c, Clause 2, Article 12 of the Value-Added Tax Law.

- Exported products processed from natural resources or minerals purchased for processing by exporting establishments or for hired processing by other establishments, which have taken the form of other products in the course of processing but then further processed into exported products (in a closed processing process or in a processing workshop or plant at each stage), are liable to value-added tax at the rate of 0% if they fully satisfy the conditions prescribed at Point c, Clause 2, Article 12 of the Value-Added Tax Law.

- Exported products processed from main materials other than natural resources or minerals (natural resources or minerals processed into other products) purchased for processing by exporting establishments or for hired processing by other establishments are liable to value-added tax at the rate of 0% if they fully satisfy the conditions prescribed at Point c, Clause 2, Article 12 of the Value-Added Tax Law.

Natural resources and minerals specified in Clause 23, Article 5 of the Value-Added Tax Law are those of domestic origin, including metallic minerals; non-metallic minerals; crude oil; natural gas; and coal gas.

The value of processed natural resources or minerals shall be determined as follows: For natural resources or minerals directly exploited by exporting establishments, such value is inclusive of direct and indirect costs of the exploitation of natural resources or minerals and exclusive of costs of the transportation of natural resources or minerals from exploitation places to processing places; for natural resources or minerals purchased for processing, such value is inclusive of actual buying prices and exclusive of costs of the transportation of natural resources or minerals from purchase places to processing places.

The energy cost includes costs of fuel, electricity energy and thermal energy.

The determination of the percentage of the value of natural resources or minerals and energy cost in the production cost of products shall be based on final accounts of the previous year; and such percentage shall be stably applied in the year of exportation. In the first year of product exportation, the determination of the percentage of the value of natural resources or minerals and energy cost in the production cost of products shall be based on the investment plan; and such percentage shall be stably applied in the year of exportation. If no investment plan is available, such percentage shall be determined based on the actual state of exported products.

The Ministry of Finance shall assume the prime responsibility for, and coordinate with related agencies in, guiding the identification of natural resources or minerals not yet processed into other products under this Clause.”

2. To amend and supplement Clause 3, Article 10 as follows:

“3. Exporting establishments that export goods or services including goods imported goods for export into non-tariff areas and goods imported for re-export to foreign countries and have a not-yet-credited input value-added tax amount of VND 300 million or more in a month (in case of monthly declaration) or in a quarter (in case of quarterly declaration) are entitled to value-added tax refund on a monthly or quarterly basis, respectively; if they have a not-yet-credited value-added tax amount of under VND 300 million in a month or quarter, they may have such amount credited in the subsequent month or quarter; if they have both goods or services for export and domestic sale, after offsetting the not-yet-credited input value-added tax amount against the payable one, and have a remainder of VND 300 million or more, they are entitled to tax refund. Exporting establishments shall separately account the input value-added tax amount for production and export of exported goods or services; if they cannot do so, the input value-added tax amount shall be determined based on the percentage of revenues from exported goods or services in the total revenues from goods or services in value-added tax declaration periods counted from the tax declaration period following the latest period of tax refund to the present period of requested tax refund.

Exporting establishments are not entitled to tax refund in case their goods imported for re-export are not exported in the customs operation areas in accordance with the customs law; or their export goods are not exported in the customs operation areas in accordance with the customs law.

Tax agencies shall carry out tax refund first and inspection later for export-producing taxpayers that have not been handled for smuggling, illegal cross-border transportation of goods, tax evasion, tax fraud or trade fraud for two consecutive years; and taxpayers not classified as high risk-prone ones in accordance with the Tax Administration Law and guiding documents.”

Article 2. To amend and supplement Point o, Clause 2, Article 9 of the Government’s Decree No. 218/2013/ND-CP of December 26, 2013, detailing and guiding the implementation of the Law on Enterprise Income Tax, which was amended and supplemented under Clause 7, Article 1 of the Government’s Decree No. 12/2015/ND-CP of February 12, 2015

“o/ Expense in excess of VND 3 million/month/person for being contributed to the voluntary pension fund or buying voluntary retirement insurance and life insurance premiums for employees; and expense in excess of the level prescribed by the laws on social insurance and health insurance for being contributed to funds of social security nature (compulsory social insurance and additional retirement insurance), health insurance fund and unemployment insurance fund for employees.

For deductions for contribution to the voluntary pension fund and funds of social security nature or for buying voluntary retirement insurance and life insurance for employees which may be accounted as deductible expenses not exceeding the levels prescribed in this Clause, the conditions for receipt and level of insurance sums shall be specified in any of the following dossiers: employment contracts, collective labor agreements, financial regulations of companies, corporations or groups; and reward regulations set out by chairpersons of Boards of Directors, directors general or directors in accordance with financial regulations of such companies, or corporations or groups;”.

Article 3. Implementation provision

This Decree takes effect on February 1, 2018.

Article 4. Implementation responsibility

1. The Ministry of Finance shall guide the implementation of this Decree.

2. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees and related organizations and individuals shall implement this Decree.-

On behalf of the Government
Prime Minister
NGUYEN XUAN PHUC