Law Amending and Supplementing a Number of Articles of the Law on Value-Added Tax
(No. 31/2013/QH13)
Pursuant to the 1992 Constitution of the Socialist Republic of Vietnam, which was amended and supplemented under Resolution No. 51/2001/QH10;
The National Assembly promulgates the Law Amending and Supplementing a Number of Articles of Law No. 13/2008/QH12 on Value-Added Tax.
Article 1.
To amend and supplement a number of articles of the Law on Value-Added Tax
1. To amend and supplement Clauses 4, 7, 8, 11, 15, 17, 23 and 25, Article 5 as follows:
“4. Salt products made of seawater, natural rock salt, refined salt and iodized salt in which sodium chloride (NaCl) is a major component.”
“7. Life insurance, health insurance, student insurance, other human-related insurance services; insurance for domestic animals, insurance for plants, other agricultural insurance services; insurance for ships, boats, equipment and other necessary equipment for fishing; and reinsurance.
8. The following financial, banking and securities trading services:
a/ Credit provision services, including lending; discount and rediscount of negotiable instruments and other valuable papers; guarantee; financial lease; credit card issuance; domestic factoring; international factoring; and other forms of credit provision as prescribed by law;
b/ Lending services of taxpayers that are not credit institutions;
c/ Securities trading, including securities brokerage; securities dealing; securities issuance guarantee; securities investment consultancy; securities depository; management of securities investment funds; management of securities investment portfolio; market organizing service of stock exchanges or securities trading centers; and other securities trading activities as prescribed by the law on securities;
d/ Capital transfer, including transfer of part or the whole of invested capital, including the case of selling enterprises to other enterprises for production, business or securities transfer; and other forms of capital transfer as prescribed by law;
dd/ Selling debts;
e/ Foreign currency trading;
g/ Derivative financial services, including interest rate swapping, forward contracts, futures contracts; foreign currency trading options; and other derivative financial services as prescribed by law;
h/ Selling security property of debts of government-established organizations of which 100 percent of chartered capital is held by the State to deal with bad debts of Vietnam’s credit institutions.”
“11. The service of maintenance of zoos, flower gardens, parks, street greeneries and public lighting; and funeral services.”
“15. Publication, import and distribution of newspapers, journals, specialized bulletins, political books, textbooks, teaching materials, law books, scientific-technical books, books printed in ethnic minority languages, and propaganda paintings, pictures and posters, including those in the forms of audio or visual tapes or discs or electronic data; money and money printing.”
“17. Machinery, equipment, parts and supplies which cannot be manufactured at home and need to be imported for direct use in scientific research and technological development; machinery, equipment, spare parts, special-purpose means of transport and supplies which cannot be manufactured at home and need to be imported for prospecting, exploring and developing oil and gas fields; aircraft, drilling platforms and ships which cannot be manufactured at home and need to be imported for the formation of enterprises’ fixed assets or which are hired from foreign parties for production and business activities or for lease and sublease.”
“23. Exported products which are mined resources or minerals and have not been processed into other products.”
“25. Goods and services of business households or individuals with annual turnover of one hundred million Vietnam dong or less.
Establishments trading in goods or services not subject to value-added tax specified in this Article are not entitled to input value-added tax credit or refund, except the cases subject to the tax rate of 0% specified in Clause 1, Article 8 of this Law.”
2. To amend and supplement Points a, b, and d, Clause 1, Article 7 as follows:
“a/ For goods and services sold by production and business establishments, the taxable price is the selling price exclusive of value-added tax. For excise tax-liable goods and services, the taxable price is the selling price inclusive of excise tax but exclusive of value-added tax; for environmental protection tax-liable goods, the taxable price is the selling price inclusive of environmental protection tax but exclusive of value-added tax; for excise tax and environmental protection tax-liable goods, the taxable price is the selling price inclusive of excise tax and environmental protection tax but exclusive of value-added tax;
b/ For imported goods, the taxable price is the border-gate import price plus import tax (if any), excise tax (if any) and environmental protection tax (if any). The border-gate import price is determined under regulations on prices for calculating import tax;”
“d/ For asset lease, the taxable price is the rent exclusive of value-added tax;
In case of asset lease for which rents are paid periodically or in advance for the lease duration, the taxable price is the rent paid periodically or in advance, exclusive of value-added tax;”
3. To amend and supplement Clause 1, Article 8; to supplement Point q to Clause 2, Article 8 as follows:
“1. The tax rate of 0% applies to exported goods and services, international transportation and goods and services not liable to value-added tax specified in Article 5 of this Law upon exportation, except the following cases:
a/ Transfer of technologies or intellectual property rights abroad;
b/ Offshore reinsurance services;
c/ Credit provision services;
d/ Capital transfer;
dd/ Derivative financial services;
e/ Post and telecommunications services;
g/ Exported products being mined resources and minerals that have not been processed into other products specified in Clause 23, Article 5 of this Law.
Exported goods and services are goods and services used abroad and in non-tariff areas; and goods and services supplied to foreign customers under the Government’s regulations.”
“2. The tax rate of 5% applies to the following goods and services:
q/ Selling, leasing, and leasing-purchasing social houses in accordance with the Housing Law.”
4. To amend and supplement Article 10 as follows:
“Article 10. Tax credit method
1. The value-added tax credit method is specified as follows:
a/ The payable value-added tax amount according to the tax credit method is the output value-added tax amount minus the creditable input value-added tax amount;
b/ The output value-added tax amount is the total amount of value-added tax on sold goods or services indicated on the added-value invoice;
The value-added tax on sold goods or services indicated on the added-value invoice is the taxable price of tax-subject sold goods or services multiplied by their value-added tax rate.
In case payment documents indicating payment prices inclusive of value-added tax are used, the output value-added tax is determined to be payment price minus the value-added taxable price specified at Point k, Clause 1, Article 7 of this Law;
c/ The creditable input value-added tax amount is the total value-added tax amount indicated on the added-value invoice on goods or service purchase and the document proving the payment of value-added tax on imported goods, and must satisfy the conditions specified in Article 12 of this Law.
2. The tax credit method applies to business establishments which fully observe regulations on accounting, invoices and documents as prescribed by the law on accounting, invoices and documents and include:
a/ Business establishments with annual revenues of one billion Vietnam dong or more from selling goods and providing services, excluding business households and individuals;
b/ Business establishments voluntarily registering to apply the value-added tax credit method, excluding business households and individuals;
3. The Government shall detail this Article.”
5. To amend and supplement Article 11 as follows:
“Article 11. Method of calculation of tax based directly on added value
1. The payable value-added tax amount according to the method of calculation of tax based directly on added value is the added value multiplied by the value-added tax rate applied to gold, silver and gem sale, purchase and processing.
The added value of gold, silver or gem is determined by the selling price of gold, silver or gem minus the purchase price of such gold, silver or gem.
2. The payable value added tax amount according to the method of calculation of tax based directly on added value is the percentage multiplied by turnover as follows:
a/ Subjects of application:
- Businesses and cooperatives with annual turnover of below one billion Vietnam dong, excluding those making voluntary registration for the application of the tax credit method stipulated in Clause 2, Article 10 of this Law;
- Business households and individuals;
- Foreign business organizations and individuals without Vietnam-based resident establishments but having incomes generated in Vietnam that fail to fully observe regulations on accounting, invoices and documents, excluding foreign organizations and individuals providing goods and services for oil and gas prospecting, exploration, development and exploitation and having their tax credited and paid by the Vietnamese side.
- Other economic entities, excluding those making registration for the application of the tax credit method stipulated in Clause 2, Article 10 of this Law;
b/ The percentage used for calculating value-added tax is stipulated as follows:
- Goods distribution and supply: 1%;
- Services, construction that does not cover materials: 5%.
- Production, transport and services associated with goods, construction that covers materials: 3%.
- Other business activities: 2%”.
6. To amend and supplement Article 12 as follows:
“Article 12. Input value-added tax credit
1. Business establishments which pay value-added tax according to the tax credit method are entitled to input value-added tax credit as follows:
a/ Input value-added tax on goods or services used for the production or trading of goods or services subject to value-added tax may be wholly credited, including uncompensated input value-added tax of lost goods and services subject to value added tax;
b/ For goods or services used for the production and trading of goods or services both subject and not subject to value-added tax, only the amount of input value-added tax on goods or services used for the production and trading of goods or services subject to value-added tax is creditable. Business establishments shall separately account credited and non-credited input value added tax amounts; in case separate accounting is impossible, the credited input tax is determined according to the proportion of the turnover from value added tax-liable goods and services to the total turnover from sold goods and services;
c/ The input value-added tax on goods or services sold to organizations or individuals using humanitarian aid or non-refundable aid is wholly credited;
d/ The input value-added tax on goods or services used in prospecting, exploring and developing oil and gas fields is wholly credited;
dd/ The input value-added tax arising in a month must be declared and credited when determining the payable tax amount of that month. In case a business establishment detects errors in the declared or credited input value-added tax amount, it may make additional declaration and credit before the tax agency announces its decision on tax examination and inspection at the taxpayer’s headquarters.
2. Conditions for input value-added tax credit are specified as follows:
a/ Having an added-value invoice on goods or service purchase or a document proving the payment of value-added tax at the stage of importation;
b/ Having a non-cash payment document of purchased goods or services, except goods or services valued at under twenty million Vietnam dong upon each time of purchase;
c/ For exported goods and services, apart from the conditions specified at Points a and b of this Clause, the business establishment must also have a contract signed with a foreign party on goods sale or processing or service provision; a goods or service sale invoice; a non-cash payment document; and a customs declaration on exported goods.
Payment for exported goods or services by clearing between exported goods or services and imported goods or services, or payment of debts on behalf of the State is regarded as non-cash payment.
7. To amend and supplement Article 13 as follows:
“Article 13. Cases eligible for tax refund
1. When business establishments that pay value-added tax according to the tax credit method have their input value-added tax amounts not fully credited within a month or a quarter, they may have such tax amounts credited in the following period; in case the value-added tax amount is not fully credited after at least twelve months from the first month or at least four quarters from the first quarter in which the value-added tax amount arises, business establishments are entitled to tax refund.
A business establishment having registered to pay value-added tax according to the tax credit method is entitled to tax refund if it has a new investment project and has an amount of value-added tax on purchased goods or services used for investment not yet credited and the remaining tax amount is three hundred million Vietnam dong or more.
2. Business establishments that export goods or services in a month or a quarter are entitled to value-added tax refund on a monthly or quarterly basis if they have a uncredited input value-added tax amount of three hundred million Vietnam dong or more.
3. Business establishments that pay value-added tax according to the tax credit method are entitled to value-added tax refund if upon ownership transformation, enterprise transformation, merger, consolidation, separation, split, dissolution, bankruptcy or operation termination, they have an overpaid value-added tax amount or have some input value-added tax amount not yet fully credited.
4. Foreigners and overseas Vietnamese holding passports or entry papers granted by competent foreign agencies are entitled to tax refund for goods purchased in Vietnam and carried along when leaving the country.
5. The value-added tax refund for programs and projects using non-refundable official development assistance (ODA) or non-refundable aid or humanitarian aid is stipulated as follows:
a/ Owners of programs and projects or principal contractors or organizations designated by foreign donors to manage programs and projects using non-refundable official development assistance are entitled to the refund of value-added tax already paid on goods and services purchased in Vietnam for such programs and projects;
b/ Organizations in Vietnam using non-refundable aid and humanitarian aid of foreign organizations and individuals to buy goods and services used in non-refundable aid and humanitarian aid programs and projects in Vietnam are entitled to the refund of value-added tax on such goods and services.
6. Subjects enjoying diplomatic preferences and immunities in accordance with the law on diplomatic preferences and immunities are entitled to the refund of value-added tax amounts indicated on added value invoices or payment documents that indicate payments prices inclusive of value-added tax.
7. Business establishments possessing value-added tax refund decisions issued by competent agencies in accordance with law, and cases eligible for value-added tax refund under treaties to which the Socialist Republic of Vietnam is a contracting party.”
Article 2.
1. This Law takes effect on January 1, 2014, excluding Clauses 2 and 3 of this Article.
2. To apply the tax rate of 5% on selling, leasing and leasing-purchasing social houses specified in Clause 3, Article 1 of this Law from July 1, 2013.
3. To reduce by 50% the value-added tax rate of 10% on selling, leasing, leasing and purchasing commercial houses being completed apartments with a floor area of below 70 m2 each and the selling price of below VND 15 million/m2 each, from July 1, 2013, through June 30, 2014.
4. The Government shall detail and guide the implementation of articles and clauses of this Law as assigned.
This Law was passed on June 19, 2013, by the XIIIth National Assembly of the Socialist Republic of Vietnam at its fifth session.-
Chairman of the National Assembly
NGUYEN SINH HUNG
Vietnamese
Law 31/2013/QH13 DOC (Word)
Law 31/2013/QH13 PDF (Original)
