VietnameseOfficial Dispatch No. 4503/TCT-PCCS of December 09, 2005, regarding value added tax (VAT) on international transportation
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Official Dispatch No. 4503/TCT-PCCS of December 09, 2005, regarding value added tax (VAT) on international transportation
| Issuing body: | General Department of Taxation | Effective date: | Known Please log in to a subscriber account to use this function. Don’t have an account? Register here |
| Official number: | 4503/TCT-PCCS | Signer: | Pham Duy Khuong |
| Type: | Official Dispatch | Expiry date: | Updating |
| Issuing date: | 09/12/2005 | Effect status: | Known Please log in to a subscriber account to use this function. Don’t have an account? Register here |
| Fields: | Tax - Fee - Charge |
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Effect status: Known
THE MINISTRY OF FINANCE THE GENERAL DEPARTMENT OF TAXATION’S ------- | SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom – Happiness --------- |
No. 4503/TCT-PCCS | Hanoi, December 09, 2005 |
OFFICIAL LETTER
REGARDING VALUE ADDED TAX (VAT) ON INTERNATIONAL TRANSPORTATION
To: Hoang Gia International Transportation Limited Company
In reply to Official Letter No. 021105/RIM of November 8, 2005, of Hoang Gia International Transportation Limited Company, regarding VAT on international transport services, the General Department of Taxation gives the following opinions:
1. VAT on international transport activities:
Point 22, Section II, Part A of the Finance Ministry's Circular No. 122/2000/TT-BTC of December 29, 2000, and Point 23, Section II, Part A of the Finance Ministry's Circular No. 120/2003/TT-BTC of December 12, 2003, guiding the implementation of the Government's Decree No. 158/2003/ND-CP of December 10, 2003, which details the implementation of the VAT Law and the Law Amending and Supplementing a Number of Articles of the VAT Law stipulates: "International transportation includes transportation by foreign countries or domestic transportation business establishments engaged in cargo or passenger transportation from Vietnam to foreign countries or vice versa, or cargo transportation between foreign ports."
Based on the above-said guidance, on March 11, 2004, the General Department of Taxation issued Official Letter No. 639 TCT/PCCS responding to the Vietnam Investment Review on international transportation activities of Hoang Gia International Transport Limited Company. Accordingly, cargo transportation with package charges (for packing, domestic transportation and international transportation) from Vietnam to foreign countries or vice versa in the form of door-to-door, port-to-port or door-to-port is not subject to VAT. Hoang Gia International Transport Limited Company shall, therefore, not have the input VAT related to these international transportation activities credited or refunded but shall account it as the Company's business expenses.
2. Tax related to contractors:
According to Circular No. 05/2005/TT-BTC of January 11, 2005, guiding tax regimes applicable to foreign organizations without Vietnamese legal person status and foreign individuals doing business or earning incomes in Vietnam, where foreign-based agents, on Hoang Gia International Transport Limited Company's behalf, provide services of delivering goods to customers' homes in foreign countries, the charges earned by the foreign agents for such delivery shall be subject to business income tax (BIT).
Because the goods delivery agents are not present in Vietnam, Hoang Gia International Transport Limited Company shall declare and pay BIT on its agents' behalf under the guidance at Point 2, Section II, Part B, and Point 1, Section II, Part C, of the Finance Ministry's Circular No. 05/2005/TT-BTC of January 11, 2005.
The General Department of Taxation hereby notifies Hoang Gia International Transport Limited Company thereof for compliance.
FOR THE GENERAL DIRECTOR OF TAXATION DEPUTY GENERAL DIRECTOR Pham Duy Khuong |
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