Official Dispatch 3372/CTHN-TTHT Hanoi 2023 creation of VAT invoices

To: Makoto Sangyo Vietnam Co., Ltd

(Address: Room 310, V-Tower Building, No. 649 Kim Ma, Ngoc Khanh Ward, Ba Dinh District, Hanoi; TIN: 0105495134)

Responding to Official Dispatch No. 01-2022/MKT-CVHT of Makoto Sangyo Vietnam Co., Ltd. dated December 13, 2022, (hereinafter referred to as "Company") on tax policy issues, Hanoi Tax Department has comments as follows:

- Pursuant to the Government’s Decree No. 123/2020/ND-CP dated October 19, 2020, on invoices and documents:

+ In Article 4 providing for principles of creation, management and use of invoices and documents:

“Article 4. Principles of creation, management and use of invoices and documents

1. When selling goods or providing services, the seller must create an invoice to the buyer (including goods or services for promotion or advertising or used as samples; goods and services donated, granted, presented as gifts, exchanged or given as salary for employees and for internal consumption (except goods internally circulated for further production); and goods loaned, lent or returned); and must fill in all contents as required in Article 10 of this Decree; in case of using e-invoices, the seller must use the standardized data format provided by the tax agency as prescribed in Article 12 of this Decree.

…”

+ In Article 10 on contents of an invoice:

“Article 10. Contents of an invoice

…

5. Name, address and tax identification number of the buyer a) If the buyer is a business establishment that has a tax identification number, the buyer's name, address and tax identification number shown on the invoice shall be stated in the enterprise registration certificate, branch operation registration certificate, business household registration certificate, tax registration certificate, tax identification number notice, investment registration certificate, or cooperative registration certificate.

…”

- Pursuant to Clause 2, Article 1 of the Government’s Decree No. 146/2017/ND-CP dated December 15, 2017, amending and supplementing Clause 3, Article 10 of the Government’s Decree No. 209/2013/ND-CP dated December 18, 2013, detailing and guiding the implementation of a number of articles of the Value-Added Tax Law (amended and supplemented under the Government’s Decree No. 100/2016/ND-CP dated July 1, 2016):

“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.”

- Pursuant to Article 2 of the Ministry of Finance’s Circular No. 25/2018/TT-BTC dated March 16, 2018, amending and supplementing Clause 4, Article 18 of Circular No. 219/2013/TT-BTC (amended and supplemented under Circular No. 130/2016/TT-BTC) guiding tax refund for exported goods and services.

- Pursuant to the Ministry of Finance’s Circular No. 219/2013/TT-BTC dated December 31, 2013, guiding the implementation of the Law on Value-Added Tax and the Government’s Decree No. 209/2013/ND-CP of December 18, 2013, detailing and guiding a number of articles of the Law on Value-Added Tax.

+ In Article 16 on conditions for input VAT credit and refund for exported goods and services.

Pursuant to the above provisions, when selling goods, or providing services, the sellers must create invoices to deliver to the buyers and must fully and correctly record the contents as prescribed in Article 10 of the Government’s Decree 123/2020/ND-CP dated October 19, 2020.

If in a month (for monthly declaration) or a quarter (for quarterly declaration), a business establishment exports goods or services and the input VAT amount for exported goods or services not yet credited is VND 300 million or more, the business establishment is entitled to VAT refund on a monthly or quarterly basis, respectively; if it has 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 in accordance with Clause 2, Article 1 of the Government’s Decree No. 49/2022/ND-CP dated July 29, 2022.  Exported goods and services that satisfy the conditions and procedures prescribed in Article 16 of the Ministry of Finance’s Circular No. 219/2013/TT-BTC dated December 31, 2013, are eligible for input VAT credit and refund.

The Company is requested to base on the actual situation and compare with the above-mentioned legal documents to comply with regulations.

Any arising tax policy issues can be referred to in the guiding documents of Hanoi Tax Department posted on the website http://hanoi.gdt.gov.vn or contact with the Division of Inspection and Examination No. 2 for support and settlement.

Hanoi Tax Department hereby informs Makoto Sangyo Vietnam Co., Ltd. for implementation./.

For the Director General

The Deputy Director General

Nguyen Tien Truong