Official Dispatch 558/TCT-CS 2024 regarding value-added tax policies

               To:

- Tax Department of Khanh Hoa province;

- Tax Department of Binh Duong province;

- Tax Department of Thanh Hoa province;

- Tax Department of Ha Nam province;

- Tax Department of Binh Phuoc province;

- Tax Department of Bac Ninh province;

- Tax Department of Ho Chi Minh City.

The General Department of Taxation has received Official Dispatches from the Tax Departments of Khanh Hoa province, Thanh Hoa province, Ha Nam province, Binh Duong province, Bac Ninh province, Ho Chi Minh City and Binh Phuoc province, regarding value-added tax (VAT) policies applicable to the on-spot import and export, and has the following comments:

Pursuant to Clauses 1 and 2 Article 9 of the Ministry of Finance’s Circular No. 219/2013/TT-BTC dated December 31, 2013, on tax rate of 0%;

Pursuant to Clause 2 Article 17 of the Ministry of Finance's Circular No. 219/2013/TT-BTC dated December 31, 2013, on conditions for input VAT credit and refund in some cases in which goods are regarded as exports.

Pursuant to Clause 1 Article 35 of the Government’s Decree No. 08/2015/ND-CP dated January 21, 2015, detailing, and providing measures to implement, the Customs Law; Article 86 of the Ministry of Finance’s Circular No. 38/2015/TT-BTC dated March 25, 2015, providing regulations on customs procedures; customs inspection and supervision, import and export duties, and tax administration applicable to exported goods and imported goods, providing guidance on goods imported and exported on the spot.

On July 12, 2023, the General Department of Customs issued Official Dispatch No. 3622/TCHQ-GSQL, responding issues relating to foreign traders without presence in Vietnam.  Accordingly, based on the provisions of Clause 2 Article 3 of the Government’s Decree No. 90/2007/ND-CP dated May 31, 2007, providing for the import right and export right in Vietnam of foreign traders without presence in Vietnam, and Clause 5 Article 3 of the Law on Foreign Trade Management No. 05/2017/QH14 dated June 12, 2017: if through determination found that the foreign trader has invested and conducted business in Vietnam according to the forms provided in the law on investment, commerce, enterprises; has representative offices or branches in Vietnam in accordance with the law on commerce, enterprises, then he/she shall not be considered as a foreign trader without presence in Vietnam.

In such case, goods purchased and sold between Vietnamese enterprises and that foreign trader without presence in Vietnam and designated by the foreign trader to deliver to other enterprises in Vietnam shall not be considered as goods imported/exported on the spot as prescribed at Point c Clause 1 Article 35 of the Government’s Decree No. 08/2015/ND-CP dated January 21, 2015, and Point c Clause 1 Article 86 of the Ministry of Finance’s Circular No. 38/2015/TT-BTC dated March 25, 2015.

In case the customs office determines that the enterprise made the on-spot export declarations in contravention of the provisions of Point c Clause 1 Article 35 of Decree No. 08/2015/ND-CP, the tax office shall not refund tax due to failure to satisfy the conditions on customs declarations as prescribed.

Tax Departments shall coordinate with relevant customs offices and, based on the VAT law, relevant laws on goods exported on the spot and actual conditions of the units, provide specific instructions.

The General Department of Taxation hereby informs Tax Departments for implementation./.