Circular No. 83/2014/TT-BTC dated June 26, 2014, guiding the application of value-added tax according to Vietnam’s list of imports

Số hiệu: 83/2014/TT-BTC Nơi ban hành: Bộ Tài chính Ngày ban hành: 26/06/2014 Ngày công báo: Chưa rõ Ngày công báo: Chưa rõ
Loại văn bản: Thông tư Người ký: Đỗ Hoàng Anh Tuấn Ngày hiệu lực: 10/08/2014 Số công báo: Đang cập nhật Tình trạng: Còn hiệu lực

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THE MINISTRY OF FINANCE
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THE SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
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No. 83/2014/TT-BTC

Hanoi, June 26, 2014

 

CIRCULAR

GUIDING THE APPLICATION OF VALUE-ADDED TAX ACCORDING TOVIETNAM’S LIST OF IMPORTS

Pursuant to June 3, 2008 LawNo. 13/2008/QH12 on Value-Added Tax and June 19, 2013 Law No. 31/2013/QH13Amending and Supplementing a Number of Articles of the Law on Value-Added Tax;

Pursuant to the Government’sDecree No. 209/2013/ND-CP of December 18, 2013, detailing and guiding a numberof articles of the Law on Value-Added Tax;

Pursuant to the Government’sDecree No. 06/2003/ND-CP of January 22, 2003, prescribing the classification ofimports and exports;

Pursuant to the Government’sDecree No. 215/2013/ND-CP of December 23, 2013, defining the functions, tasks,powers and organizational structure of the Ministry of Finance;

At the proposal of the directorof the Tax Policy Department;

The Minister of Financepromulgates the Circular guiding the application of value-added tax accordingto Vietnam’s list of imports.

Article 1. Scope of regulation

This Circular guides theapplication of value-added tax (VAT) rates to goods at the stages ofimportation, production, trading and consumption in Vietnam according toVietnam’s list of imports.

Article 2. Subjects of application

1. Organizations and individualsimporting, producing or trading in VAT-liable goods.

2. Tax administration agencies andrelated organizations and individuals.

Article 3. VAT tariff

The VAT tariff promulgatedtogether with this Circular comprises:

1. The VAT tariff detailedaccording to 8-digit headings and goods descriptions according to Vietnam’slist of imports promulgated together with the Ministry of Finance’s CircularNo. 156/2011/TT-BTC of November 14, 2011, and added with the item “Particular”with descriptions of specifications according to names of goods liable or notliable to VAT specified in the Value-Added Tax Law and the Law Amending andSupplementing a Number of Articles of the Value-Added Tax Law (belowcollectively referred to as the Value-Added Tax Law) and guiding legaldocuments.

2. VAT rates

a/ Mark (*) in the tax rate columnin the VAT tariff denotes commodity items not liable to VAT.

For example: The lines forpure-bred breeding horses (sub-heading 0101.21.00) and carriages for disabledpersons (sub-headings 8713.10.00 and 8713.90.00) have mark (*) in the tax ratecolumn. This means that commodity items under these 3 sub-headings are notliable to VAT.

b/ Mark (5) in the tax rate columnin the VAT tariff denotes commodity items subject to the VAT rate of 5% at allstages of importation, production, processing and trading (including cases inwhich enterprises or cooperatives that pay VAT by the credit method sellpreliminarily processed rubber latex, preliminarily processed pine resin orpreliminarily processed cotton to other enterprises or cooperatives at thestage of trading).

For example: The line forpreliminarily processed natural rubber latex (heading 40.01) has mark (5) inthe tax rate column. This means that such goods item is subject to the VAT rateof 5% at all stages of importation, production and trading. Even in case anenterprise or a cooperative that pays VAT by the credit method sellspreliminarily processed natural rubber latex to another enterprise orcooperative at the stage of trading, such goods item is still subject to theVAT rate of 5%.

c/ Mark (*, 5) in the tax ratecolumn in the VAT tariff denotes commodity items not liable to VAT at thestages of self-production, fishing for sale and importation, but subject to theVAT rate of 5% at the stage of trading, except the cases specified at Point b,Clause 3, Article 4 of this Circular.

d/ Mark (10) in the tax ratecolumn in the VAT tariff denotes commodity items subject to the VAT rate of 10%at all stages of importation, production, processing and trading.

For example: The line for bathtub(sub-heading 3922.10.10) has mark (10) in the tax rate column. This means thatsuch goods item, subject to the VAT rate of 10% at the stage of importation, isalso subject to the VAT rate of 10% at the stages of production, processing andtrading.

e/ Mark (*, 10) in the tax ratecolumn in the VAT tariff denotes the commodity item of imported gold in theform of bar or ingot not yet fashioned into fine-art articles, jewelry or otherproducts (heading 71.08), which is not liable to VAT at the stage ofimportation but liable to VAT at the stages of production, processing andtrading with the tax rate of 10%.

Article 4. General guidance on the application of VAT rates according to theVAT tariff

1. For goods which are not liableto VAT or to be subject to the VAT rate of 5% or 10% as specified in theValue-Added Tax Law and guiding documents, the provisions of such documentsshall apply; particularly, cultivation, husbandry, aquatic and marine products;medical equipment or instruments must comply with the provisions of Clauses 3,4and 5, Article 4 of this Circular.

For example: According to the VATtariff, heading 87.05 “special-purpose motor vehicles, other than thoseprincipally designed for the transport of persons or goods (for example, breakdownlorries, crane lorries, fire engines, concrete-mixer lorries, road-sweeperlorries, spraying lorries, mobile workshops, mobile radiological units)” isspecified to be subject to the VAT rate of 10%, so all imports under heading87.05 are liable to the VAT rate of 10%. However, in case a vehicle underheading 87.05 is determined as military equipment exclusively used for nationaldefense and security purposes as prescribed Clause 18, Article 5 of theValue-Added Tax Law, it will not be liable to VAT.

2. The VAT rate specified for each8-digit sub-heading shall apply to all goods items under such sub-heading,except those under the 4-digit heading concerned with their names specified atthe item “Particular” which are subject to the VAT rate specified at the item“Particular”.

For example: “Rulers” undersub-heading 9017.20.10 are subject to the VAT rate of 10%, but “rulers used forteaching and learning” under heading 90.17 are subject to the VAT rate of 5% asspecified at item “Particular” of heading 90.17.

3. The VAT rates on cultivationproducts (plant products and products from plants); husbandry products(livestock products and products from livestock, including also offal and otherbyproducts obtained from slaughtered animals); forest, aquatic and marineproducts (from natural or planted forests) specified in Chapters 1 thru 12 andChapter 18 of the VAT tariff promulgated together with this Circular areapplied as follows:

a/ The tax rate (*, 5) specifiedin the VAT tariff promulgated together with this Circular shall apply toproducts not yet processed into other products or just preliminarily processedby ordinary methods, including those cleaned, sun-dried, heat-dried, pitted,stemmed, cut or ground (except ground products defined in Chapters 9, 10, 11and 12 of the VAT tariff promulgated together with this Circular), chopped,husked, broken, polished, glazed, preserved in airtight boxes, or ordinarilypreserved such as cold-preserved (frozen or chilled), preserved with sulfurdioxide, impregnated with preservative chemicals, preserved with salt (salted,soaked in bittern), soaked in sulfur solution or other preservative solutionsor otherwise ordinarily preserved, except those specified at Point b of thisClause.

b/ The VAT rate applicable tounprocessed or preliminarily processed cultivation, husbandry or aquaticproducts, and fresh or raw foods at the stage of trading is as follows:

b.1/ Enterprises and cooperativesthat pay VAT by the credit method and sell unprocessed or preliminarilyprocessed cultivation, husbandry or aquatic products, and fresh or raw foods toother enterprises and cooperatives at the stage of trading are not required todeclare, calculate and pay VAT. In value-added invoices, they shall writeselling prices being VAT-exclusive prices and cross out the VAT rate and VATamount lines.

For example: Material shrimps(cleaned, whole or headless, peeled, back-cut, deveined, straight-pressed, putin trays, vacuumed and chilled); fresh cuttlefishes (cleaned, classified, cutin pieces, put in trays and frozen); fish fillets, frozen shrimps and fishes;cashew nuts (sun-dried, screened, steamed, cut and split, heat-dried, huskedand fumigated); paddy already milled and husked into rice, polished rice;discarded products and byproducts of cultivation, husbandry or aquatic productssuch as broken rice, rice husk and bran, shrimp heads and shells, fish headsand bones, offal and discarded products obtained from slaughtered animals andfresh grease which have not yet been processed into other products or have justbeen preliminarily processed by ordinary methods are not subject todeclaration, calculation and payment of VAT at the stage of trading.

b.2/ Business households andindividuals, enterprises, cooperatives and other economic organizations thatpay VAT by the direct method and sell unprocessed or preliminarily processedcultivation, husbandry and aquatic products, and fresh and raw foods shalldeclare, calculate and pay VAT at the stage of trading at the rate of 1 % ofturnover.

For example: Food company B paysVAT by the credit method. If the company imports or purchases rice directlyfrom rice farmers, such rice is not liable to VAT at the stage of importationor purchase.

In case company B sells such riceto import-export company c, it shall not be required to declare, calculate andpay VAT on the rice quantity sold to company c.

In case company B sells such riceto limited liability company D (which produces rice vermicelli and noodle), itshall not be required to declare, calculate and pay VAT on the rice quantitysold to company D.

In value-added invoices made andhanded to companies c and D, company B shall clearly write the selling priceswhich are VAT-exclusive prices and cross out the VAT rate and VAT amount lines.

In case company B sells such ricedirectly to consumers, it shall declare and pay VAT at the rate of 5%.

c/ Products which have not yetbeen preliminarily processed by ordinary methods as prescribed at Point a ofthis Clause shall be regarded as processed products and subject to the VAT rateof 10% at all stages of importation, production, processing and trading.

4. Cultivation, husbandry andaquatic products which have not yet been processed into other products or havejust been preliminarily processed by ordinary methods sold by producing orfishing individuals and organizations themselves or imported for use as feedfor cattle, poultry and other domestic animals (collectively referred to asanimal feed) are not liable to VAT under Clause 1, Article 5 of the Value-AddedTax Law.

For example: Unprocessed rice,maize, potato, cassava and wheat (including also those used as animal feed)which are sold by producers or imported shall not be liable to VAT (the VATrate of 5% shall not apply in all stages as for animal feed of other kinds).

5. Medical equipment andinstruments, including special-use medical machinery and instruments such asscanners, screeners and radiography machines for medical examination andtreatment; devices and instruments used exclusively in surgery and woundtreatment; ambulances; blood pressure and cardiovascular meters, bloodtransfusion tools; syringes and needles; contraceptive devices and otherspecial-use medical equipment, must comply with the VAT tariff promulgatedtogether with this Circular.

Article 5. Organization of implementation

1. This Circular takes effect onAugust 10, 2014.

2. This Circular replaces theMinistry of Finance’s Circular No. 131/2008/TT-BTC of December 26, 2008,guiding the application of VAT rates according to the Preferential ImportTariff; Circular No. 74/2009/TT-BTC of April 13,2009, amending Circular No.131/2008/TT-BTC; and Circular No. 84/2009/TT-BTC of April 28,2009, amendingCircular No. 131/2008/TT-BTC;

3. In the course of implementationof this Circular, if there is any problem or inconsistency with regard to theapplication of VAT to a commodity item when it is imported and when it isdomestically produced, traded or consumed, the declaration and calculation of VATat the stage of importation must comply with this Circular, and at the sametime, organizations, individuals, tax offices and customs offices shallpromptly report the case to the Ministry of Finance for guidance and uniformimplementation.-

 

 

FOR THE MINISTER OF FINANCE
DEPUTY MINISTER




Do Hoang Anh Tuan

 


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