CIRCULAR

GUIDING THE APPLICATION OF THE LAW ON VALUE ADDED TAX (VAT) TO DIPLOMATIC MISSIONS, CONSULAR OFFICES AND REPRESENTATIVE OFFICES OF INTERNATIONAL ORGANIZATIONS IN VIETNAM

In order to create favorable conditions for and meet the needs of the work and daily life of subjects enjoying the privileges and immunities under Vietnamese laws and in compliance with the international conventions which Vietnam has signed or acceded to;
Pursuant to the Government’s Decree No. 28/1998/ND-CP of May 11, 1998 detailing the implementation of the Law on Value Added Tax;
Pursuant to the Government’s Decree No. 73/CP of July 30, 1994 detailing the implementation of the Ordinance on the privileges and immunities for foreign diplomatic missions, consular offices and representative offices of international organizations in Vietnam;
Pursuant to the Prime Minister’s Decision No. 205/1998/QD-TTg of October 19, 1998 promulgating the Regulation on duty-free shops;
After consulting the Ministry for Foreign Affairs, the Ministry of Trade and the General Department of Customs, the Ministry of Finance hereby guides the implementation of the value added tax privileges and immunity as follows:

I. SUBJECTS ENTITLED TO VAT IMMUNITY

1. Foreign diplomatic missions and consular offices, and representative offices of international organizations in the United Nations system, which are based in Vietnam (hereafter collectively referred to as the representative offices) and heads of such representative offices shall enjoy the VAT privileges and immunity for commodities and services imported or purchased on the Vietnamese market, including:

- Services of leasing houses for use as headquarters of the representative offices and residences of the heads of such representative offices.

- Electricity and water for daily use by headquarters of the representative offices and residences of the heads of such representative offices.

- Telephone, facsimile and services of installation thereof (including mobile phone).

- Petrol or diesel for the representative offices’ cars which bear diplomatic number plates (NG), not more than 400 liters/01 month/01 car.

- Commodities and services used for the construction, renovation, maintenance and/or repair of houses being the sending countries’ assets which are used as headquarters of the representative offices or residences of the heads of such representative offices.

- Office facilities and equipment for head-quarters of the representative offices and residences of the heads of such representative offices.

- Commodities imported or purchased in the country as specified in Circular No. 04/TTLB of February 12, 1996.

- Some other essential commodities purchased at licensed duty-free shops.

2. Diplomatic and consular officials, officials of international organizations, and administrative and technical personnel of the representative offices shall enjoy VAT privileges and immunity for commodities and services imported or purchased on the Vietnamese market, including:

- Commodity items imported or purchased in the country within the quantity limits prescribed in Joint Circular No. 04/TT-LB of February 12, 1996 of the Ministry of Trade, the Ministry for Foreign Affairs, the Ministry of Finance and the General Department of Customs.

- Petrol or diesel for the representative offices’ cars which bear diplomatic number plates (NG), not more than 300 liters/01 month/01 car.

- A number of other essential commodities purchased at licensed duty-free shops.

3. The representative offices of inter-governmental organizations outside the United Nations system and staff members thereof, as well as their family members living together with them in households shall also enjoy the VAT privileges and immunity under the international conventions which Vietnam has signed with such international organizations.

Representative offices of non-governmental organizations and staff members thereof, as well as their family members living together with them in households shall enjoy VAT privileges and immunity under the agreements signed between the Vietnamese Government and such organizations.

4. Cases where such assets as residential houses, automobiles and motorcycles are allowed to be assigned among diplomatic missions, consular offices and/or their staff members shall not be subject to VAT.

II. THE PROCEDURES FOR EFFECTING VAT IMMUNITY

Commodities and services on the above-specified list which are supplied by Vietnamese or foreign organizations and/or individuals licensed to conduct business activities in Vietnam to subjects mentioned at Points 1, 2 and 3 above shall not be subject to VAT. Representative offices and individuals mentioned at Points 1, 2 and 3 above shall not have to pay VAT when procuring such commodities and services.

When issuing invoices to subjects enjoying VAT privileges and immunity, business establishments shall use invoices which shall not state such tax but only the subjects eligible for VAT privileges and immunity.

Offices and individuals mentioned at Points 1, 2 and 3 above, when purchasing commodities and services, shall have to produce to the commodity sellers or service providers the certificates of subjects eligible for VAT privileges and immunity for such commodities and services, granted by the Protocol Department of the Ministry for Foreign Affairs (the originals or their copies with seals and signatures of the competent persons of the agencies entitled to diplomatic privileges and immunities).

A certificate of subject eligible for VAT privileges and immunity shall contain the following principal details:

- Name and address in Vietnam of the subject eligible for VAT privileges and immunity;

- Appellations of commodities and/or services immune from VAT;

- Names of business organizations and/or individuals supplying such commodities and/or services. In cases of imported commodities, such must be clearly stated;

- Serial number and date of the commodity and/or service supply contract signed between the supplier and the subject entitled to VAT privileges and immunity.

III. IMPLEMENTATION EFFECT

The provisions of this Circular shall apply to the subjects enjoying the diplomatic privileges and immunities on the principle of mutual benefits.

This Circular replaces Circular No. 43/1999/TT-BTC of April 20, 1999 and takes effect 15 days after its signing. Other regulations on taxation applicable to subjects enjoying the privileges and immunity which are not mentioned in this Circular shall still comply with the provisions of the current tax legislation and the guidance in Joint Circular No. 04/TTLB of February 12, 1996 of the Ministry for Foreign Affairs, the Ministry of Trade, the Ministry of Finance and the General Department of Customs.