CIRCULAR

AMENDING AND SUPPLEMENTING A NUMBER OF POINTS REGARDING REGULATIONS ON INVOICES AND VOUCHERS RELATED TO GOODS CIRCULATED ON THE MARKET

Pursuant to the Law on Value Added Tax and the Law on Enterprise Income Tax.
Pursuant to the Government Office’s Notice No.110/TB-VPCP of June 2, 1998 on the Prime Minister’s conclusions at the conference reviewing the combat against smuggling through the northern borderlines and in the northeastern sea area.
Basing itself on the localities’ and enterprises’ reports on a number of problems arising in the course of implementation of the said Regulations, the Ministry of Finance hereby provides the following amendments and supplements to a number of points in Circular No.73-TC/TCT of October 20, 1997 and Circular No.92/1997/TT-BTC of December 25, 1997 concerning the regulations on invoices and documents related to goods circulated on the market:

1. To add new invoices and documents for goods circulated on the market:

a/ To add to Point 3, Section I, Circular No.73-TC/TCT of October 20, 1997 the following invoices and vouchers for goods circulated on the market:

+ Added value invoices.

+ Receipts of value added tax and enterprise income tax for the circulation.

b/ To add to Point 1, Section I, Circular No.73-TC/TCT of October 20, 1997 the following:

- For the purchase of liquidated properties of administrative or non-business agencies, decisions on the sale of properties of such administrative or non-business agencies are required.

- For the purchase of confiscated goods and/or properties, decisions on the sale of the properties which have been confiscated for the State’s fund are required.

2. To add to Point 1, Section A, Part II of Circular No.73-TC/TCT of October 20, 1997: the regulations on invoices and vouchers for a number of cases as follows:

a/ For goods delivered to exhibition-cum-fair: There must be an internal transfer order and a delivery bill-cum-internal transport paper. In cases where the goods are sold at the exhibition-cum-fair, the concerned establishment shall have to issue added value invoices or sale invoices to the customers. The invoices used for the sale of goods are those bought by the establishment at the tax agency directly managing it. The establishment’s turnover from the sale of goods at the exhibition-cum-fair must be declared for tax payment at the tax agency directly managing it.

b/ For goods being gifts or donations, the added value invoices or sale invoices must be issued.

c/ For goods on bailment for sale, the added value invoices or sale invoices must be issued to the bailee;

d/ For goods consigned for export, the added value invoices or sale invoices of the goods consignor are required.

e/ For goods consigned for import, the business establishment receiving those goods must get added value invoices, issued by the consignee.

f/ A business establishment that purchases goods in big quantity and have to transport them in many batches shall, for each batch of transportation, have to request the seller to issue an added value invoice or sale invoice.

3. To replace Point 4, Section A, Part II of Circular No.73-TC/TCT with the following:

For goods transferred among warehouses (including those located outside a province or centrally-run city), an internal transfer order and a delivery bill-cum-internal transport paper are required.

For goods transferred internally from a production and/or business establishment to its dependent branches and/or shops for sale in the same locality (province or centrally-run city), an internal transfer order and a delivery bill-cum-internal transport paper are required. For goods transferred to branches and/or shops in other localities (provinces or centrally-run cities) for sale, an added value invoice or sale invoice is required.

4. To add to Point 7, Section B, Part II of Circular No.73-TC/TCT the following:

As for import goods purchased at border markets and transported by business organizations and/or individuals into the local market for sale, besides the sale invoice issued by the goods seller, an extract of the import goods declaration made according to Decision No.172/1998/QD/TCHQ of June 20, 1998 of the General Director of Customs on the making of extracts of import goods declarations is required.

5. On economic contracts:

To annul the stipulations in Circular No.73-TC/TCT of October 20, 1997 and Circular No.92/1997/TT-TBC of December 25, 1997 regarding the conditions: Enterprises, when transporting goods, must bring along economic contracts. As for the delivery of raw materials and materials for processing, a processing contract is still required (the original or the copy certified as the duplicate of the concerned enterprise).

6. Handling of violations:

a/ To annul phrases: "turnover tax and profit tax for the circulation" in Sections A and B, Part III of Circular No.73-TC/TCT and replace them with the following new ones: "value added tax and enterprise income tax at the circulation stage".

b/ To replace Point 3, Section A, Part III of Circular No.73-TC/TCT with the following:

Acts of buying, receiving, not fully using or putting into production and/or consumption goods and/or supplies without enough valid invoices and vouchers shall all be considered acts of evading tax and subject to administrative sanctions in the field of taxation while the arrears of value added tax and enterprise income tax for circulation shall be collected, which shall be calculated according to the market prices at the time of goods inspection (for goods transported en route) or according to the goods� value as reflected in accounting books of the concerned establishment.

c/ To replace Point 3, Section B, Part III of Circular No.73-TC/TCT with the following:

Import goods bought for trading without valid invoices and vouchers shall all be considered smuggled goods, which shall be subject to administrative sanctions in the field of taxation and confiscated.

For lots of import goods bought from business organizations and/or individuals in border provinces with valid invoices and vouchers, which, through inspection and control, are detected as having unlawful origins, the counter-examination shall be conducted with regard to organizations and/or individuals that have issued invoices and/or documents related to the lots of goods. If the business organizations and/or individuals that have issued sale invoices for the lots of goods fail to produce invoices and/or vouchers proving the lawful origin of the sold lots of goods, such organizations and/or individuals shall be subject to administrative sanctions in the field of taxation and pay an amount of money corresponding to the value of the illegal goods already sold at the time of violation.

d/ Business organizations and individuals buying import goods at border markets without enough invoices and vouchers stipulated in Point 4 of this Circular shall all be considered smuggled goods, be subject to administrative sanctions in the field of taxation and have their goods confiscated.

e/ Business organizations and/or individuals buying the liquidated properties of administrative and/or non-business agencies, or goods and/or properties which have been confiscated due to the lack of lawful documents as stipulated in Point 1b in this Circular shall be handled as follows:

For home-made goods, they shall have to pay the value added tax and enterprise income tax for the circulation thereof.

For import goods, they shall be subject to administrative sanctions in the field of taxation and have their goods confiscated.

f/ To annul the stipulations on the handling of business organizations and/or individuals that transport goods without economic contracts. As for the transport of materials and raw materials for processing without processing contracts, the value added tax and enterprise income tax for the circulation thereof shall be collected.

This Circular takes effect as from February 20, 1999. The earlier provisions of Circular No.73-TC/TCT of October 20, 1997 of the Ministry of Finance which are contrary to the amendments and supplements in this Circular are now annulled.

In the course of implementation, if any problem arises, it should be promptly reported to the Ministry of Finance for study and settlement.