To: Toyota Tsusho Vietnam
(Address: 7^th floor of Sun Red River Building, 23 Phan Chu Trinh Str., Phan Chu Trinh ward, Hoan Kiem dist., Hanoi; MST: 0103171663)In response to document No. 500/PC-TCT dated May 20, 2015 sent by General Department of Taxation together with Official Dispatch No. 002/20150514/TTVN-CV dated May 14, 2015 of Toyota Tsusho Vietnam,

- Pursuant to Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance elaborating some Articles of the Law on Value-added tax and the Government's Decree No. 209/2013/NĐ-CP dated December 18, 2013.

+ Clause 20 Article 4:

“Article 4. Goods and services not subject to VAT

20. The goods forwarded through Vietnam’s territory; goods temporarily imported, re-exported; temporarily exported, re-imported, raw materials imported for manufacturing or export processing under contracts with foreign partners.

Goods and/or services traded between a foreign and a free trade zone or among free trade zones.

Free trade zones include: export processing zones, export processing companies, tax-suspension warehouses, bonded warehouses, special economic zones, commercial - industrial zones, and other economic zones established and provided with similar tax incentives as free trade zones according to Decisions of the Prime Minister. The transactions between a free trade zone and an external party are considered export/import …”.

+ Clause 7 and Clause 9 Article 14:

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7. Input VAT on goods and services serving the manufacture or sale of taxable goods and services mentioned in Article 4 of this Circular must not be deducted, except for the following cases: …".

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9. Input VAT that is not deductible shall be aggregated with costs to calculate corporate income tax, or aggregated with costs of fixed assets, except for the VAT on any purchase that costs 20 million VND or more without receipts for non-cash payments”.

+ Article 15 provides for conditions for input VAT deduction.

Point 2.1 of Appendix 04 of Circular No. 39/2014/TT-BTC providing instructions on issuing invoices of goods/services in some cases:

“2. In a number of specific cases, the invoices shall be raised as follows:

2.1. If a taxpayer applying invoice-based method is not liable to VAT or exempt from VAT, its invoice shall only state the price and tax rate; the VAT amount shall be left blank and stricken out.”

Pursuant to the aforementioned regulations, when Toyota Tsusho Vietnam imports goods or raw materials from abroad (Japan) and have them moved into Tien Son ICD (in Bac Ninh province) and then transferred their ownership at the bonded warehouse to a Vietnamese buyer:

- If the buyer is a Vietnamese enterprise (not an enterprise is a free trade zone), the transfer of ownership of goods in the bonded warehouse is considered a trade within a free trade zone, which is not subject to VAT.

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- When issuing a VAT invoice, only the selling price is required. The tax rate and VAT will be left blank and stricken out in accordance with Point 2.1 of Appendix 04 of Circular No. 39/2014/TT-BTC).

Please refer to Article 14 and Article 15 of Circular No. 219/2013/TT-BTC and Article 1 of Circular No. 26/2015/TT-BTC for instructions on input VAT deduction by Enterprise A (the buyer of goods at the bonded warehouse).

The conditions for delivery between Toyota Tsusho Vietnam and the buyer are outside the competence of tax authorities.

For your information and compliance./.

PP DIRECTOR
DEPUTY DIRECTOR




Mai Son