On 12 August 2016, the Ministry of Finance issued Circular 130/2016/TT-BTC to provide guidance on Decree 100 and amend various tax Circulars.

1. Value Added Tax (“VAT”)

–         VAT refund regarding companies using credit method for VAT declaration:

In case companies have creditable input VAT incurred prior to July 2016 (for monthly VAT declaration) and quarter 3/2016 (quarterly declaration) which is eligible for VAT refund, the tax authorities shall proceed the claim for tax refund as prescribed by law;

–         VAT refund regarding investment projects:

+ VAT refund are not granted for an investment project of a company whose registered charter capital has not yet been completely contributed;

+ With regards to an investment project of a company that carries out business in a conditional business sector, the company is not entitled to apply for a VAT refund if the company has not been granted licences/ certificates for the conditional business, but may carry forward to following periods;

–         VAT refund regarding exported goods and services:

+ Companies shall offset the input VAT with output VAT first. The remaining input VAT on export goods/ services exceeding VND 300 million shall be refunded;

+ For companies that both export goods/ services and sell goods/ services domestically: Companies shall separately record input VAT on export goods/ services. In case the input VAT cannot be separated, input VAT relating to export goods/ services shall be allocated in accordance with the ratio of export revenue over total revenue in the period concerning.

The amount of input VAT relating to export goods/ services (meeting criteria for VAT refund) that can be refunded to companies must not exceed 10% of their export revenue.

+ VAT refund are not granted to companies that import goods and then export;

+ For exporters, the “VAT refund first, tax audit later” scheme is not available for companies which have violated any tax and customs regulation in recent years.

2. Special Consumption Tax (“SCT”)

–         Taxable price for SCT calculation purposes shall be the selling price of the manufacturer or importer. In case the selling price is not based on market price, tax authorities have the right to determine the taxable price;

–         For the purpose of calculating SCT on goods sold by manufacturer or an importer to any of the trading companies as mentioned below, the taxable price shall be at maximum 7% lower than the average selling price such trading companies charge:

+ Trading companies that have a relationship with the manufacturer or importer, i.e. a parent company, subsidiary company or affiliate companies of the same parent company;

+ Trading companies that have a related party relationship with the manufacturer or importer.

A related party relationship exists if a company directly or indirectly holds at least 20% of the investment capital of the other company.

3. Tax administration

–         For outstanding tax payment arising after 1 July 2016: The late payment interest is calculated at the rate of 0.03% per day over the late payment amount.

–         For outstanding tax payment arising before 1 July 2016 and not yet paid until 1 July 2016:

+ Period before 1 January 2015: 0.05% per day from the filing deadline date to the 90th day; 0.07% per day from the 91st day;

+ From 1 January 2015 to 30 Jun 2016: 0.05% per day;

+ From 1 July 2016: 0.03% per day.

This Circular takes effects from 01 July 2016.