Công văn 11393/BTC-TCT

To: JTEC Hanoi Co., Ltd
(Address: Lot 14, Thang Long Industrial Park, Dong Anh, Hanoi)

In reply to the Official Dispatch No. JTEC/010510 dated May 28, 2010 of JTEC Hanoi Co., Ltd on VAT refund to enterprises before being converted to export processing enterprises, the Ministry of Finance gives some opinions as follows:

On December 22, 2009, the Ministry of Finance issued an Official Dispatch No. 17924/BTC-TCT to guide enterprises how to deal with excess input VAT credits before being converted to export processing enterprises. To be specific:

 "Where an enterprise, in the course of doing business or making investment and having not earned revenue, proceeds the conversion to an export processing enterprise and it has excess input VAT credits associated with input assets, goods and services (including land rents) in the pre-conversion period and such assets, goods and services keep serving the operation of the export processing enterprise, this enterprise shall be entitled to a refund of the excess input VAT credits in the pre-conversion period.

The enterprise must carry out procedures for tax statement, determination of VAT liabilities in the pre-conversion period”.

The JTEC Company, upon the registration to apply for investment certificate, registered the project objective that 100% of products manufactured will be exported, however, the investment certificate No. 012043000050 dated July 18, 2007 issued by the Management Board of industrial parks and export-processing zones in Hanoi does not specify that the Company is eligible for regulations pertaining to export-processing zones as per the law.  On December 12, 2007, the Management Board of industrial parks and export-processing zones in Hanoi issued the first modified investment certificate to the Company, supplementing that: The Company is eligible for regulations pertaining to export-processing zones as per the law. Accordingly, from the incorporation date to the date on which the first modified investment certificate was issued, JTEC Company has not been regarded as an export processing enterprise.

If JTEC Co., Ltd, in the pre-conversion period, has input VAT on construction of buildings (according to 02 VAT invoices made by the construction contractor and gave to the Company after the Company became an export processing enterprise), the refund of input VAT which has been paid shall be considered.

Regarding refund claim: The refund claim shall be prepared in accordance with Point 9 Section I Part G of Circular No. 60/2007/TT-BTC on guidelines for tax administration, refund claims applicable to taxpayers engaging in consolidation, division, dissolution, bankruptcy, ownership conversion, shutdown, in which the document issued by the competent authority to certify the Company as an export processing enterprise (investment certificate or modified investment certificate specifying the business entity as export processing enterprise) shall be replaced with the decision of competent authority on consolidation, division, dissolution, bankruptcy, ownership conversion, shutdown.

Since the date on which the Company becomes an export processing enterprise, the Company shall comply with regulations on export processing enterprises in terms of VAT.

The difficulties that arise during the implementation must be reported to the Department of Taxation of Hanoi City.