Công văn 13804/BTC-TCT

To: Departments of Taxation of central-affiliated cities or provinces

Pursuant to Article 1 of the Law No. 106/2016/QH13 dated April 06, 2016 by the National Assembly on amendments to some articles of the Law on Value-added Tax, the Law on Special Excise Duty, and the Law on Tax Administration.

Pursuant to Clause 1 Article 1 of the Law on Tax Administration No. 21/2012/QH13 dated November 20, 2012 by the National Assembly on amendments to some articles of the Law on Tax Administration.

Pursuant to the Government’s Decree No. 100/2016/ND-CP dated July 01, 2016 on elaboration and guidelines for some articles of the Law on amendments to some articles of the Law on Value-added Tax, the Law on Special Excise Duty, and the Law on Tax Administration.

Pursuant to the Circular No. 130/2016/TT-BTC dated August 12, 2016 by Ministry of Finance guiding the implementation of the Government’s Decree No. 100/2016/ND-CP dated July 01, 2016 on elaboration and guidelines for some articles of the Law on amendments to some articles of the Law on Value-added Tax, the Law on Special Excise Duty, and the Law on Tax Administration.

Pursuant to the Circular No. 204/2015/TT-BTC dated December 21, 2015 by Ministry of Finance providing for the application of risk management in tax administration.

Pursuant to the Circular No. 99/2016/TT-BTC dated June 29, 2016 by Ministry of Finance on management of value-added tax refund.

Ministry of Finance, based on the said grounds and for the purposes of ensuring the management of the value-added tax (VAT) refund in conformity with prevailing regulations and managing the budget for VAT refund in ending months of 2016 according to the estimate approved by the National Assembly, requests Directors of Departments of Taxation of central-affiliated cities or provinces to thoroughly grasp and perform the following duties:

1. Provide sufficient and timely guidance for all enterprises in the province under the management of the Provincial Department of Taxation and tax officers for new and important contents of the Law No. 106/2016/QH13 dated April 06, 2016, the Government’s Decree No. 100/2016/ND-CP dated July 01, 2016, the Circular No. 130/2016/TT-BTC dated August 12, 2016, the Circular No. 204/2015/TT-BTC dated December 21, 2015 and the Circular No. 99/2016/TT-BTC dated June 29, 2016 by Ministry of Finance. To be specific:

- Exported goods and services: VAT shall not be refunded in cases where exports are not exported within a customs-controlled area as defined by the Customs Law and the Government's Decree No. 01/2015/ND-CP dated January 02, 2015 on the disposition of customs-controlled areas; goods are imported and exported afterwards; exports are natural resources and minerals without or after further processing into products whose prime cost is comprised of, by at least 51%, the total value of such natural resources and minerals plus the energy cost.

- Investment projects: VAT shall not be refunded in cases where the charter capital of an investment project has not been adequately contributed as registered; the investment project in a conditional business sector fails to satisfy all of business conditions as prescribed in the Law on Investment or fails to maintain the satisfaction of all business conditions during its operation; a natural resource or mineral extraction project is licensed from July 01, 2016 or a manufacturing project where total value of natural resources and/or minerals inclusive of energy cost makes up at least 51% of the product price;

- In case the input VAT accumulated during 12 months or four consecutive quarters has not been completely deducted, VAT shall be refunded to the taxpayer who has remaining deductible input VAT before the tax period of July, 2016 (if VAT is monthly declared) or before the tax period of the 3^rd Quarter of 2016 (if VAT is quarterly declared) and meets all of conditions for tax refund as regulated in Clause 1 Article 18 of Circular No. 219/2013/TT-BTC dated December 31, 2013 by Ministry of Finance.

2. With regard to applications for tax refund submitted before the tax refund period of July, 2016 or the 3^rd Quarter of 2016 in cases mentioned in Point 1 herewith, Provincial Departments of Taxation shall conduct tax inspection before refunding tax to applicants in conformity with changes in tax policies. Provincial Departments of Taxation must update the Tax Management System (TMS) with applications for tax refund and their tax inspection results in a timely and sufficient manner in order that the General Department of Taxation may keep supervision thereof before Provincial Departments of Taxation make decisions on tax refund.

The General Department of Taxation shall, for every 10 days, report to the Ministry of Finance of inspection results for refunding VAT to said taxpayers.

3. Provincial Departments of Taxation shall base on regulations in the Law No. 106/2016/QH13, the Law No. 21/2012/QH13 on tax management and their instructional documents to classify applications for VAT refund other than those regulated in Point 1 herewith into cases eligible for tax refund before inspection or cases subject to inspection before tax refund as regulated. Provincial Departments of Taxation must update the TMS with sufficient records related to tax refund to serve the processing of applications for tax refund by their departments; General Department of Taxation shall conduct automatic supervision on the TMS before decisions on tax refund are made by Provincial Departments of Taxation in order to ensure that the tax refund is given in proper and timely manner as regulated by laws.

Directors of Provincial Departments of Taxation are requested to strictly implement guidance herewith. Difficulties that arise during the implementation of this guidance should be reported to the Ministry of Finance or General Department of Taxation for consideration.