Công văn 138TCT/DNK

OFFICIAL LETTER

GUIDING TAX POLICIES

To: Provincial/municipal Tax Departments

The General Department of Taxation has recently received official letters from enterprises and provincial/municipal Tax Departments, inquiring about the VAT rate applicable to the installation of workshops from steel structures and the sale and installation of elevators. Concerning this issue, the General Department of Taxation gives the following opinions:

According to the provisions of Point 2.21, Point 3.14 and Point 3.27, Section II, Part B of the Finance Ministry’s Circular No. 120/2003/TT-BTC of December 12, 2003, guiding the implementation of the Government’s Decree No. 158/2003/ND-CP of December 10, 2003, detailing the implementation of the VAT Law and the Law Amending and Supplementing a Number of Articles of the VAT Law, sale of warehouse frames and metal structures; and elevators shall be subject to the VAT rate of 5%; while construction or installation activities shall be subject to the VAT rate of 10%.

For business establishments that sell the above-mentioned products and install them into construction works at a package price, the VAT rate applicable to sold goods (5%) shall apply.

Where the selling prices of products and the prices of installation or construction services are separately stated in the contracts, different tax rates shall apply to products and installation or construction services.

Where it is impossible to determine the selling prices of products and the prices of construction or installation services, the VAT rate of 10% shall apply.

The General Department of Taxation requests provincial/municipal Tax Departments, when checking tax calculations, to ask business establishments to produce economic contracts, inspect and compare the selling prices of products with the actually paid prices so as to correctly determine the VAT rates applicable to sold goods and services.