Công văn 4078/TCT-KK

To: Yen Bai Provincial Tax Office

In response to the Yen Bai Provincial Tax Office’s Official Letter No. 949/CT-THNVDT dated June 13, 2008, regarding the issuance of invoices, tax declaration and payment with respect to informal training activities in public schools, the General Department of Taxation gives the following opinions:

Pursuant to Section D, Part III of the Ministry of Finance’s Circular No. 63/2002/TT-BTC of July 24, 2002, guiding the implementation of the law on fees and charges, and Joint Circular No. 46/2001/TTLT/BTC-BGD-DT of June 20, 2001, of the Ministry of Finance and the Ministry of Education and Training, guiding the management of the collection and spending of school fees for informal training activities in public schools and training institutions, the Ministry of Finance has sent all Provincial Tax Offices Official Letter No. 12518/BTC-TCT of September 18, 2007, providing guidance on receipts for fees and charges as follows:

“… informal education activities are not entitled to state funding and must use revenues to cover expenses on their own. School fees collected from informal education activities thus are not state budget fees, therefore training institutions shall issue invoices to learners when collecting school fees in accordance with the Ministry of Finance’s Circular No. 120/2002/TT-BTC of December 30, 2002, guiding the implementation of the Government's Decree No. 89/2002/ND-CP of November 7, 2002, prescribing the printing, issuance, use and management of invoices, and shall declare and pay taxes under the tax law.”

Under the above guidance, public training institutions engaged in informal education activities, which are not entitled to state funding and must use revenues to cover expenses on their own, shall issue invoices and declare and pay taxes for these activities, specifically as follows:

1. Invoice issuance: When collecting school fees, training institutions shall issue invoices to learners under Section VI, Part B of Circular No. 120/2002/TT-BTC of December 30, 2002.

2. Tax declaration and payment:

- Value-added tax: Under Point 1.11, Section II, Part A of the Ministry of Finance’s Circular No. 32/2007/TT-BTC of April 9, 2007, guiding the implementation of the Government's Decrees No. 158/2003/ND-CP of December 10, 2003, No. 148/2004/ND-CP of July 23, 2004, and No. 156/2005/ND-CP of December 15, 2005, detailing the implementation of the Value-Added Tax Law and the Law Amending and Supplementing a Number of Articles of the Value-Added Tax Law, training (teaching, vocational training) activities are not subject to value-added tax.

- Business income tax: Training institutions shall declare income tax in accordance with Section III, Part B of the Ministry of Finance’s Circular No. 60/2007/TT-BTC of June 14, 2007, guiding the implementation of, a number of articles of the Tax Administration Law, and the Government's Decree No. 85/2007/ND-CP of May 25, 2007, detailing the implementation of the Tax Administration Law.

The General Department of Taxation informs Yen Bai Provincial Tax Office for information and implementation.