Công văn 4247/TCT-CS

To: Tax Offices of provinces and centrally run cities

On August 14, 2007, the General Department of Taxation issued Official Letter No. 3267/TCT-CS guiding the use of value-added tax (VAT) declaration forms under the Law on Tax Administration, we hereby further guide some points in this Official Letter as follows:

1. In case taxpayers make additional declarations or adjustments which, however, do not lead to an increase in the payable tax amount of the period with additionally declared or adjusted figures, they will not be required to pay any additional tax amount after making these additional declarations or adjustments, and a fine for late tax payment. They will only be sanctioned for acts of violation of tax procedures.

Example 1:

- In the tax period of February 2008, a taxpayer makes a VAT declaration containing a creditable VAT amount of VND 120 million to be carried forward to the subsequent period.

- On July 20, 2008, the taxpayer makes a VAT return for the tax period of June 2008 and concurrently makes an additional declaration and adjustment of VAT for the tax period of February 2008, correcting the error of double declaration of an input invoice with VND 50 million in input VAT.

- After taxpayer declares a decrease of VND 50 million in input VAT, its total payable VAT amount for February 2008 (the month with additionally declared or adjusted figures) is still inclusive of a creditable VAT amount of VND 70 million (VND 120 million - VND 50 million) or, in other words, the additional declaration and adjustment does not increase the payable VAT amount. So, the taxpayer will not have to pay any additional VAT amount after making the additional declaration and adjustment and any fine for late VAT payment.

2. If the additional declaration and adjustment leads to an increase in the payable VAT amount of the period with additionally declared or adjusted figures, the taxpayer shall pay the increased VAT amount and a fine for late VAT payment. The period for determining the fine amount for late VAT payment is counted from the 21st of the month following the month with additionally declared or adjusted figures to the date when the taxpayer pays the increased VAT amount into the state budget.

Example 2:

- In the tax period of February 2008, a taxpayer makes a VAT declaration containing a creditable VAT amount of VND 120 million to be carried forward to the subsequent period.

- On July 20, 2008, this taxpayer makes a VAT return for the tax period of June 2008 and concurrently makes an additional declaration and adjustment of VAT of the tax period of February 2008 correcting the error of omission of an output invoice with VND 150 million in output VAT.

- After the taxpayer declares an increase of VND 150 million in output VAT, its total payable VAT amount of the tax period of February 2008 will be VND 30 million (VND 150 million - VND 120 million). The taxpayer shall immediately pay the tax amount of VND 30 million into the state budget and a fine for late payment of the VAT amount of VND 30 million, which is calculated for the period from March 21, 2008, to the date of payment of additional VAT amount into the state budget.

Example 3:

- In the tax period of February 2008, a taxpayer makes a VAT declaration stating a payable VAT amount of VND 120 million.

- On July 20, 2008, the taxpayer makes a VAT return for June 2008 and concurrently makes an additional declaration and adjustment of VAT of the tax period of February 2008 correcting the error of omission of an output invoice with VND 50 million in output VAT.

- After the taxpayer declares an increase of VND 50 million in output VAT, the total payable VAT amount of the tax period of February 2008 will be VND 170 million (VND 120 million + VND 50 million). So, the taxpayer shall immediately pay the tax amount of VND 50 million into the state budget and a fine for late payment of the VAT amount of VND 50 million which is calculated for the period from March 21, 2008, to the date of payment of the additional VAT amount into the state budget.

Above is some guidance on additional declaration and adjustment of VAT under Official Letter No. 3267/TCT-CS of August 14, 2007. Local tax authorities should guide taxpayers in complying with the provisions and guidance of this Official Letter. Cases handled before the date of implementation guided in this Official Letter will not be reconsidered in light of this Official Letter. Any problems should be promptly reported by Provincial Tax Offices to the General Department of Taxation for uniform guidance.