Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the June 03, 2008 Law on Value-Added Tax;

Pursuant to the June 19, 2013 Law amending and supplementing a number of articles of Law on Value-Added Tax;

At the proposal of the Minister of Finance;

The Government promulgates Decree detailing and guiding implementation of several articles of Law on Value-Added Tax,

Chapter 1.

GENERAL PROVISIONS

Article 1. Scope of regulation

This Decree details and guides the implementation of several articles of the Law on Value-Added Tax and Law amending and supplementing a number of articles of Law on Value-Added Tax regarding tax payers, non-taxable objects, taxable price, tax rates, methods of tax calculation, tax credit, tax refund and places for tax payment.

Article 2. Tax payers

1. Value-added tax payers include organizations and individuals producing or trading in goods or services subject to value-added tax (below referred to as business establishments) and organizations and individuals importing goods subject to value-added tax (below referred to as importers).

2. Vietnam-based production and business organizations and individuals that purchase services (including services associated with goods) from foreign organizations without permanent establishments in Vietnam or overseas individuals not residing in Vietnam shall be value-added tax payers, unless they are not required to declare, calculate and pay value-added tax defined at Point b Clause 3 of this Article.

Permanent establishments and overseas individuals being non-residents at this Clause must comply with the laws on enterprise income tax and personal income tax.

3. Cases are not required to declare, calculate and pay value-added tax:

a) Organizations and individuals receive amounts involving compensation, awards, subsidies, money for transfer of emission right and other financial revenues.

b) Vietnam-based production and business organizations and individuals that purchase services from foreign organizations without permanent establishments in Vietnam or overseas individuals not residing in Vietnam including the following cases: Repair of means of transport, machinery or equipment (including supplies and spare parts); advertisement and marketing; investment and trade promotion; goods sale and service provision brokerage: or training; or share with foreign partners charges for international post or telecommunications services provided outside Vietnam.

c) The non-business organizations and individuals are not value- added tax payer upon selling assets.

d) Organizations and individuals that transfer investment projects for production of and trading in goods or services subject to value-added tax to enterprises or cooperatives.

dd) Cultivation, husbandry and aquatic products which have not yet been processed into other products or have been just preliminarily processed and sold to enterprises or cooperatives, except for case defined at Clause 1 Article 5 of the Law on value-added tax.

The Ministry of Finance shall guide specifically provisions at Clauses 2 and 3 of this Article.

Article 3. Non-taxable objects

Objects not liable to value-added tax shall comply with Article 5 of the Law on Value-Added Tax and Clause 1 Article 1 of Law amending and supplementing a number of articles of Law on Value-Added Tax.

1. Preliminarily processed products specified in Clause l, Article 5 of the Law on Value-Added Tax are products which have only been cleaned, dried, peeled, pitted, sliced, salted, frozen or otherwise ordinarily preserved.

2. Services stated at Clause 8, Article 5 of the Law on Value-Added Tax and Clause 1 Article 1 of Law amending and supplementing several articles of Law on Value-Added Tax are specified as follows:

a) Credit provision services include forms of:

- Loan provision;

- Discount andrediscount of negotiable instruments and other valuable papers;

- Guarantee;

- Financial leasing;

- Issue of credit cards;

- Domestically and internationally factoring;

- Sale of loan collateral:

- Provision of credit information in accordance with Law on State bank;

- Other forms of credit provision under law.

b) Services of loan provision by tax payers not being credit institutions;

c) Securities trading covers: Securities brokerage, securities dealing, securities issuance underwriting, securities investment consultancy, securities depository, management of securities investment funds, management of securities investment companies, management of securities investment portfolios, market organization services provided by stock exchanges or securities trading centers, services related to securities registered or deposited at the Vietnam securities depository Center, loan provision to perform depository transactions, advance payment of securities sale and other trading activities under the securities law.

d) Capital transfer covers the transfer of part or the whole of the invested capital amount, including the sale of enterprises to other enterprises for production and business; securities transfer; transfer of right to contribute capital and other forms of capital transfer under law.

dd) Debt sale

e) Trading in foreign currency.

g) Sale of collateral of debts of organizations in which State owns 100% of charter capital and are established by Government in order to handle bad debts of Vietnamese credit institutions.

3. Healthcare services specified in Clause 9, Article 5 of the Law on Value-Added Tax include transportation, test, screening, radiograph and blood and blood preparations used for patients.

4. Maintenance services of zoos, flower gardens, parks, street greeneries and public lighting; funeral services.

The Ministry of Finance shall guide specifically on non-taxable services specified at this Clause.

5. For the renovation, repair or construction of works specified in Clause 12, Article 5 of the Law on Value-Added Tax, which is funded with capital other than people's contributions (including contributed capital amount and financial supports of organizations and individuals) or humanitarian aid not exceeding 50% of the total capital used for those works, the whole value of the works is not subject to tax.

Social policy beneficiaries include: People with meritorious services under the law on people with meritorious services; social relief beneficiaries who enjoy state budget allowances; people classified as poor or living just above the poverty line; and other cases provided for by law.

6. Mass transit services specified in Clause 16, Article 5 of the Law on Value-Added Tax covers mass transit by bus or tramcar along routes within provinces or urban centers and in their vicinities as prescribed by competent state agencies.

7. Aircraft specified in Clause 17, Article 5 of the Law on Value-Added Tax and Clause 1 Article 1 of Law on amending and supplementing a number of articles of Law on Value-Added Tax covers also aircraft engines.

The Ministry of Planning and Investment shall assume the prime responsibility for  and collaborate with concerned agencies in, promulgating a list of machinery, equipment, accessories and supplies which can be manufactured at home as a basis for differentiating them from those which cannot be manufactured at home and need to be imported for scientific research and technological development activities; a list of machinery, equipment, spare parts, special-purpose means of transport and supplies which can be manufactured at home as a basis for differentiating them from those which cannot be manufactured at home and need to be imported for prospecting, exploring and developing oil and gas fields; a list of aircraft, drilling platforms and ships which can be manufactured at home as a basis for differentiating them from those which cannot be manufactured at home and need to be imported for the formation of enterprises' fixed assets or hired from foreign parties for production and business activities or for lease and sublease.

8. Special-purpose weapons and military equipment for security and defense purposes mentioned in Clause 18, Article 5 of the Law on Value-Added Tax which are specified by presiding over, and reaching agreement among the Ministry of Defense, the Ministry of Public Security and the Ministry of Finance.

9. Imported goods provided for in Clause 19, Article 5 of the Law on Value-Added Tax are specified as follows:

a) Goods imported as humanitarian aid or nonrefundable aid must be approved by competent State agencies.

b) Gifts for State agencies, political organizations, socio-political organizations, socio-political-professional organizations, social organizations, socio-professional organizations or people's armed forces units must comply with the law on gifts.

c) Quotas of goods imported as gifts for individuals in Vietnam must comply with the law on gifts.

d) Belongings of foreign organizations and individuals within diplomatic immunity quotas; and personal effects within duty-free luggage quotas.

dd) Goods and services sold to foreign organizations or individuals or international organizations for use as humanitarian aid, and non-refundable aid to Vietnam.

10. In case of transfer of technologies or intellectual property rights specified in Clause 21, Article 5 of the Law on Value-Added Tax which is accompanied by machinery or equipment transfer, the value of transferred technologies or intellectual property rights is not subject to value-added tax. If this value cannot be separately determined, value-added tax shall be imposed on the total value of transferred technologies or intellectual property rights and accompanied machinery and equipment

11. Export products being exploited natural resources and minerals not yet processed into other products.

The Ministry of Finance shall assume the prime responsibility for, and coordinate with relevant agencies in providing specific guidance on determining the exploited natural resources and minerals not yet processed into other products stated in this Clause.

12. Goods and services of the business households or individuals with annual turnover of one hundred million VND or less than.

The Ministry of Finance shall guide the business enterprises and individuals, with annual turnover of one hundred million VND or less than, not liable to pay value-added tax as prescribed at this Clause.

Chapter 2.

BASIS AND METHODS OF TAX CALCULATION

Article 4. Taxable prices

Taxable price shall comply with provisions in Article 7 of the Law on Value-Added Tax and Clause 2 Article 1 of Law amending and supplementing a number of articles of Law on Value-Added Tax.

1. For goods and services sold by the production and business establishments, the taxable price is the sale price exclusive of value-added tax; for excise tax-liable goods and services, the taxable price is the sale price inclusive of excise tax but exclusive of value-added tax; for environmental protection tax - liable goods, the taxable price is the sale price inclusive of environmental protection tax but exclusive of value-added tax; for environmental protection tax and excise tax - liable goods, the taxable price is the sale price inclusive of environmental protection tax and excise tax but exclusive of value-added tax.

For imported goods, the taxable price is the border-gate import price plus (+) import tax (if any), plus (+) excise tax (if any), and plus (+) environmental protection tax (if any). The border-gate import price shall be determined under regulations on prices for calculating import tax.

In case of purchase of services specified in Clause 2, Article 2 of this Decree, the taxable price is the payment price exclusive of value-added tax indicated in the service purchase contract.

2. For goods and services used for barter, internal consumption or donation, the taxable price is the price for calculating value-added tax on goods and services of the same or equivalent kinds at the time of barter, consumption or donation. For donation of letters of invitation (no charge) to watch art, fashion performances, beauty and model contests, sport competitions which are permitted by competent state agencies as prescribed by law, the taxable price is determined equal to zero (0).

For goods and services used for promotion as prescribed by commercial law, the taxable price is determined equal to zero (0); unless goods and services used for promotion fail to comply with commercial law, they must declare, calculate and pay tax as goods and services used for barter, internal consumption or donation.

Goods and services used for internal consumption specified in this Clause are those delivered or supplied by business establishments for consumption, excluding goods and services used for those establishments' production and business process.

3. For activity of real estate transfer, the value-added taxable price is the real-estate transfer price minus (-) the land price permitted to be deducted for value-added tax calculation.

a) The land price permitted to be deducted for value-added tax calculation is specified as follows:

- Case of being assigned land by State for investment in infrastructure, construction of houses for sale, land price permitted to be deducted for value-added tax calculation includes land levy payable to State budget (exclusive of the exempted or reduced land levy) and cost for compensation and ground clearance as prescribed by law;

- Case of auction for land-use right, the land price permitted to be deducted for value-added tax calculation is land price winning auction:

- Case of renting land for construction of infrastructure, houses for sale, the land price permitted to be deducted for value-added tax calculation includes land levy payable to State budget (exclusive of the exempted or reduced land levy) and cost for compensation and ground clearance as prescribed by law;

- Case where business establishments are transferred the land-use right from organizations or individuals, the land price permitted to be deducted for value-added tax calculation includes land price at time of being transferred the land-use right and value of infrastructure (if any); business establishments are not permitted to declare, deduct the input value-added tax of infrastructure included in value of land-use right deducted and not subject to value-added tax. If the deducted land price does not included value of infrastructure, business establishments are permitted to declare and deduct the input value-added tax of infrastructure excluded in value of land-use right deducted and not subject to value-added tax.

If the land price at time of transfer is not identified, the land price which is permitted to be deducted for value-added tax calculation is land price set by the provincial People's Committees at the time of concluding into transfer contracts.

- In case where real estate business establishments perform in form of building – transfer (BT) and pay by value of land-use right, the land price permitted to be deducted for value-added tax calculation is price at time of concluding into BT contracts as prescribed by law; if at time of concluding into BT contracts, the land price is not identified, the land price permitted to be deducted is land price decided by the provincial People's Committees for payment of works.

b) Cases of building and trading in infrastructure, building houses for sale, transfer or lease, the value-added taxable price is the sum collected according to the project execution or payment schedule indicated in contracts minus (-) the land price permitted to be deducted corresponding to the rate % of the sum collected over total value of contract.

4. For electricity of a hydropower plant being a dependent cost-accounting unit of the Vietnam Electricity Group, including electricity of a hydropower plant being a dependent cost-accounting unit of the Generation Corporations under the Vietnam Electricity Group, the value-added taxable price for determining the value-added tax amount to be paid in the locality where the plant is based is equal to 60% of the preceding year's average commodity electricity-selling price exclusive of value-added tax.

5. For casinos, prize-winning video games or betting entertainment services, the taxable price is excise tax-inclusive earnings from these services, excluding prizes already paid to customers.

6. Value-added taxable prices of goods and services specified in Clause 1, Article 7 of the Law on Value-Added Tax and Clause 2 Article 1 of Law amending and supplementing a number of articles of Law on Value-Added Tax include also surcharges and additional charges earned by business establishments.

The Ministry of Finance shall guide specifically provisions at this Article.

Article 5. Time for determining value-added tax

1. The time for determining value-added tax on goods is the time of transferring goods ownership or use right to purchasers, regardless of whether money has been collected or not.

2. The time for determining value-added tax on services is the time of completing the provision of services or the time of making service provision invoices, regardless of whether money has been collected or not.

3. The Ministry of Finance shall specify the time for determining value-added tax in other special cases.

Article 6. Tax rates

Value-added tax rates are specified in Article 8 of the Law on Value-Added Tax and Clause 3 Article 1 of Law amending and supplementing a number of articles of Law on Value-Added Tax.

1. The tax rate of 0% applies to exported goods and services, international transportation and goods and services not subject to value-added tax specified in Article 5 of the Law on Value-Added Tax and Clause 1 Article 1 of Law amending and supplementing a number of articles of Law on Value-Added Tax upon exportation, except goods and services specified at Point dd of this Clause.

The exported goods and services are goods and services sold and supplied to foreign organizations and individuals and consumed outside Vietnam, in non-tariff areas; goods and services supplied to foreign customers as prescribed by law.

a) Exported goods include: Goods exported abroad or sold into non-tariff areas, works built and installed abroad, into non-tariff areas; goods sold and place of delivery is outside Vietnam; supplies, spare parts for repair, maintenance of means, machinery, equipment for foreign parties and consumed outside Vietnam; export on spot and other cases in which goods are regarded as exports under law.

b) Exported services include services provided directly to overseas organizations or individuals or organizations and individuals in non-tariff areas and consumed outside Vietnam, consumed into non-tariff areas.

Cases of service provision in which activities of provision is occurred in Vietnam and concurrently outside Vietnam but the service contracts are signed by two taxable payers in Vietnam or have permanent establishments based in Vietnam, the tax rate of 0% is only applied to the part of service value performed outside Vietnam, except for case of supplying insurance service for imported goods that is applied the tax rate of 0% on whole value of contract. If value part of service performed in Vietnam is not determined separately in contract, the taxable price is determined according to the rate (%) of costs arising at Vietnam on total costs.

Overseas individuals include foreigners not residing in Vietnam and overseas Vietnamese who stay outside Vietnam during the time of service provision.

Organizations and individuals in a non-tariff area are those having business registration and other cases specified by the Prime Minister.

c) International transportation mentioned in this Clause covers transportation of passengers, luggage and cargo along international routes from Vietnam abroad or vice versa, or both destination and departure are in foreign countries. If international transportation contracts cover domestic transportation routes, international transportation also covers domestic routes.

d) To be eligible for the tax rate of 0%, exported goods and services specified at Points a and b of this Clause must satisfy full conditions specified at Point c Clause 2 Article 9 of this Decree and some cases of goods and services eligible for the tax rate of 0% under conditions prescribed by the Ministry of Finance.

dd) Cases not apply the value-added tax rate of 0% include:

- Technology transfer, intellectual property transfer abroad;

- Services of reinsurance abroad;

- Credit provision services abroad;

- Capital transfer abroad;

- Securities investment abroad;

- Derivative financialservices;

- Services of post and telecommunication;

- The exported products being exploited natural resources and minerals not yet processed into other products specified at Clause 11 Article 3 of this Decree;

- Goods and services supplied to individuals without business registration into non-tariff areas.

e) The Ministry of Finance shall specify some cases of other goods and services supplied to overseas organizations and individuals that may apply the tax rate of 0% and goods and services supplied to overseas organizations and individuals but consumed in Vietnam that do not apply the tax rate of 0%.

2. The tax rate of 5% is applied to the goods and services defined in Clause 2, Article 8 of the Law on Value-Added Tax, and Clause 3 Article 1 of Law amending and supplementing a number of articles of Law on Value-Added Tax. Some cases apply the Value-Added Tax rate of 5% are specified as follows:

a) Clean water for production and daily life specified at Point a Clause 2 Article 8 of the Law on Value-Added Tax excludes bottled drinking water and other beverages which are subject to the tax rate of 10%.

b) Products specified at Point b Clause 2 Article 8 of the Law on Value-Added Tax include:

- Fertilizers, including organic fertilizers, inorganic fertilizers, microbiological fertilizers and other fertilizers;

- Ores for fertilizer production, including those used as raw materials for fertilizer production;

- Pesticides including plant protection drugs and other drugs for prevention against pests;

- Plant and animal growth stimulants.

c) Feeds for cattle, poultry and other domestic animals specified at Point c, Clause 2, Article 8 of the Law on Value-Added Tax include processed or unprocessed products, such as: Bran, offal, assorted oil cakes, fish paste, bone meal.

d) Product preliminary processing and preservation services specified at Point d, Clause 2, Article 8 of the Law on Value-Added Tax include: drying, peeling, pitting, slicing, grinding, freezing, salting or other ordinary methods of preservation.

dd) Fresh and live foods specified at Point g, Clause 2, Article 8 of the Law on Value-Added Tax include foods not yet cooked or processed into other products.

Unprocessed forest products specified at Point g, Clause 2, Article 8 of the Law on Value-Added Tax include exploited natural forest products of group: Rattan, bamboo, mushrooms, Jew's ear, roots, leaves, flowers, medicinal plants, resin and other forest products.

e) Pharmacy-chemical products and pharmaceuticals used as raw materials for the manufacture of curative and preventive medicines specified at Point 1, Clause 2, Article 8 of the Law on Value-Added Tax.

g) Social houses specified at Point q Clause 2, Article 8 of the Law on Value-Added Tax and Clause 3 Article 1 of Law amending and supplementing a number of articles of Law on Value-Added Tax are houses which are invested and built by State or organizations and individuals of all economic sectors and met the criteria on houses, sale price, rent, price of rent for purchase, objects, conditions for purchase, rent, rent for purchase of social houses as prescribed by law on housing.

Article 7. Tax credit method

The tax credit method is performed according to Article 10 of the Law on Value-Added Tax and Clause 4 Article 1 of Law amending and supplementing a number of articles of Law on Value-Added Tax.

1. The payable value-added tax amount according to the tax credit method is the output value-added tax amount minus the creditable input value-added tax amount.

2. The output value-added tax amount is the total amount of value-added tax on sold goods and services indicated in the added-value invoice.

The value-added tax indicated in the added-value invoice is the taxable price of goods and services multiplied (x) with value-added tax rate of such goods and services.

In case of using documents indicating the payment price being the price inclusive of value-added Tax, the output value-added Tax is determined by the payment price minus (-) the taxable price determined as prescribed at Point k Clause 1 Article 7 of Law on Value-Added Tax.

3. The creditable input value-added Tax amount is determined based on:

a) The total value-added Tax amount indicated in the added-value invoice on goods or service purchase and the document proving the payment of value-added tax on imported goods or payment of tax for case of purchasing services defined at Clause 2 Article 2 of this Decree.

If the purchased goods and services use documents indicating the payment price being the price inclusive of value-added tax, the creditable input value-added tax is determined by the payment price minus (-) the taxable price specified at point k Clause 1 Article 7 of Law on Value-Added Tax.

b) Deduction conditions for the input value-added tax shall comply with Clause 2 Article 9 of this Decree.

4. Tax credit method applies to:

a) Business establishments that are operating with annual turnover of one billion VND or more from goods sale and service provision and fully observe regulations on accounting, invoices and documents as prescribed by the law on accounting, invoices and documents, except for the business households and individuals that pay tax according to the direct calculation method defined in Article 8 of this Decree.

Duration of stable application of tax calculation method is two consecutive years.

The Ministry of Finance shall guide way to calculate turnover as the basis for determining the business establishments that pay value-added tax under the tax credit method and stable duration of application of tax calculation method specified at this point.

b) Business establishments registering voluntarily for application of the tax credit method include:

- Enterprises and cooperatives that are operating with annual turnover of less than billion VND from goods sale and service provision and fully observe regulations on accounting, invoices and documents as prescribed by the law on accounting, invoices and documents;

- Enterprises that have just been established from investment projects of business establishments which are operating and pay value-added tax under the credit method;

- Enterprises and cooperatives that have just been established and perform investment and procurement of fixed assets, machinery, equipment; foreign organizations and foreigners conducting business in Vietnam under contractor contracts, contractor sub-contracts as guided by the Ministry of Finance;

- Other economic organizations that can account the input and output value-added tax.

c) Foreign organizations and individuals supplying goods and services for prospecting, exploring and developing and exploiting oil and gas; their taxes are declared and paid on behalf of them, under the credit method, by the Vietnamese party.

In case where business establishments have activities of purchasing, selling, processing gold, silver or gems, they must separately account these activities for the application of the method of calculation of tax based directly on added value specified at Clause 1 Article 8 of this Decree.

5. The Ministry of Finance shall guide specifically provisions in this Article.

Article 8. Method of calculation of tax based directly on added value

The method of calculation of tax based directly on added value is specified in Article 11 of the Law on Value-Added Tax and Clause 5 Article 1 of Law amending and supplementing a number of articles of Law on Value-Added Tax.

1. The payable value-added tax amount according to the method of calculation of tax based directly on added value is the added value multiplied by (x) the value-added tax rate of 10% applicable to activities of purchasing, selling, processing gold, silver or gems.

The added value of gold, silver or gems is determined by the selling price of gold, silver or gems minus (-) the purchase price of respective gold, silver or gems.

The selling price of gold, silver or gems is the actual selling price indicated on the sale invoice of gold, silver or gems, inclusive of remuneration for processing (if any), value-added tax, surcharges and additional charges earned by the seller.

The purchase price of gold, silver or gems is the value of gold, silver or gems purchased or imported, inclusive of value-added tax for purchasing, selling, processing the respective sold gold, silver or gems.

If arising the (-) negative number of added value of gold, silver or gems in the taxable period, it will be calculated by clearing for the (+) positive number of added value of gold, silver or gems. If not arising the (+) positive number of added value or the (+) positive number of added value is insufficient for clearing the (-) negative number of added value, it will be carried over the added value of the next term in year. Ending calendar year, the (-) negative number of added value is not carried over the next year.

2. The payable value-added tax under method of calculation of tax based directly on added value is the rate % multiplied by turnover and applied as follows:

a) Subjects of application:

- Enterprises and cooperatives that are operating with annual turnover less than the turnover level of one billion VND, except for case of voluntary registration for application of the tax credit method specified at Clause 4 Article 7 of this Decree;

- Enterprises and cooperatives that have just been established, except for case of voluntary registration specified at Clause 4 Article 7 of this Decree;

- Business households and individuals;

- Foreign organizations and individuals conducting business in Vietnam not pursuant to the Investment Law and other organizations that fail to observe or observe insufficiently regulations on accounting, invoices and documents as prescribed by law, except for foreign organizations and individuals that supplying goods and services for activities of prospecting, exploring, developing and exploiting oil and gas specified at Point c Clause 4 Article 17 of this Decree.

- Other economic organizations, except for case of registration for tax payment under the credit method specified at Point b Clause 4 Article 7 of this Decree.

In case where business establishments have activities of purchasing, selling and processing gold, silver or gems, they must separately account these activities for applying the method of calculation of tax based directly on added value specified at Clause 1 of this Article.

b) The percentage (%) to calculate value-added tax on the turnover is defined for each activity as follows:

- Goods distribution or provision: 1%;

- Services, construction (Except construction involving the supply of raw materials and materials): 5%;

- Production, transportation, services provided together with goods, construction involving the supply of raw materials and materials: 3%;

- Other business activities: 2%.

c) The turnover to calculate value-added tax is total amounts from goods and service sale indicated on sale invoice, exclusive of value-added tax and surcharges and additional charges earned by business establishments.

3. Business activities, business households that fail to observe or observe insufficiently regulations on accounting, invoices and documents as prescribed by law, shall pay value-added tax under the method of fixing tax amounts specified in Article 38 of Law on Tax Administration.

The Ministry of Finance shall specify the method of calculation directly based on added value specified at this Article.

Chapter 3.

TAX CREDIT AND REFUND

Article 9. Credit of input value-added tax

Input value-added tax credit is specified in Article 12 of the Law on Value-Added Tax and Clause 6 Article 1 of Law amending and supplementing a number of articles of Law on Value-Added Tax.

1. Business establishments which pay value-added tax according to the tax credit method are entitled to input value-added tax credit as follows:

a) Input value-added tax on goods or services used for the production or trading of goods or services subject to value-added tax may be wholly credited, including input value-added tax that is not be compensated of the damaged goods subject to value-added tax and input value-added tax of goods and services for forming fixed assets such as canteens, rest houses, dressing rooms, garage, restrooms, water basins serving employees in zones of production and business and dwelling houses, health station in industrial parks.

b) Input value-added tax on goods or services (included fixed assets) used for the production and trading of goods or services both subject and not subject to value-added tax, only the input value-added tax amount on goods or services used for the production and trading of goods or services subject to value-added tax may be credited. Business establishments shall separately account creditable and non-creditable input value-added tax amounts; if separate accounting cannot be conducted, the creditable input tax shall be calculated based on the ratio (%) between the turnover subject to value-added tax and the total turnover of sold goods or services.

For business and production establishments that organize closed production and concentrated accounting, if they use products not subject to value-added tax through stages for production of goods subject to value-added tax, all input value-added taxes at stages may be credited.

For business and production establishments that have investment projects performed according to many stages, including the business and production establishments just been established, with plan on closed production and business, concentrated accounting, and using products not subject to value-added tax to produce goods subject to value-added tax, but in the investment stage of fundamental construction, supplying goods and services not subject to value-added tax, the input value-added taxes during investment stage for forming fixed assets may be wholly credited. The input value-added tax of goods and services not forming fixed assets may be credited at the percentage (%) between turnover subject to value-added tax on total turnover of the sold goods and services.

For production and business establishments with investment projects, including production and business establishments just been established, just invested in production and business of goods and services not subject to value-added tax, just invested in production and business of goods and services subject to value-added tax, the input value-added tax of fixed assets during investment stage of fundamental construction shall be temporarily credited at the percentage (%) between turnover of goods and services subject to value-added tax over total turnover of the sold goods and services under the production and business plan of establishments, the tax temporarily credited shall be adjusted at rate (%) between turnover of goods and services subject to value-added tax over total turnover of the sold goods and services in three year from the first year establishments earn turnover.

The Ministry of Finance shall guide determination of the rate (%) between turnover of goods and services subject to value-added tax over total turnover of the sold goods and services and the temporary credit, adjustment for the input value-added tax specified in this point.

c) The input value-added tax of fixed assets, machinery, equipment, including the input value-added tax of operation of hiring these assets, machinery, equipment, in the following cases, shall be not credited but included in historical cost of fixed assets or the deducted costs as prescribed by Law on enterprise income tax and documents guiding implementation: special-purpose fixed assets used for the manufacture of weapons and military equipment for security and defense purposes; fixed assets, machinery, equipment of credit institutions, re-insurance businesses, life insurance enterprises, securities trading enterprises, hospitals or training institutions; civil aircraft and yachts not for commercial transportation of cargo or passengers, or for tourist or hotel business.

For fixed assets being passenger cars of 9 seats or less (Except cars for commercial transportation of cargo or passengers, or for tourist or hotel business) which are valued at over VND 1.6 billion, the input value-added tax amount corresponding to the amount in excess of VND 1.6 billion will not be credited.

d) The input value-added tax on goods or services used for production and trading of goods or services not subject to value-added tax is not credited, except for cases specified at Points dd and e of this Clause.

dd) The value-added tax on goods or services purchased by business establishments for the production and trading of goods or services provided to foreign organizations or individuals or international organizations used as humanitarian aid or non-refundable aid specified in Clause 19, Article 5 of the Law on Value-Added Tax is wholly credited.

e) The input value-added tax on goods or services used for prospecting, exploring and developing oil and gas fields is wholly credited.

g) The input value-added tax arising in a month shall be declared and credited upon the determination of the payable tax amount of that month. In case a business establishment detects errors in the declared or credited input value-added tax amount, additional declaration and credit may be conducted before taxation agencies announce decision on conducting tax examination, tax inspection at head offices of tax payers.

h) The input value-added tax on goods or services used for production and trading of goods or services not subject to value-added tax specified at Points a, d, and dd Clause 3 Article 2 of this Decree shall be wholly credited.

i) Business establishments may account the non-creditable input value-added tax amount as an expense for calculating enterprise income tax or include it in the historical cost of fixed assets, except for the value-added tax amount of goods and services at value of twenty million VND or more for each purchase without non-cash payment document.

k) When business establishments which pay value-added tax according to method of tax calculation directly based on added value change for tax payment under the tax credit method, they shall be credited value-added tax of the purchased goods and services arising from the first period of tax declaration and payment under the tax credit method.

When business establishments which pay value-added tax under the tax credit method change for tax payment under method of tax calculation directly based on added value, they shall be included the value-added tax amount of goods and services arising in duration of tax payment under the tax credit method but not yet been credited all into the deducted cost when determining the taxable income; enterprise income, except for the value-added tax amount of the purchased goods and services arising in duration of tax payment under the tax credit method that is funded as prescribed in article 10 of this Decree and legal documents which are valid before the effective date of this Decree.

l) The Ministry of Finance shall specify some cases where business establishments may declare and credit the value-added tax of the purchased goods and services under form of authorization for other organizations or individuals, so that invoices are written names of the authorized organizations or individuals.

2. Conditions for input value-added tax credit:

a) Having a value-added invoice of purchased goods or services or a document proving the payment of value-added tax on goods at the stage of importation, and a document proving the value-added tax payment in case of service purchase specified in Clause 2, Article 2 of this Decree.

b) Having a payment document not using cash of purchased goods or services, except goods or services valued at under VND 20 million upon each purchase.

For goods or services purchased by deferred or installment payment, which are valued at over VND 20 million, business establishments shall, based on goods or service purchase contracts, value-added invoices and non-cash payment documents, declare and credit the input value-added tax. In case of non-availability of non-cash payment documents because the contractual payment time is not due, business establishments may still declare and credit the input value-added tax. As of the contractual payment time, or December 31 every year for case where the contractual payment time is sooner than December 31, if non-cash payment documents are unavailable, business establishments are not entitled to input value-added tax credit and must declare and readjust the credited amount of input value-added tax.

For goods or services purchased by clearing between the value of purchased goods or services and the value of sold goods or services, such clearing is also regarded as payment without cash use. After clearing, if the remaining value paid in cash is VND 20 million or more, tax credit is allowed only for cases in which non-cash payment documents are available

In case goods or services valued at under VND 20 million are purchased from a supplier many times in a day, bringing the total value of purchased goods or services to over VND 20 million, tax credit is allowed only for cases in which non-cash payment documents are available.

c) Exported goods and services applied tax rates of 0%, apart from the conditions specified at Points a and b of this Clause, must also fully satisfy the following conditions:

- Having a contract on sale or processing of exported goods or entrusted processing of exported goods or a service provision contract signed with an organization or individual overseas or in a non-tariff area;

- Having non-cash payment documents for exported goods or services and other documents under law; and customs declarations, for exported goods.

Payment for exported goods and services made in the form of clearing between exported and imported goods and services, or debt payment on behalf of the State is also regarded as non-cash payment.

Cases where: The foreign purchasers lost solvency because of falling in bankruptcy situation, export goods fail to ensure quality and must be destroyed at the border gate of the importing country and export goods are damaged due to objective causes during transportation outside borders of Vietnam, it must have documents or papers certified by the third party which shall be considered as non-cash payment documents, to replace for the non-cash payment documents.

The Ministry of Finance shall guide conditions for some cases of special goods sale and service that are applied tax rates of 0% and dossiers and documents to replace for non-cash payment documents.

Article 10. Value-added tax refund

Value-added tax refund is specified in Article 13 of the Law on Value-Added Tax and Clause 7 Article 1 of Law amending and supplementing a number of articles of Law on Value-Added Tax.

1. Business establishments which pay tax according to the tax credit method and have some input value-added tax amount not yet fully credited in month (for monthly declaration) or in quarter (for quarterly declaration) will be refunded such value-added tax amount in the next period; When the accumulated amount of value-added tax for twelve months from the first month or four quarters for the first quarter arising the input value-added tax amount not yet fully credited still has the input value-added tax amount not yet fully credited, business establishments shall be refunded.

2. For new business establishments under investment projects which have registered business and registered to pay value-added tax according to the tax credit method, or oil and gas field-prospecting, exploring and developing projects which are being invested and do not yet operate, and have an investment period of one year or longer, they are entitled to value-added tax refund on a yearly basis for goods or services used for investment. When the accumulated amount of value-added tax on goods or services purchased for investment reaches VND 300 million or more, it will also be refunded.

3. For operating business establishments being subject of value-added tax payment under the tax credit method having new projects (except projects on investment in construction of houses for sale) in provinces or centrally run cities other than those where they are headquartered, which are being invested and do not yet operate and register business and tax payment, they will be refunded value-added tax on goods or services purchased for such investment when it reaches VND 300 million or more. In this case, business establishments shall make separate tax declarations and tax refund dossiers.

4. Business establishments in month (for monthly declaration) or in quarter (for quarterly declaration) that have exported goods and services with the input value-added tax amount not yet been credited of 300 million VND or more will be refunded such value-added tax amount on the monthly or quarterly basis; if in month, quarter, the input value-added tax amount not yet been credited is not sufficient 300 million VND, they shall be refunded for subsequent month, or subsequent quarter.

5. Business establishments that pay value-added tax under the tax credit method upon ownership transformation, enterprise transformation, merge, consolidation, separation, split, dissolution, bankruptcy or operation termination will be refunded the input value-added tax amount not yet fully credited or the overpaid value-added tax amount.

6. Value-added tax refund for programs and projects funded with non-refundable official assistance development (ODA), non-refundable aid or humanitarian aid is specified as follows:

a) Their owners or principal contractors or organizations designated by foreign donors to manage programs or projects funded with non-refundable official assistance development (ODA) will be refunded the paid value-added tax amount on goods or services purchased in Vietnam for such programs or projects;

b) Vietnamese organizations using non-refundable aid or humanitarian aid of foreign organizations or individuals for purchasing goods or services for non-refundable aid- or humanitarian aid-funded programs or projects in Vietnam will be refunded the paid value-added tax on such goods or services.

7. Beneficiaries of diplomatic privileges or immunities under the legislations on Diplomatic Privileges and Immunities that purchase goods or services in Vietnam for use will be refunded the paid value-added tax indicated on the added-value invoice or payment document indicating the payment price inclusive of value-added tax.

8. Foreigners, Vietnamese residing in foreign countries possessing passports or visas which are issued by foreign competent agencies shall be refunded for goods purchased in Vietnam and take along upon exit.

9. Business establishments that have decision on value-added tax refund of competent agencies as prescribed by law and cases of value-added tax refund under International treaties of which the Socialist Republic of Vietnam is a contracting party.

Article 11. Places for tax payment

1. Taxpayers shall declare and pay value-added tax in localities where they carry out production and business activities.

2. Taxpayers that declare and pay value-added tax according to the tax credit method and have dependent cost-accounting production establishments based in provinces or centrally run cities other than those where they are headquartered shall pay value-added tax both in localities where their production establishments are based and localities where they are headquartered.

The Ministry of Finance shall guide specifically provisions at this Article.

Chapter 4.

PROVISIONS OF IMPLEMENTATION

Article 12. Effect and implementation responsibilities

1. This Decree takes effect on January 01, 2014 and replaces Decrees No. 123/2008/ND-CP dated December 08, 2008 and No. 121/2011/ND-CP dated December 27, 2011 of Government, detailing and guiding implementation of a number of Articles of Law on value-added tax.

To annul Clause 1 Article 4 of the Decree No. 92/2013/ND-CP dated August 13, 2013, detailing implementation of a number of Articles that take effect from July 01, 2013 and Law amending and supplementing a number of Articles of Law on enterprise income tax and Law amending and supplementing a number of Articles of Law on value-added tax from the effective date of this Decree.

2. The Ministry of Finance shall guide implementation of this Decree.

3. Ministers, Heads of ministerial-level agencies, Heads of government-attached agencies and Presidents of provincial-level People's Committees, and relevant organizations and individuals shall implement this Decree.