(Biz Hub) — Continuing with its recent slew of reforms, the Vietnamese Ministry of Finance issued Circular 65/2013/TT-BTC (hereinafter referred to as ‘Circular 65?) on May 17, 2013, to amend certain articles of the currently enforced Circular 06 relating to value-added tax (VAT). Circular 65, which will take effect on July 1, 2013, seeks to provide greater insight and guidance to various areas related to VAT that were once unclear, including updating key VAT rates.
Notable changes can be found below.
· The leasing of land for infrastructure construction or housing will have a VAT deduction equal to the rent amount payable to the State Budget plus the expense deduction for clearance of the land.
· Businesses that sell goods for domestic consumption and export will be entitled a monthly tax refund if the VAT deduction is greater than VN?200 million.
· A company is now permitted to claim a credit on VAT invoices for which an input VAT credit was disallowed in a tax audit due to the lack of bank payment evidence if such evidence can be provided within six months of the date listed on the company's tax audit minutes.
· Circular 65 is set to take effect starting July 1, 2013, but may take retrospective effect (dating to cases as far back as March 1, 2012) in the following cases:
o For the lease of factories to tenants in non-tariff zones: if the corresponding VAT invoice was issued after March 1, 2012, then the seller will be allowed to issue an adjustment invoice with a 0 percent VAT rate;
o For non-credit institutions that previously issued VAT invoices at 10 percent for interest after March 1, 2012: such institutions are now allowed to issue an adjustment invoice so that the interest is not subject to VAT. If no adjustments are made, then the applicable VAT amount will be creditable by the borrower; and
o For digitalization services provided to overseas customers: if the corresponding contract is signed after March 1, 2012, then it will not be subject to any VAT charges.
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This article was first published on Vietnam Briefing.
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