MINISTRY OF FINANCE
GENERAL DEPARTMENT OF TAXATION
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SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom – Happiness
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No. 3997/TCT-CS
Hanoi, September 27, 2007
 
OFFICIAL LETTER
ON WRITING DISCOUNTED AMOUNTS ON INVOICES
To:
Trung Nguyen Joint-Stock Company
(Address: No. 3 Phan Van Dat, District 1, Ho Chi Minh City)
 
In reply to Official Letter No. 701-07/CV-TN of July 17, 2007, of Trung Nguyen Joint-Stock Company on the matter of writing discounted amounts on invoices, the General Department of Taxation gives the following opinions:
Point 5.5, Section IV, Part B, of the Finance Ministry’s Circular No. 32/2007/TT-BTC of April 9, 2007, guiding on value added tax, stipulates: “For goods and services sold at discount prices which are stated on their invoices, these invoices must clearly state the discount percentage or discount amount, the VAT-exclusive sale prices (discounted sale price), VAT and total payment price inclusive of VAT.
If the price reduction is applied on the basis of the quantity or turnover of the actually purchased goods or services, which must reach a certain level, the discount amount of money for the sold goods shall be adjusted on the sale invoice of the last purchase of goods or services or of the purchase of goods or service in the next period. This invoice must show its serial number and the discounted amount of money. If the customer no longer purchases goods, the business establishment shall make a payment voucher to the customer as prescribed.”
In case Trung Nguyen Joint-Stock Company offers price discount or reduction to its distributors, discounted amounts shall be written on invoices as follows:
- Payment discounts (as the purchaser makes payment for goods ahead of schedule) shall not be written on sale invoices. It is a financial expense which the Company agrees to pay to the customer. The seller shall make a payment voucher and the purchaser shall make a receipt to pay and receive this discounted amount. The involved parties shall base themselves on payment orders and receipts to make book-keeping accounting and determine business income tax (BIT) as prescribed.
- Commercial discounts offered to distributors that reach a certain level of purchase turnover prescribed by internal regulations of the Company (the money amount reduced by the seller for the purchaser that reaches a certain level of purchase turnover as prescribed in the internal regulations of the seller) may be written on sale invoices when the discounts arise. If the value of goods stated in the goods sale invoice is less than the discounted amount, it shall be subtracted on the invoice of the next purchase.

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- Discounts which are not stated in sale invoices are not considered commercial discounts; the involved parties shall make payment orders and receipts to make book-keeping accounting and to determine BIT as prescribed.
- In case the Company requests distributors to retail goods at prescribed prices, at prescribed places, the vouchers and invoices used are similar to those for goods sale by mode of agency at prescribed prices for commission.
The General Department of Taxation gives this notice to the Company for information and compliance.
 
FOR THE GENERAL DIRECTOR OF TAXATION
DEPUTY GENERAL DIRECTOR




Pham Duy Khuong
 

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