THE MINISTRY OF FINANCE
THE GENERAL DEPARTMENT OF TAXATION
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SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom – Happiness
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No. 4688/TCT-PCCS
Hanoi, December 26, 2005
 
OFFICIAL LETTER
ON VAT CREDIT WITH RESPECT TO INVOICES ISSUED BY ENTERPRISES WHICH HAVE DISAPPEARED
To: Quang Hung Transport Company Ltd., 20 Truong Cong Dinh, Ward 3, Vung Tau city
In reply to Official Letter No. 03 dated December 6, 2005, of Quang Hung Transport Company Ltd., inquiring about VAT credit with respect to invoices issued by enterprises which have disappeared, the General Department of Taxation hereby gives the following opinion:
Point 1, Section IV of the General Department of Taxation’s Official Letter No. 4215/TCT-PCCS of November 18, 2005, on handling of violations regarding sale, purchase and use of illegal invoices, guides the handling of invoices on the sale and purchase of goods and services issued by business establishments which have disappeared as follows:
“For invoices on the sale of goods or services issued before the date the disappearance of business establishments is certified:
1.1. The date on which the disappearance of a business establishment is certified is the date the tax office and local administration jointly make a minutes certifying that the business establishment no longer exists at its registered place. The date of making the minutes certifying the disappearance of a business establishment shall be indicated on tax offices’ notices.
1.2. If the value of goods or services indicated in the sale invoice is compatible with the economic contract signed between the two parties and lawful payment documents, the goods purchased under this invoice have been sold out and declared, have been used as materials for production or are still left in stock and they have been fully and properly accounted, input VAT shall be credited; the value of purchased goods or services shall be accounted as reasonable expenses when determining incomes liable to business income tax.”
According to the aforesaid guidance, in case the Company signed a transport contract with Dai Thanh company and the time of signing of the economic contract, and making of payment documents between the two parties and issuance of the value added invoice by Dai Thanh company, which is considered the time of arising of this service, was prior to the date the disappearance of the business establishment is certified as guided at aforesaid Point 1.1, if this invoice had been declared and output VAT had been paid by Dai Thanh company, input VAT shall be credited for Quang Hung Transport Company Ltd. and be accounted as reasonable expenses when determining incomes liable to business income tax.
Above is the General Department of Taxation’s answer to the inquiry of the Company for the latter’s knowledge and compliance.
 
 
FOR THE GENERAL DIRECTOR OF TAX
DEPUTY GENERAL DIRECTOR


Pham Duy Khuong