THE MINISTRY OF FINANCE
Official Dispatch No. 6789/BTC-TCT dated May 29, 2013 of the Ministry of Finance on deducting 2% of VAT
| Respectfully to: | - State Treasuries of central-affiliated cities and provinces - Tax Departments of central-affiliated cities and provinces |
Recently, the Ministry of Finance has received reflect of State Treasuries, Tax Departments of central-affiliated cities and provinces on accounting revenues of the State budget when deducting VAT 2% for the capital construction facilities in localities according to the official dispatch No. 17848/BTC-TCT dated December 29, 2011 of the Ministry of Finance on deducting VAT in accordance with the Circular No. 28/2011/TT-BTC.
- According to Article 10 of the Circular No. 28/2011/TT-BTC dated 28/02/2011 of the Ministry of Finance guiding implementation of a number of articles of the Law on Tax administration, guiding implementation of the Decree No. 85/2007/ND-CP dated 25/5/2007 and the Decree No. 106/2010/ND-CP dated 28/10/2010 of the Government:
+ At clause 1(e) provided: “In case a taxpayer conducts business operations of construction, installation or goods sale without establishing subsidiaries in provinces or cities other than the locality in which it is headquartered (below referred to as extra-provincial mobile construction, installation or goods sale operations), the Taxpayer shall submit tax declaration dossiers to district-level Tax Departments of the localities in which construction, installation or goods sale operations are carried out.”
+ At clause 1(g) provided: “For extra-provincial construction and installation works, which are carried out in many localities, such as roads, power transmission lines, water, oil or gas pipelines, etc., thus making it impossible to determine the turnover in each district-level locality, taxpayers shall declare VAT on extra-provincial construction and installation turnover in VAT declaration dossiers at their head offices”
+ At clause 6(d) provided: “When declaring tax with their managing tax agencies, taxpayers shall summarize the whole amount of turnover earned from extra-provincial mobile construction, installation or goods sale business operations and VAT amounts paid for such turnover in tax declaration dossiers submitted at their head offices. The tax amount (according to tax receipts) paid for turnover from extra-provincial mobile construction, installation or goods sale shall be cleared against the payable VAT amount according to taxpayers' VAT declaration submitted at their head offices”.
- According to clause 3, Article 24 of the Circular No. 28/2011/TT-BTC dated 28/02/2011 of the Ministry of Finance guiding implementation of a number of articles of the Law on Tax administration, guiding implementation of the Decree No. 85/2007/ND-CP dated 25/5/2007 and the Decree No. 106/2010/ND-CP dated 28/10/2010 of the Government provided: “Local state treasuries shall deduct the VAT amount for remittance into the state budget which equals 2% of the amount paid for the volume of capital construction works or work items in localities by capital sources from the State budget and VAT-liable ODA projects”.
- According to the Official Dispatch No. 17848/BTC-TCT dated 29/12/2011 on deducting VAT in accordance with the Circular No. 28/2011/TT-BTC of the Ministry of Finance:
