Laws of Vietnam

CIRCULAR No. 109/TT-BTC OF JULY 31, 1998 GUIDING THE AMENDMENTS AND SUPPLEMENTS TO REGULATIONS ON SPECIAL CONSUMPTION TAX REDUCTION

Pursuant to Decree No.97-CP of December 27, 1995 of the Government detailing the implementation of the Law on Special Consumption Tax and the Law on the Amendments and Supplements to a Number of Articles of the Law on Special Consumption Tax; and Circular No.98-TC/TCT of December 30, 1995 of the Ministry of Finance guiding the implementation of Decree No.97-CP of December 27, 1995 of the Government;

The Ministry of Finance hereby guides the amendments to regulations on cases of special consumption tax reduction specified in Point 1.d, Part IV of Circular No.98-TC/TCT of December 30, 1995 of the Ministry of Finance, as follows:

"d- Small-scale establishments which have been engaged in the production of goods items subject to special consumption tax, met with difficulties, fully paid special consumption tax as prescribed by law, and suffered from losses, shall be considered for special consumption tax reduction.

The special consumption tax reduction amount shall be equal to the amount of loss incurred but must not exceed 50 % of the total payable tax amount as prescribed by law.

The tax reduction duration shall be determined on the yearly basis.

Regarding the small production scale:

- Small-scale breweries are those having a production capacity of less than 10 million liters/year;

- Small-scale cigarette producing establishments are those having a production capacity of less than 10 million packs/year;

- For distilleries, the Ministry of Finance shall consider and give tax reduction on case-by-case basis.

The establishments eligible for tax reduction consideration must be those which fully comply with the regime of accounting books, invoices and vouchers as prescribed by law and clearly account their production and/or business achievements as well as the payable tax amounts prescribed by law.

An establishment eligible for tax reduction must compile the following documents:

- An official written request for tax reduction, clearly stating the cause(s) of loss, its equipment capacity and actual production output, which is enclosed with:

+ The economic-technical study or project for investment in production facility(ies), and written record on pre-acceptance inspection of the project before it is put into use;

+ The report on production and/or business results, that details the output, selling prices, turnover, production costs, finished products' prices, payable tax amount as prescribed by law and the loss amount;

+ The report on financial settlement and tax settlement of the year for which tax reduction is requested.

The complete tax reduction dossier of the establishment shall be sent to the tax agency directly managing such establishment. Within 10 working days, the tax agency receiving the dossier shall have to inspect and verify the establishment's production and/or business results, then report it to the provincial/municipal tax department. Within 5 working days, the provincial/municipal tax department shall send an official dispatch requesting the Ministry of Finance to consider and settle the case together with the establishment's dossier to the Ministry of Finance (the General Department of Taxation).

At a time, a production establishment shall be considered only for special consumption tax reduction according to one of the three cases mentioned in Points b, c and d above."

This Circular takes effect after its signing and applies to the settlement of special consumption tax reduction as from 1997. The previous stipulations which are contrary to this Circular are now annulled.

Any problems arising in the course of implementation shall be reported by the concerned units and localities to the Ministry of Finance for study, consideration and timely additional guidance.

For the Minister of Finance

Vice Minister

PHAM VAN TRONG