I. SUBJECTS AND SCOPE OF APPLICATION

Subjects entitled to diplomatic privileges and immunities, when purchasing VAT-liable goods and services in Vietnam stated at Point 2 below for use, shall be refunded the already paid VAT amounts inscribed in the value-added invoices.

1. Subjects entitled to diplomatic immunities:

- Diplomatic missions, foreign consulates and representative agencies of international organizations belonging to the United Nations system, which are based Vietnam, (hereinafter called representative missions for short) and the heads of these representative missions.

- Diplomats, consuls and officials of international organizations and administrative as well as technical staff of representative missions.

- Representative bodies of international inter-governmental organizations outside the United Nations system and their members shall enjoy VAT privileges and immunities under the agreements signed between the Vietnamese Government and these organizations.

2. Goods and services eligible for VAT reimbursement:

2.1. For representative missions and the heads of representative missions:

- The services of leasing houses for use as head-offices of the representative missions or as residences of their heads.

- Daily-life electricity and water for the head-offices of the representative missions and residences of their heads.

- Information and communications services: telephone (including mobile phones), facsimile, internet… as well as the services of installing and connecting these communication equipment.

- Petrol or diesel oil for representative missions’ cars bearing diplomatic (NG) or foreign (NN) number plates: not exceeding 1,200 liters/car/quarter.

- Goods and services used for the construction, maintenance and repair of buildings being the head-offices of the representative missions or residences of their heads.

- Office equipment and facilities and other equipment and facilities for the head-offices of the representative missions and residences of their heads.

- Goods purchased within quantity limits prescribed in Joint Circular No. 04/TTLB of February 12, 1996 and Joint Circular No. 04BS/TTLB of October 20, 1996 of the Ministry of Trade, the Ministry for Foreign Affairs, the Ministry of Finance and the General Department of Customs.

2.2. For diplomats, consuls, officials of international organizations and administrative as well as technical staff of representative missions:

- Goods purchased within quantity limits prescribed in Joint Circular No. 04/TTLB of February 12, 1996 and Joint Circular No. 04BS/TTLB of October 20, 1996 of the Ministry of Trade, the Ministry for Foreign Affairs, the Ministry of Finance and the General Department of Customs.

- Petrol or diesel oil used for cars bearing diplomatic (NG) number plates: not exceeding 900 liters/car/quarter.

3. Cases where properties being dwelling houses, cars and motorbikes are permitted to be transferred between representative missions and/or their staff members being subjects entitled to diplomatic privileges and immunities, shall not be liable to VAT.

Cases of transfer to other subjects shall be liable to VAT according to the Value Added Tax Law and the current guiding documents.

II. IMPLEMENTATION ORGANIZATION:

1. Vietnamese as well as foreign organizations and individuals that are licensed to conduct business in Vietnam, supply goods and/or services to subjects entitled to diplomatic privileges and immunities (hereinafter referred to as the suppliers) shall have to make value-added invoices and calculate VAT on the sold goods and/or services according to the provisions of the Value Added Tax Law and the current guiding documents.

2. The VAT amounts shall be reimbursed on a quarterly basis (quarters of the calendar year). In cases where the head-offices are relocated to other provinces or centrally-run cities or the involved persons finish their terms of office and go home, the tax reimbursement settlement shall be determined up to the time when such changes occur.

In cases where subjects entitled to diplomatic privileges and immunities have signed contracts with goods- and/or service-supplying units according to sans-VAT prices, such contracts must be adjusted according to VAT-included prices. If the suppliers fail to timely adjust or cannot adjust the contracts, they must send to the local tax offices written documents thereon, enclosed with the contracts and certificates of entitlement to VAT-immunity, granted by the Protocol Department (the Ministry for Foreign Affairs), so as to be certified for the continued calculation of tax under the provisions in the Finance Ministry’s Circular No. 122/2000/TT-BTC of December 29, 2000. The deadline for application of the provisions in Circular No. 122/2000/TT-BTC is March 31, 2003.

For contracts on provision of services of renting offices, dwelling houses or transport means, signed before October 1, 2002, under which the representative missions have advanced rental for a renting period, and the suppliers have issued invoices according to sans-VAT prices before the effective date of this Circular, it is unnecessary to adjust such contracts and payment invoices until the end of the paid renting period.

3. Provisions on the procedures and dossiers for VAT reimbursement:

a) The procedures of registration for the granting of tax codes:

Representative missions being subjects eligible for VAT reimbursement shall make tax code-registration declarations according to set form, enclosed with the certification of the representative missions’ entitlement to VAT reimbursement by the Protocol Department (the Ministry for Foreign Affairs). The representative missions shall send the tax code-registration declarations to the Tax Departments of the provinces or centrally-run cities where they are headquartered.

The Tax Departments shall have to grant tax codes and send the certifications thereof to the representative missions within 15 days as from the date of receiving the tax code-registration declarations, which are fully and accurately made as prescribed.

Other subjects belonging to the representative missions such as the representative missions’ heads, diplomats and consuls…, who are subjects eligible for VAT reimbursement as prescribed in Section I of this Circular, shall be included in a list made upon registration for the granting of tax codes of the representative missions. In case of necessity and in order to facilitate the management and supervision of VAT reimbursement, the representative missions may request the tax offices to consider the granting of sub-tax codes for these subjects.

b) Dossiers for VAT reimbursement:

The representative missions shall compile dossiers of application for VAT reimbursement for each quarter and send them to the Protocol Department (the Ministry for Foreign Affairs). Such a dossier shall include:

- A diplomatic note requesting VAT reimbursement for the representative missions.

- The declaration on VAT reimbursement, made according to set form, with the certification by the Protocol Department (the Ministry for Foreign Affairs).

- The originals (enclosed with two copies stamped by the representative missions) of value-added invoices. The tax offices shall return the originals to the representative missions after making the VAT reimbursement.

The value-added invoices, which are considered valid, are those issued by the Finance Ministry or invoices printed by enterprises of certain branches (electricity, water, post, airline, petrol and oil…) and other enterprises approved by the Finance Ministry (the General Department of Tax). The invoices must fully and accurately reflect the prescribed contents and norms .

Within the first 10 days of the first month of a quarter, the representative missions shall compile dossiers of application for tax reimbursement for the preceding quarter and send them to the Protocol Department – the Ministry for Foreign Affairs for certification of VAT-reimbursement dossiers (For example, the deadline for sending dossiers of VAT reimbursement for the first quarter of 2003 is April 11, 2003).

The representative missions, when compiling the dossiers of application for tax reimbursement, shall have to declare data truthfully, accurately and strictly according to the set forms, and bear responsibility for the declared data.

4. Competence and responsibilities of the agencies settling tax reimbursement dossiers:

a) The Protocol Department - The Ministry for Foreign Affairs:

Within 15 working days after receiving complete dossiers, the Protocol Department shall have to examine the dossiers and make certifications of the subjects, lists and quantities of goods and services eligible for VAT reimbursement. After certifying the VAT-reimbursement dossiers according to set forms, the Protocol Department shall transfer the dossiers to the provincial/municipal Tax Departments for settlement.

For cases where subjects are not entitled to VAT reimbursement or the dossiers are incomplete, the Protocol Department shall return the tax-reimbursement dossiers to the representative missions.

b) The provincial/municipal Tax Departments:

The provincial/municipal Tax Departments shall have to examine the dossiers and settle the tax reimbursement for subjects requesting the tax reimbursement within 30 days after receiving complete dossiers. Where in the course of examining the dossiers for tax reimbursement, the Tax Departments have to verify invoices, therefore have to prolong such time limit beyond 30 days, they shall have to notify in writing the representative missions of the extension of the time limit for tax-reimbursement settlement, but such time limit must not exceed 60 days.

After examining the tax-reimbursement dossiers, the Tax Departments shall determine the reimbursable VAT amounts and issue tax-reimbursement decisions according to set form.

c) The State Treasuries:

The State Treasuries of the provinces and centrally-run cities shall reimburse VAT to the representative missions within 3 working days after receiving the tax-reimbursement decisions of the tax offices.

The VAT-reimbursement money shall be taken from the VAT reimbursement fund.

III. IMPLEMENTATION EFFECT:

This Circular shall take effect after its signing and apply to the settlement of VAT reimbursement for subjects entitled to diplomatic privileges and immunities, for goods and/or service purchase invoices from October 1, 2002.

- The provisions in this Circular shall apply to subjects entitled to diplomatic privileges and immunities on the principle of equality and reciprocity. In cases where the international treaties which Vietnam has signed or acceded to contain provisions on VAT different from the provisions of this Circular, the provisions of these international treaties shall apply.

All previous regulations of the Finance Ministry on the implementation of VAT immunity for subjects entitled to diplomatic privileges and immunities contrary to the provisions of this Circular are no longer effective.

For the Minister of Finance
Vice Minister
TRUONG CHI TRUNG