THE MINISTRY OF FINANCE
--------No. 340/BTC-TCT
SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
-------------Hanoi, January 10, 2006
On credit of value added tax (VAT)
To: Provincial/Municipal Tax Departments
The Finance Ministry has received official letters of some enterprises and provincial/municipal
Tax Departments requesting permission for the credit of input VAT with respect to invoices
issued more than three months before the month in which creditable input VAT was declared. On
this issue, the Finance Ministry hereby provides the following opinions:
According to Point 1.2.c, Item III, Section B of the Finance Ministry’s Circular No.
120/2003/TT-BTC of December 12, 2003, guiding the implementation of the Government’s
Decree No. 158/2003/ND-CP of December 10, 2003, detailing the implementation of the VAT
Law and the Law Amending and Supplementing a Number of Articles of the VAT Law: the
creditable input VAT of goods and services which arise in a certain month shall be declared and
credited when determining the payable VAT amount of that month, regardless of whether goods
or services have been ex-warehoused or remain in stock. In cases input VAT invoices or
payment vouchers have been made for goods and services purchased in the month but can not be
declared in that month, they shall be declared for input VAT credit in the subsequent months, for
no more than 3 months following the month in which credible input VAT should have been
declared.
In fact, due to objective reasons, although having fully paid output VAT, some establishments
could not make declaration for the credit of input VAT with respect to input VAT invoices or
payment vouchers within the prescribed time limit.
In order to settle the difficulties of business and production establishments, provincial/municipal
Tax Departments should check if establishments have fully declared output VAT and remitted
tax amounts into the State budget and if goods sale establishments have made VAT declaration
and payment (or have tax receipts of customs authorities), but they are not entitled to input VAT
credit because they could not make declaration within the prescribed time limit for objective
reasons. Then provincial/municipal Tax Departments shall report in writting these cases to the
Finance Ministry for consideration and handling.
Concurrently, local tax authorities shall impose fines on these establishments for administrative
violations in tax declaration.
The Finance Ministry hereby notifies provincial/municipal Tax Departments thereof for
compliance.
DEPUTY GENERAL DIRECTOR OF
TAXATION
Nguyen Thi Cuc