Laws of Vietnam

Pursuant to Decree No.28-CP of May 11, 1998 of the Government detailing the implementation of the Law on Value Added Tax;

Pursuant to Decree No.73-CP of July 30, 1994 of the Government detailing the implementation of the Ordinance on Privileges and Immunities accorded to Foreign Diplomatic Missions, Consulates and Representative Offices of International Organizations in Vietnam;

Pursuant to Decision No.205/1998/QD-TTg of October 19, 1998 of the Prime Minister promulgating the Regulation on Duty- Free Shops;

After consulting the Ministry for Foreign Affairs, the Ministry of Trade and the General Department of Customs, the Ministry of Finance hereby guides the implementation of the value added tax (VAT) privileges and immunities as follows:

I. The VAT privileges and immunities with regard to head offices, offices of foreign diplomatic missions, consulates and representative offices of international organizations in Vietnam as well as dwelling houses of the heads of foreign diplomatic missions and consulates:

1. Foreign diplomatic missions, consulates and representative offices of international organizations belonging to the United Nations system based in Vietnam shall enjoy the VAT privileges and immunities with regard to their head offices and offices.

2. Heads of diplomatic missions and consulates shall enjoy the VAT privileges and immunities with regard to their dwelling houses in Vietnam.

3. Representative offices of other international organizations in Vietnam shall enjoy the VAT privileges and immunities according to the international agreements which Vietnam has signed or acceded to.

4. Agencies and individuals mentioned in Points 1, 2 and 3 above shall not have to pay VAT when paying for goods and services related to the building of their head offices and offices or when making payments related to the renting of their head offices, offices and/or dwelling houses.

5. Vietnamese or foreign organizations and individuals allowed to conduct business activities in Vietnam, which pay VAT by the tax deduction method, shall be entitled to deduct the input VAT on goods and services used for the production of and/or trading in other goods and/or services subject to VAT and related to the building or leasing of head offices, offices and/or dwelling houses for the subjects mentioned in Points 1, 2 and 3 above, provided that they have dossiers and/or documents proving that such goods and/or services are actually provided for subjects eligible for VAT privileges and immunities; concretely as follows:

- The certificate of subjects entitled to the VAT privileges and immunities, issued by the Protocol Department of the Ministry for Foreign Affairs (the original or its copy with stamp and signature of the competent person(s) of the agency(ies) of the subjects entitled to the diplomatic privileges and immunities).

- The contract(s) on the provision of goods and services, concluded with subjects entitled to the VAT privileges and immunities, and/or:

- The VAT invoice(s) on the provision of goods and services for the subjects entitled to VAT privileges and immunities.

- The record on the hand-over and after-test acceptance of the construction project(s) (if any).

When issuing invoices to the subjects enjoying VAT privileges and immunities, business establishments shall use the VAT invoices and clearly inscribe in the VAT column thereon: VAT privileges and immunities beneficiary.

6. Goods and/or supplies allowed to be imported for the building of head offices, offices or dwelling houses for the subjects mentioned in Points 1, 2 and 3 above shall not be subject to VAT at the importation stage if there’s a written certification by the Protocol Department of the Ministry for Foreign Affairs of the privileges and immunities beneficiaries as well as the use purposes of the imported goods and/or supplies.

II. Exemption of VAT on goods imported or purchased domestically by subjects entitled to diplomatic privileges and immunities:

1. Foreign diplomatic missions, consulates, diplomats, consuls, administrative and technical personnel as well as representative offices of international organizations, that enjoy the VAT privileges and immunities under the international agreements which Vietnam has signed or acceded to, shall not have to pay VAT on goods imported or purchased domestically according to the quantities prescribed in Joint Circular No. 04/TTLB of February 12, 1996 of the Ministry of Trade, the Ministry for Foreign Affairs, the Ministry of Finance and the General Department of Customs and on a number of other essential goods sold at duty-free shops.

2. As for goods imported by these subjects, the customs authorities, when filling the import procedures, shall effect the import tax exemption according to the guidance in Circular No. 04/TTLB, and at the same time, shall not collect VAT on those import goods.

3. For goods purchased domestically at places allowed by the Vietnamese State to sell duty-free goods, the VAT on goods purchased according to the provisions in Point II.1 above.

Duty-free shops shall, when importing goods for sale thereat, not have to pay VAT on those goods.

4. Goods produced in Vietnam and sold at duty-free shops shall be considered export goods and subject to the VAT rate of 0%.

5. Cases where the transfer of such properties as dwelling houses, cars and/or motorbikes between diplomatic missions, consulates and their staff members is allowed shall not be subject to VAT.

III. Implementation effect:

This Circular’s provisions shall apply to subjects enjoying diplomatic privileges and immunities on the principle of reciprocity.

This Circular takes effect 15 days after its signing. The other tax regulations applicable to subjects entitled to privileges and immunities, which are not stipulated in this Circular shall be effected according to the provisions of the current tax legislation as well as the guidance in Circular No. 04/TTLB of February 12, 1996 of the Ministry Trade, the Ministry for Foreign Affairs, the Ministry of Finance and the General Department of Customs.

For the Minister of Finance

Vice Minister