Further to Decree 12/2015/ND-CP dated 12 February 2015 of the Government, the Ministry of Finance issued Circular 26/2015/TT-BTC (“Circular 26”) dated 27 February 2015 providing guidance on Value Added Tax (“VAT”), tax administration, and invoices. Circular 26 took effect on 1 January 2015.
A summary of notable points of Circular 26 is presented below:
• Circular 26 provides additional details on cattle, poultry, and other livestock food, types of fertilizers, and equipment used exclusively in agricultural production that are not subject to VAT.
• In the case where a borrower cannot pay off a collateralized loan upon the due date of the loan agreement and the creditor acquires the collateral, the borrower is not required to issue a VAT invoice.
• In the case where a land-use right is used as a capital contribution, the land price used to calculate the VAT for the real estate property transfer is the lower of the price of the capital contribution agreement and the price of the land-use right transferred.
• Cigarettes, spirits, and beer that are imported and subsequently exported are VAT exempt. The corresponding input VAT is not creditable.
• Revenue that is not subject to VAT calculation and declaration is added up to the total revenue to allocate the deductible VAT.