The Ministry of Finance issued Circular 26/2015/TT-BTCon 27 February 2015 (“Ci rcular 26”) providing guidance on the value added tax and tax administration changes as promulgated under Decree 12/2015/ND- CP (please refer to our News Brief dated 27 February 2015) and amending, supplementing some provisions under Circular 39/2014/TT-BTCon invoicing. A separate Circular will be issued to provide guidance on corporate income tax.

Ci rcular 26is applicablefrom1 January 2015.Key points of Circular 26 are as follows:

1. Value AddedTax (“VAT”)

• The supply of fertilizer, feed for livestock, poultry, seafood and other animals is VAT exempt instead of subject to 5%VAT. Input VAT in relation to the purchase of goods and services is still creditable if the VAT invoices are issued or the payments of import VAT (for imported goods) are made before 1 January 2015.
• For an investment project that is liquidated without having generated any taxable revenue, the input VAT previously incurred is dealt with as follows:
(i) i f a refund for input VAT credit has not been claimed, such input VAT credit is forfeited at the time of liquidation;
(ii) for any VAT refund granted pre-liquidation,only the input VAT related to the disposal of VAT able assets post liquidation are not subject to VAT claw-back. All other inputVATmust be returned to the tax
authority.

For more information, please click PwC Vietnam Newsbrief_Circular 26 guiding various tax changes_EN for English version and here  for Vietnamese version.