Difficulties in the implementation of the Circular 130/2016 / TT-BTC dated August 12 2016
Thu, 14 Dec 2017 23:02:00 | Print | Email Share:
Name of recommendations: Difficulties in the implementation of the Circular 130/2016 / TT-BTC dated August 12 2016
Status: Responded
Recommended by units: The export enterprises of construction materials in Nghe An Province
Official letter: 1389/PTM - VP, dated: 2017-06-13
Recommended contents:
At present, there are dozens of enterprises specializing in exporting construction materials to Laos. However, in 2016, there were problems of the Circular No. 130/2016 / TT-BTC dated 12 August, therefore Enterprises can not operate, the reason are as follows
The Law No 106 / 2016OH13 issued on April 6, 2016, on the amendment of laws including the Law on VAT and the Law on Special Consumption Tax. The Government has issued Decree 100/2016 dated 1 July 2016 and the Ministry of Finance issued the circular guiding this decree, the Circular No. 130/2016 / TT-BTC dated August 12, 2016. The enterprise was trained by the Tax Department at the end of October 2016. Thus, businesses only have access to information on policies after 10 months. In this period, businesses still apply the law on VAT,and the Circular 26-2015 / TT-BTC dated May 27, 2015 for implementation. However, when carrying out the procedures at the provincial tax department to refund the VAT to the enterprise, the tax department shall have to comply with Circular No. 130/2016.
The Circular 130/2016 / TT-BTC of the Ministry of Finance required an implementation for the whole 2016. Therefore, this request was not legal, the contradictory to the landmark of implementation, the law was issued on April 6, 2016 Decree promulgated guiding the law issued on July 1 2016 and circular guiding the decree dated August 12, 2016. But the circular required to perform in the whole 2016 that is not correct, but it is only correct from the date of promulgation to after. It is best to come into effect after a period of time for businesses to timely prepare after the training.
Our enterprises buy goods of the secondary agents, the secondary agents purchase goods of first dealers, the first dealer purchase goods of manufacturers, but in point C Article 1 of the circular provisions:
"Enterprises produce natural resources and minerals products (including those directly exploited or purchased for processing) with a total value of natural resources and minerals plus energy costs accounting for 51% of the cost of production or more and products are processed from natural resources and minerals are not subject to VAT when exported.
In cases where an enterprise does not export but sells it to another enterprise for export, the enterprise purchasing such goods for export must declare VAT as the same product produced directly by the exporting enterprise and must bear export tax according to regulations. "
"The determination of the value of natural resources, minerals, energy costs and production costs of products shall be based on the previous year's settlement; In cases where newly-set up enterprises have not yet made the final settlement report of the previous year, they shall base themselves on the investment plan. "
Therefore, our businesses have checked the tax refund, but have to wait for the production unit to reply to the message has not resolved. If our businesses are slow or not refunded while the goods have been sold to Laos, they must be bankrupt due to bank loans, repayment of the seller and expenses such as transportation, loading and unloading, and other expenses incurred in the export process.
Responded by units: The Ministry of Finance
Official letter: 2972/TCT - CS, dated: 2017-06-06
Responded contents:
- • In Clause 1, Article 1 of Law No. 106/2016 / QH13 dated 19 April 2016 amending and supplementing a number of articles of the Law on Value Added Tax (VAT) that Providing subjects are not liable to VAT as follows:
“1. Clauses 1, 9 and 23 of Article 5 are amended as follows:
Exported products are exploited natural resources and minerals not yet processed into other products; Export products are goods processed from natural resources and minerals with the total value of natural resources and minerals plus energy costs accounting for 51% of the cost of products or more.
In Clause 4, Article 1 of the Government's Decree No. 100/20 / ND-CP of July 1, 2004, amending and supplementing the Government's Decree No. 209/2013 / ND-CP dated December 18, 2013 providing subjects not liable to VAT as follows:
“11. . Exported products are exploited natural resources and minerals which have not yet been processed into other products or have been processed into other products but the total value of natural resources and minerals plus energy costs account for 51% of the production cost. More products are processed from natural resources and minerals; Export products are goods processed from natural resources and minerals with the total value of natural resources and minerals plus 51% of the cost of production.
Natural resources and minerals defined in this Clause are natural resources and minerals originating in the country, including: metallic minerals; non-metallic minerals; crude oil; natural gas; coal gas.
The value of natural resources and minerals is the cost of natural resources and minerals for processing; for directly exploited natural resources and minerals, it is the direct and indirect expense to exploit mineral resources; Mineral resources purchased for processing is the actual purchase price plus the cost of bringing minerals and minerals into processing.
Energy costs include: Fuel, electricity, heat.
The determination of the resource and mineral prices and energy costs shall be based on the previous year's settlement; In cases where newly-set up enterprises have not yet made the final settlement report of the previous year, they shall base themselves on the land-use plan
Ministry of Finance stipulates details of this item.
- •At Point c, Clause 1, Article 1 of Circular No. 130/2016 / TT-BTC dated 12 August 2016 of the Ministry of Finance, guiding non-VAT subjects as follows:
“c) Section 23 of Article 4 is amended as follows:
23. Natural resources and minerals exported without or after further processing into products whose prime cost is comprised of, by at least 51%, the total value of such natural resources and minerals plus the energy cost; exports derived from natural resources and minerals whose value and the energy cost make up at least 51% of the prime cost of such exports.
a) Natural resources and minerals derived from domestic sources: Metallic minerals and non-metallic minerals; crude oil; natural gas; coal gas.
b) The following formula determines the proportion of the value of natural resource(s) and mineral(s) plus the energy cost to the prime cost of the processed product:
Proportion of the value of natural resource(s) and mineral(s) plus the energy cost to the prime cost of the processed product
In which:
The value of natural resource(s) and mineral(s) means the cost price of the processed natural resource(s) and mineral(s). In other word, the value of natural resource(s) and mineral(s) directly mined is direct and indirect mining expenses while the value of those purchased is the actual purchase price plus the expense for initiating the processing of such natural resource(s) and mineral(s).
The cost of energy includes fuel, electric power and heat.
The value of natural resource(s) and mineral(s) with the energy cost shall base on the data in the accounting book in line with the tabulation of products' prime cost.
The prime cost of a product includes direct material expense, direct labor expense and general manufacturing expense. Indirect expenses for sale, administration, finance and other affairs are not included in the prime cost of a product.
The value of natural resources and minerals, the energy cost and the prime cost of products shall be determined according to the previous year’s finalized accounting statement. The finalized accounting report for the previous year, if recently founded enterprises have not such report, can be replaced by the investment scheme.
c) An enterprise producing by direct mining or purchase processing, natural resources and minerals whose total value plus the energy cost occupies at least 51% of the prime cost of products derived from natural resources and minerals, shall not incur VAT upon the exportation of the products.
If such enterprise does not export but sells the products to another enterprise that then exports such products, the enterprise purchasing then exporting the products shall declare VAT as levied on similar products exported directly by the manufacturing enterprise and shall pay the export tax as per regulations.”
Pursuant to the provisions of Law No. 106/2016 / QH13, effective from July 1, 2016, Decree No. 1/2016 / ND-CP and Circular No. 130/2016 / TT-BTC:
From July 1, 2016, when a construction material exporter is a product produced from domestic natural resources and minerals, the percentage of the total value of natural resources and minerals shall be calculated energy cost:
If the exported products have the total value of natural resources and minerals plus 51% of the prime costs or more, they shall not be subject to VAT, the enterprise shall not be entitled to declare and deduct and reimbursement of VAT.
If the exported product has a total value of natural resources and minerals plus an energy cost of less than 51% of the prime costs or more, it shall be subject to VAT, the enterprise shall declare, deduct and refund GTGT according to regulations.
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