JQTEC Consulting Production and Trading One Member Limited Company (in Khanh Hoa Province) was established on November 21, 2012, using invoice deduction method from 2012 to 2016. Due to knowledge of law Tax is still limited, so the Company misunderstood the way to calculate revenue in 2015 so the company did not submit form 06 / GTGT.

Due to the mistaken belief that the company can still use invoices according to the deduction method, since the beginning of 2016, the Company has issued many invoices to customers and reported tax under the deduction method.

In June 2016, the Company received a notice from the Tax Department to switch to direct invoices from 2016. This caused a lot of difficulties for businesses when they had to recall invoices delivered to customers while the customer received and declared tax.

In addition, new customers require using VAT invoices, so switching to direct invoices, customers will not accept but terminate the contract.

This results in the Company not being able to sell goods and possibly bankruptcy, and the employees will be unemployed.

The company has ceased operations since 2017, waited until 2019 to continue operating and reuse VAT invoices. However, Nha Trang City Tax Department announced the stable period of the tax calculation method is 2 years 2018 - 2019.

Through the system of receiving and responding to businesses’ recommendations, JQTEC Consulting Production and Trading One Member Limited Company proposed competent authorityto consider and remove difficulties for enterprises to continue to apply the . VAT deduction method in 2019.

Regarding this issue, the General Department of Taxation - Ministry of Finance has the following opinions:

Article 10 of the Law on VAT No. 31/2013 / QH13 dated June 19, 2013 stipulates the tax credit method as follows:

“2. The deduction method is applicable to the business establishments that comply with the regime for accounting and invoicing according to the laws on accounting and invoicing, including:

a) Business establishments that earn annual revenue of at least 1VND billion from goods sale, except for business households and individuals;

b) Business establishments that voluntarily employ the deduction method, except for business households and individuals”.

In Clause 4, Article 7 of Decree No. 209/2013 / ND-CP dated December 18, 2013 of the Government stipulating the tax credit method as follows:

“4. Tax credit method applies to:

a) Business establishments that are operating with annual turnover of one VND billion or more from goods sale and service provision and fully observe regulations on accounting, invoices and documents as prescribed by the law on accounting, invoices and documents, except for the business households and individuals that pay tax according to the direct calculation method defined in Article 8 of this Decree.

Duration of stable application of tax calculation method is two consecutive years.

The Ministry of Finance shall guide way to calculate turnover as the basis for determining the business establishments that pay value-added tax under the tax credit method and stable duration of application of tax calculation method specified at this point.

b) Business establishments registering voluntarily for application of the tax credit method include:

- Enterprises and cooperatives that are operating with annual turnover of less than VND billion from goods sale and service provision and fully observe regulations on accounting, invoices and documents as prescribed by the law on accounting, invoices and documents;

- Enterprises that have just been established from investment projects of business establishments which are operating and pay value-added tax under the credit method;

- Enterprises and cooperatives that have just been established and perform investment and procurement of fixed assets, machinery, equipment; foreign organizations and foreigners conducting business in Vietnam under contractor contracts, contractor sub-contracts as guided by the Ministry of Finance;

- Other economic organizations that can account the input and output value-added tax.

c) Foreign organizations and individuals supplying goods and services for prospecting, exploring and developing and exploiting oil and gas; their taxes are declared and paid on behalf of them, under the credit method, by the Vietnamese party”.

In Article 1. Amending and supplementing Clause 3, Clause 4, Article 12 of Circular No. 219/2013 / TT-BTC dated December 31, 2013 of the Ministry of Finance (amended and supplemented in Article 1 of the Circular No. 119/2014 / TT-BTC dated August 25, 2014 and Article 2 of Circular No. 26/2015 / TT-BTC dated February 27, 2015 of the Ministry of Finance) as follows:

"1. Removing the 1, 2, 3, 4, 5 formats after Point dd, Clause 3, Article 12 (as amended and supplemented in the Circular No. 119/2014 / TT-BTC dated August 25, 2014 of the Ministry of Finance ) and replace it with the following text:

Business establishments' tax calculation methods are determined according to VAT declaration dossiers guided in Article 11 of the Finance Ministry's Circular No. 156/2013 / TT-BTC dated November 6, 2013 (amended and supplemented). in Article 1 of Circular No. 119/2014 / TT-BTC dated August 25, 2014 and Article 2 of Circular No. 26/2015 / TT-BTC dated February 27, 2015 of the Ministry of Finance) ”.

The General Department of Taxation issued Official Letter No. 4253 / TCT-CS dated September 20, 2017 introducing new points of Circular No. 93/2017 / TT-BTC dated September 19, 2017.

The General Department of Taxation has opinions for the Company to know and requests the Company to contact the Tax Department of Khanh Hoa Province for guidance on the implementation of the Circular No. 93/2017 / TT-BTC dated September 19, 2017 of the Ministry of Finance as above.