CIRCULARS

GUIDELINES FOR IMPLEMENTATION OF TAX OBLIGATIONS APPLICABLE TO FOREIGN ORGANIZATIONS AND INDIVIDUAL BUSINESS IN VIETNAM OR INCOME IN VIETNAM

Pursuant to the Law on Value Added Tax No. 13/2008/QH12 dated June 03, 6; Law amending and supplementing a number of articles of the Law on VAT No. 2008/31/QH2013 dated June 13, 19; Decree No. 6/2013/ND-CP dated December 209, 2013 of the Government detailing and guiding the implementation of a number of articles of the Law on Value Added Tax;

Pursuant to the Law on Corporate Income Tax No. 14/2008/QH12 dated June 03, 6; Law amending and supplementing a number of articles of Law on CIT No. 2008/32/QH2013 dated June 13, 19; Decree No. 6/2013/ND-CP dated December 218, 2013 of the Government detailing and guiding the implementation of the Law on Corporate Income Tax;

Pursuant to the Law on Tax Administration No. 78/2006/QH11 dated November 29, 11; Law amending and supplementing a number of articles of the Law on Tax Administration No. 2006/21/QH2012 dated November 13, 20;

Pursuant to the Government's Decree No. 215/2013/ND-CP dated December 23, 12 stipulating the functions, tasks, powers and organizational structure of the Ministry of Finance;

At the proposal of the Director of the General Department of Taxation;

The Minister of Finance promulgates a Circular guiding the implementation of tax obligations applicable to foreign organizations and individuals doing business in Vietnam or earning income in Vietnam as follows:

Chapter I

GENERAL RULES

Article 1. Subject of application

The guidance in this Circular applies to the following entities (except for the case specified in Article 2, Chapter I):

1. Foreign business organizations having a permanent establishment in Vietnam or without a permanent establishment in Vietnam; foreign individuals doing business in Vietnam or not being residents in Vietnam (hereinafter collectively referred to as foreign contractors and foreign sub-contractors) doing business in Vietnam or earning income arising in Vietnam on the basis of a contract, agreement, or commitment between a foreign contractor and a Vietnamese organization or individual or between a foreign contractor and a foreign sub-contractor to perform a part of the work of a foreign contractor. Contractor contract.

2. Foreign organizations and individuals supply goods in Vietnam in the form of on-spot import and export and generate income in Vietnam on the basis of contracts signed between foreign organizations and individuals and enterprises in Vietnam. Vietnam (except for the case of processing and exporting goods to foreign organizations and individuals) or distributing goods in Vietnam or providing goods according to the delivery conditions of international trade terms. – Incoterms that the seller bears the risk related to the goods entering the territory of Vietnam.

Example 1:

– Case 1: overseas enterprise X signs a contract to buy fabric from Vietnamese enterprise A, and at the same time appoints enterprise A to deliver goods to Vietnamese enterprise B (in the form of on-spot import and export according to regulations). under the law). Enterprise X has income generated in Vietnam on the basis of a contract signed between enterprise X and enterprise B (enterprise X sells cloth to enterprise B).

In this case, enterprise X is subject to the provisions of this Circular and enterprise B is responsible for declaring, withholding and paying tax on behalf of enterprise X according to the provisions of this Circular.

– Case 2: overseas enterprise Y signs a fabric processing contract with Vietnamese enterprise C, and at the same time appoints enterprise C to deliver goods to Vietnamese enterprise D to continue production (in the form of import and export). on the spot as prescribed by law). Enterprise Y has income generated in Vietnam on the basis of a contract signed between enterprise Y and enterprise D (enterprise Y sells goods to enterprise D).

In this case, enterprise Y is subject to the provisions of this Circular and enterprise D is responsible for declaring, withholding and paying tax on behalf of enterprise Y according to the provisions of this Circular.

– Case 3: overseas enterprise Z signs a processing contract or buys fabrics with Vietnamese enterprise E (enterprise Z provides materials for enterprise E for processing) and appoints enterprise E to deliver the goods. for Vietnamese enterprise G to continue processing (in the form of on-site import and export processing as prescribed by law). After the processing is completed, Enterprise G returns the goods to Company Z and Enterprise Z must pay the processing fee to Company G under the processing contract.

In this case, enterprise Z is not subject to the provisions of this Circular.

3. Foreign organizations and individuals conducting part or all of the business of distributing goods and providing services in Vietnam, in which foreign organizations and individuals are still owners of goods delivered to them. the Vietnamese organization or is responsible for the costs of distribution, advertising, marketing, service quality, quality of goods delivered to the Vietnamese organization or fixing the selling price of goods or the price of providing services; including cases of authorizing or hiring a number of Vietnamese organizations to perform a part of distribution services or other services related to the sale of goods in Vietnam.

Example 2:

Overseas enterprise A delivers goods or authorizes the performance of some related services (such as transportation, distribution, marketing, advertising, etc.) to Vietnamese enterprise B of which Enterprise A is the owner. for goods delivered to Enterprise B or Enterprise A, responsible for the cost, service quality, and quality of goods delivered to Enterprise B or Enterprise A to fix the selling price of goods or the price of providing services. then Enterprise A is the subject of application in accordance with the provisions of this Circular.

4. Foreign organizations and individuals, through Vietnamese organizations and individuals, negotiate and sign contracts in the name of foreign organizations and individuals.

5. Foreign organizations and individuals exercise the right to export, import and distribute in the Vietnamese market, purchase goods for export, and sell goods to Vietnamese traders in accordance with the law on commerce.

Article 2. Objects not applicable

The guidance in this Circular does not apply to:

1. Foreign organizations and individuals doing business in Vietnam under the provisions of the Investment Law, the Petroleum Law, and the Law on Credit Institutions.

2. Foreign organizations and individuals provide goods to Vietnamese organizations and individuals without accompanying services provided in Vietnam in the following forms:

– Delivery at a foreign border gate: the seller bears all responsibilities, costs and risks related to the export of goods and delivery at the foreign border gate; The buyer bears all responsibilities, costs and risks related to the receipt and transportation of goods from a foreign border gate to Vietnam (including the case of delivery at a foreign border gate with a warranty term of: responsibilities and obligations of the seller).

– Delivery at the Vietnamese border gate: the seller bears all responsibilities, costs and risks related to the goods until the delivery point at the Vietnamese border gate; The buyer bears all responsibilities, costs and risks related to the receipt and transportation of goods from the Vietnamese border gate (including the case of delivery at the Vietnamese border gate with the warranty term as the responsibility and liability). seller's service).

Example 3:

Company C in Vietnam signs a contract to import a shipment of excavators and bulldozers with Company D abroad, the delivery is done at the Vietnamese border gate. Company D is responsible for all costs and expenses related to the shipment until the delivery point at the Vietnamese border gate; Company C is responsible for all costs related to receiving and transporting goods from Vietnam's border gate. The contract has an agreement that the above shipment is warranted by Company D for 1 year, in addition, Company D does not perform any other services in Vietnam related to the above shipment. In this case, Company D's goods supply activities are not subject to the Circular's application.

3. Foreign organizations and individuals earning income from services provided and consumed outside Vietnam.

Example 4:

Company H of Hong Kong provides cargo handling services at a port in Hong Kong for Company A's international fleet in Vietnam. Company A must pay Company H a service charge for cargo handling at the port in Hong Kong.

In this case, the cargo handling service at Hong Kong port is a service provided and consumed in Hong Kong, so it is not subject to tax in Vietnam.

Example 5:

Foreign organization providing professional services, bond issuance and management, legal advice, depository agency, roadshow organization (a brand activation activity) for Company A in Vietnam. In the countries where Company A issues GDR (Global Depositary Receipt) and international bonds, these services performed by foreign organizations are not subject to the Circular No. private.

4. Foreign organizations and individuals provide the following services to Vietnamese organizations and individuals whose services are performed abroad:

- Repair of means of transport (aircraft, aircraft engines, spare parts for aircraft, ships), machinery and equipment (including marine cables, transmission equipment), whether or not included replacement materials and equipment attached;

– Advertising and marketing (except advertising and marketing on the internet);

Example 6:

If a Vietnamese enterprise signs a contract with an organization in Singapore to provide advertising services for products in the Singapore market, this advertising service of a Singapore organization is not subject to this Circular. In case an organization in Singapore advertises products for consumption in the Vietnamese market on the internet, the income from this advertising service is subject to the application of this Circular.

– Investment and trade promotion;

– Brokerage: selling goods and providing services abroad;

Example 7:

If a Vietnamese enterprise signs a contract to hire an enterprise in Thailand to perform brokerage services in order to sell products of the Vietnamese enterprise in the Thai market or the world market, this brokerage service of the Thai enterprise shall not be provided. subject to the application of this Circular; In case a Vietnamese enterprise signs a contract to hire an enterprise in Thailand to provide brokerage services to transfer real estate of a Vietnamese enterprise in Vietnam, this brokerage service is subject to the application of this Circular.

– Training (except online training);

Example 8:

Company A in Vietnam signs a contract with University B of Singapore for Vietnamese employees to come to Singapore to study at University B of Singapore, the training services of University B are not subject to this Circular. ; In case Company A in Vietnam signs a contract with University B of Singapore for University B to teach Vietnamese employees in Vietnam in the form of online learning, the university's online training service B is subject to the Circular's application.

– Sharing charges (payment charges) for international telecommunications services between Vietnam and foreign countries that are performed outside of Vietnam, services of leasing transmission lines and satellite bands from foreign countries according to regulations. provisions of the Law on Telecommunications; To divide international postal service charges (payment charges) between Vietnam and foreign countries according to the provisions of the Postal Law, international treaties on Post to which the Socialist Republic of Vietnam is a signatory. these services are performed outside Vietnam.

5. Foreign organizations and individuals use bonded warehouses or inland ports (ICDs) as warehouses of goods to support international transport, transit, border-gate transit, goods storage or for other enterprises to join labour.

Article 3. Explain words

In this Circular, the terms below are construed as follows:

1. “Contractor contract” means a contract, agreement or commitment between a foreign contractor and a Vietnamese party.

2. “Subcontractor contract” means a contract, agreement or commitment between a Subcontractor and a Foreign Contractor.

Subcontractors include foreign subcontractors and Vietnamese subcontractors.

3. Vietnam's territory includes the land territory, islands, internal waters, territorial sea and the airspace above it, the waters beyond the territorial sea, including the seabed and subsoil of the seabed that Vietnam exercises its sovereignty over. rights, sovereign rights and jurisdiction in accordance with Vietnamese law and international law.

Article 4. Taxpayers

1. Foreign contractors, foreign sub-contractors that satisfy the conditions specified in Article 8, Section 2, Chapter II or Article 14, Section 4, Chapter II, do business in Vietnam or earn income in Vietnam. The business is conducted on the basis of a contractor contract with a Vietnamese organization or individual or with another foreign organization or individual doing business in Vietnam on the basis of a subcontractor contract.

The determination of foreign contractors, foreign sub-contractors having permanent establishments in Vietnam, or being residents in Vietnam shall comply with the provisions of the Law on Corporate Income Tax, the Law on Personal Income Tax. and implementation manuals.

In case the Agreement on avoidance of double taxation to which the Socialist Republic of Vietnam is a signatory contains other provisions on permanent establishments and residents, the provisions of such Agreement shall apply.

2. Organizations established and operating under Vietnamese law, organizations registered to operate under Vietnamese law, other organizations and individuals engaged in production and business: purchasing services or services associated with goods or paying fees imports arising in Vietnam on the basis of a contractor contract or a subcontractor contract; purchase goods in the form of import and export on the spot or under the terms of international trade (Incoterms); distribute goods and provide services on behalf of foreign organizations and individuals in Vietnam (hereinafter referred to as Vietnamese parties) including:

– Business organizations established under the Law on Enterprises, the Law on Investment and the Law on Cooperatives;

- Economic organizations of political organizations, socio-political organizations, social organizations, socio-professional organizations, armed units, non-business organizations and other organizations;

– Petroleum contractors operating under the Petroleum Law;

– Branches of foreign companies licensed to operate in Vietnam;

– Foreign organizations or representatives of foreign organizations permitted to operate in Vietnam;

– Ticket offices, agents in Vietnam of foreign airlines have the right to transport to and from Vietnam, directly or in partnership;

- Organizations and individuals providing sea transportation services of foreign shipping companies; agents in Vietnam of freight forwarders, foreign delivery companies;

– Securities company, securities issuer, fund management company, commercial bank where the securities investment fund or foreign organization opens a securities investment account;

– Other organizations in Vietnam;

– Individuals doing business in Vietnam.

Taxpayers guided in Clause 2, Article 4, Chapter I are responsible for withholding value-added tax and corporate income tax as guided in Section 3 Chapter II before making payments to foreign contractors and sub-contractors. foreign.

Article 5. Applicable taxes

1. Foreign contractors and foreign sub-contractors are business organizations that fulfill their value-added tax (VAT) and corporate income tax (CIT) obligations under the guidance in this Circular.

2. Foreign contractors, foreign sub-contractors being foreign individuals doing business shall fulfill their VAT obligations under the guidance in this Circular, personal income tax (PIT) in accordance with the law on PIT.

3. For other taxes, fees and charges, foreign contractors and foreign sub-contractors shall comply with current legal documents on taxes, fees and other fees.

chapter II

TAX BASIS AND METHODOLOGY

Section 1. SUBJECTS TO VAT AND INCOME WITHOUT CIT

Article 6. Objects subject to VAT

1. Services or services associated with goods subject to VAT provided by foreign contractors or foreign sub-contractors on the basis of contractor contracts or sub-contractors used for production, business and consumption in Vietnam (except for the case specified in Article 2, Chapter I), including:

– Services or services associated with goods subject to VAT provided in Vietnam by foreign contractors or foreign sub-contractors and consumed in Vietnam;

– Services or services associated with goods subject to VAT provided by foreign contractors or foreign sub-contractors outside Vietnam and consumed in Vietnam.

2. In case the goods are provided under the contract in the form: the delivery point is located in the territory of Vietnam (except for the case specified in Clause 5, Article 2 of Chapter I); or the supply of goods accompanied by services performed in Vietnam such as installation, testing, warranty, maintenance, replacement, other services associated with the supply of goods (including free accompanying services), even if the provision of the above services is included or not included in the value of the goods supply contract, the value of the goods is only subject to VAT at the stage of importation in accordance with regulations. , the value of services subject to VAT according to the guidance in this Circular. In case the contract cannot separate the value of goods and the value of the accompanying services (including the case of free accompanying services), VAT shall be calculated for the whole contract.

Example 9:

Enterprise A in Vietnam signs a contract to buy machinery and equipment for the Cement Plant Project with Enterprise B abroad. The total contract value is USD 100 million, including the value of USD 80 million of machinery and equipment (including equipment subject to VAT at the rate of 10%), the value of installation guidance, supervision and inspection services. installation, warranty and maintenance is 20 million USD.

The determination of VAT liability of Company B for the value of the contract signed with enterprise A is as follows:

– VAT is calculated on the value of services (20 million USD), not on the value of imported machinery and equipment.

– In case the contract cannot separate the value of the machinery and equipment line and the service value, VAT is calculated on the entire contract value (USD 100 million).

Article 7. Income subject to CIT

1. Taxable income of foreign contractors and foreign sub-contractors is income arising from goods supply and distribution activities; providing services and goods-linked services in Vietnam on the basis of contractor contracts or sub-contractors (except for the case specified in Article 2, Chapter I).

2. In case the goods are provided in the form: the delivery point is located within the territory of Vietnam (except for the case specified in Clause 5, Article 2, Chapter I); or the supply of goods accompanied by a number of services conducted in Vietnam such as advertising and marketing services (marketing), trade promotion activities, after-sales services, installation services, test runs, warranty, maintenance, replacement and other services accompanying the supply of the goods (including in the case of free accompanying services), whether or not the provision of the foregoing services is included in the value of the goods supply contract, the taxable income of the foreign contractor or foreign sub-contractor is the entire value of goods and services.

Example 10:

Company A in Vietnam signs a contract to purchase machinery and equipment for the Cement Plant Project with Company B abroad. The total contract value is 100 million USD (excluding VAT), including the value of machinery and equipment is 80 million USD, the value of installation guidance, installation supervision, warranty and maintenance services is USD 20 million. XNUMX million USD.

The CIT obligation of Company B for the Contract Value is determined as follows:

– CIT is calculated separately for the value of imported machinery and equipment (USD 80 million) and separately for the value of services (USD 20 million) according to each prescribed CIT rate.

– In case the contract does not specify the value of the line of machinery and equipment and the value of the service, the CIT shall be calculated on the total contract value (US$100 million) at the prescribed CIT rate.

3. Incomes generated in Vietnam of foreign contractors and foreign sub-contractors are incomes received in any form on the basis of contractor contracts or sub-contractors (except for cases specified in Clause 2 of this Article). in Article XNUMX Chapter I), regardless of the location where the foreign contractor or foreign sub-contractor conducts business activities. Taxable income of foreign contractors and foreign sub-contractors in some specific cases as follows:

- Income from transfer of ownership and right to use property; transfer of the right to participate in economic contracts/projects in Vietnam, transfer of property rights in Vietnam.

– Income from royalties is income of any kind paid for the right to use, transfer intellectual property rights and transfer technology, software copyright (including: payments for rights) use and transfer of copyright and work owner rights; transfer of industrial property rights; transfer of technology, software copyright).

"Copyright, work owner's rights", "Industrial property rights", "technology transfer" are prescribed in the Civil Code, Intellectual Property Law, Law on Technology Transfer and other documents instruction.

Income from transfer and liquidation of assets.

Interest Income: is the Lender's income from loans of any kind, whether or not secured by a mortgage, whether or not the lender is entitled to interest. of the borrower; income from deposit interest (except interest on deposits of foreign individuals and interest on deposits arising from deposit accounts to maintain operations in Vietnam of diplomatic missions, representative offices of foreign countries). international organizations, non-governmental organizations in Vietnam), including bonuses associated with deposit interest (if any); income from interest on deferred payment according to the provisions of the contracts; income from bond interest, bond price discount (except for tax-exempt bonds), treasury bills; income from certificates of deposit.

Loan interest includes fees that the Vietnamese Party must pay in accordance with the provisions of the contract.

- Income from securities transfer.

– Fines and compensations collected from the counterparty who breached the contract.

- Other incomes as prescribed by law.

Section 2. PAYING VAT BY DECLARATION METHOD, PAYING CIT ON THE BASIS OF DECLARATION OF REVENUE AND Expense FOR DETERMINING TAXAL INC

(hereinafter referred to as declaration method)

Article 8. Subjects and conditions of application

Foreign contractors and foreign sub-contractors pay tax under the guidance in Section 2 Chapter II if they fully satisfy the following conditions:

1. Having a permanent establishment in Vietnam, or being a resident in Vietnam;

2. The duration of business in Vietnam under the contractor contract or sub-contractor contract is 183 days or more from the effective date of the contractor contract or sub-contractor contract;

3. Apply the Vietnamese accounting system and make tax registration, and be granted a tax identification number by the tax authority.

Article 9. Value added tax

Comply with the provisions of the Law on VAT and its guiding documents.

Article 10. Corporate income tax

Comply with the provisions of the Law on CIT and its guiding documents.

Section 3. PAYING VAT, PAYING CIT BY THE REVENUE RATE PROTECT

(hereinafter referred to as the direct method)

Article 11. Subjects and conditions of application

If the foreign contractor or foreign sub-contractor fails to satisfy one of the conditions specified in Article 8 Section 2 Chapter II, the Vietnamese party shall pay tax on behalf of the foreign contractor or foreign sub-contractor according to the guidance in Article 12. 13, Article 3 Section XNUMX Chapter II.

Article 12. Value added tax

The tax base is the turnover for calculation of value added tax and the percentage for calculating VAT on the turnover.

Foreign contractors and foreign sub-contractors that are subject to VAT by the method of direct calculation on VAT are not eligible to deduct VAT on goods and services purchased for the performance of contractor contracts or housing contracts. Subcontractors.

1. Revenue subject to VAT

a) Revenue subject to VAT:

Revenue subject to VAT is the total revenue from the provision of services and services associated with goods subject to VAT received by the foreign contractor or foreign sub-contractor, excluding payable taxes. including expenses paid by the Vietnamese party on behalf of the foreign contractor, foreign sub-contractor (if any).

b) Determination of turnover subject to VAT in some specific cases:

b.1) In case, as agreed in the contractor contract, sub-contractor contract, the revenue received by the foreign contractor or foreign sub-contractor does not include the payable VAT, the turnover for calculating VAT must be converted into turnover with VAT and determined according to the following formula:

Example 11:

Foreign contractor A provides the Vietnamese party with the service of supervising the construction volume of cement factory Z, the contract price excluding VAT (but including CIT) is 300.000 USD. In addition, the Vietnamese party arranges accommodation and work for the management staff of foreign contractor A with a value exclusive of VAT of 40.000 USD. Under the Contract, the Vietnamese Party is responsible for paying VAT on behalf of the Foreign Contractor. The determination of VAT calculation revenue of foreign contractor A is as follows:

Determination of taxable revenue:

b.2) In case a foreign contractor signs a contract with a Vietnamese sub-contractor or a foreign sub-contractor pays tax according to the declaration method or the foreign sub-contractor pays tax by the mixed method to a part of the value of the work or item for the subcontractor specified in the contract the contractor signed with the Vietnamese party and the list of Vietnamese subcontractors and foreign subcontractors performing the same part of the work or item. If the requirements are listed together with the contractor contract, the foreign contractor's VAT calculation revenue does not include the value of the work performed by the Vietnamese sub-contractor or the foreign sub-contractor.

In case a foreign contractor signs contracts with suppliers in Vietnam to purchase supplies, materials, machinery and equipment to perform the contractor contract, and goods and services for internal consumption , using items not belonging to the items and tasks performed by the foreign contractor under the contractor contract, the value of these goods and services shall not be deducted when determining the foreign contractor's VAT calculation revenue.

Example 12:

Foreign contractor A signs a contract to build Z cement factory with the Vietnamese party with a total contract value of 10 million USD (price includes VAT). According to the Contractor Contract, Foreign Contractor A will assign a portion of the construction and installation value (as specified in the Contract signed by the Contractor with the Vietnamese Party) to the Vietnamese Subcontractor B with the value of USD 01 million (the price of VND XNUMX million). VAT not included); In addition, during the construction of Cement Factory Z to perform the contractor contract, foreign contractor A buys supplies and materials (brick, cement, sand...) to perform construction and installation and purchase all kinds of goods. goods and services such as car rental, hotel for experts, purchase of stationery, etc. for contract performance.

Taxable turnover of foreign contractor A in this case is determined as follows:

Revenue subject to VAT = 10 million USD – 1 million USD = 9 million USD

Taxable revenue of foreign contractor A is not deducted from supplies, materials, goods and services such as car rental, hotel rental for experts, purchase of stationery, etc.

b.3) In case the foreign contractor signs a contract with a foreign sub-contractor to pay tax by the direct method, the Vietnamese party shall declare and pay VAT on behalf of the foreign contractor or foreign sub-contractor according to the rate % to calculate VAT on turnover corresponding to the business line that the foreign contractor or foreign sub-contractor performs under the contract or sub-contract. The foreign sub-contractor is not required to declare and pay VAT on the value of the work performed by the foreign sub-contractor in accordance with the provisions of the sub-contractor contract signed with the foreign contractor that the Vietnamese party has declared and paid on its behalf.

b.4) The turnover for calculating VAT in case of leasing machinery, equipment and means of transport is the entire rental. In case the rental revenue of machinery, equipment and means of transport includes expenses directly paid by the lessor such as vehicle insurance, maintenance, registration certificate, vehicle operator, machine machinery and the cost of transporting machinery and equipment from abroad to Vietnam, the turnover for calculating VAT does not include these costs if there are actual documents to prove it.

b.5) ​​For international forwarding and logistics services from Vietnam to foreign countries (regardless of whether the sender or the receiver pays for the service), the revenue subject to VAT is the entire revenue of the foreign contractor. received does not include international freight payable to the carrier (air, sea).

b.6) For international delivery services from Vietnam to foreign countries (regardless of whether the sender or the receiver pays for the service), the revenue subject to VAT is the entire revenue received by the foreign contractor.

Example 13:

Company A abroad provides the service of delivering parcels from abroad to Vietnam and vice versa. The VAT calculation revenue of Company A is determined as follows:

+ For delivery services from abroad to Vietnam (regardless of whether the sender is abroad or the recipient in Vietnam pays for the service) is not subject to VAT;

+ For delivery services from Vietnam to abroad (regardless of whether the sender in Vietnam or the recipient abroad pays for the service), the revenue for calculating VAT is the entire revenue received by Company A.

Example 14:

Company B (Vietnamese company) provides postal delivery services from abroad to Vietnam and vice versa. To perform this service, Company B pays (shares the freight) to Company C abroad an amount of x USD. Company C's VAT is determined as follows:

+ For delivery services from abroad to Vietnam (regardless of whether the sender is abroad or the recipient in Vietnam pays for the service), the amount x USD received by Company C is not included in the revenue subject to VAT. ;

+ For delivery services from Vietnam to abroad (regardless of whether the sender in Vietnam or the recipient abroad pays for the service), the amount x USD received by Company C belongs to the revenue subject to VAT; Company B is responsible for declaring, withholding and paying VAT on the amount x paid to Company C.

2. Percentage for calculating VAT on turnover:

a) Percentage for calculating VAT on turnover for business lines:

b) Determine the percentage to calculate VAT on turnover for some specific cases:

b.1) For contractor contracts, subcontractor contracts covering many different business activities or a part of the contract value that are not subject to VAT, the application of the percentage to calculate VAT on the turnover when determining the payable VAT amount is based on the turnover for calculating VAT for each business activity performed by the foreign contractor or foreign sub-contractor in accordance with the provisions of the contractor's contract or contract. subcontractors. In case it is not possible to separate the value of each business activity, the highest percentage for calculating VAT on turnover for the business line shall be applied for the entire contract value.

Particularly for construction and installation activities that include raw materials or machinery and equipment accompanying the construction work: In case the contractor contract can separate the value of each business activity, the foreign contractor not have to pay VAT on the value of raw materials or machinery and equipment that have paid VAT at the stage of importation or are not subject to VAT; for each part of the remaining work value under the contract, a percentage shall be applied to calculate VAT on the turnover corresponding to that business activity. In case the contractor's contract cannot separate the value of each business activity, the percentage of VAT on turnover shall be 3% calculated on the entire contract value (including the value of raw materials). or imported machinery and equipment). In case the foreign contractor signs a contract with the sub-contractors to hand over the entire value of the work or the items included in the bid for raw materials or machinery and equipment, the foreign contractor will only perform the part of the cost. the remaining service value according to the contractor contract, the percentage for calculating VAT is applied to the service industry (5%).

Example 15:

Foreign contractor A signs a contract with Vietnamese Party to build a power plant X with a value of USD 75 million (price includes VAT).

Case 1: The contractor contract separates the value of each business activity as follows:

+ Value of machinery and equipment provided for the project: USD 50 million.

In which: Value of machinery and equipment subject to VAT: USD 30 million.

Value of machinery and equipment not subject to VAT: 15 million USD.

Value of warranty service accompanying machinery and equipment: 5 million USD

+ Value of technology line design services, other designs: 5 million USD.

+ Value of workshops, other ancillary systems, construction and installation: 15 million USD.

+ Value of supervision services, installation instructions: 3 million USD.

+ Value of technical training and commissioning services: 2 million USD.

When importing, the value of machinery and equipment for which VAT has been paid at the import stage is 30 million USD; The value of machinery and equipment not subject to VAT is 15 million USD.

The VAT obligation of foreign contractor A for the value of the contract signed with the Vietnamese party is only calculated on the value of services and the value of construction and installation. In which: the service value (warranty service, design service, supervision service, installation guide, technical training service, trial operation) is 15 million USD and the percentage is applied to VAT calculation on turnover for the service industry is 5%; the value of construction and installation is USD 15 million and the percentage applied to calculate VAT on turnover for construction and installation activities is 3% (excluding VAT on the value of imported machinery and equipment). password).

Case 2: The contractor contract does not separate the value of each business activity, only specifies the contract value, including machinery, equipment, design services, supervision services, installation instructions, service technical training, trial operation; if there are not enough documents to prove the value of machinery and equipment supplied to the project for which VAT has been paid at the import stage, the VAT obligation of foreign contractor A for the value of the contract signed with the Vietnamese party Nam is calculated on the entire value of the contractor contract is 75 million USD and applies a percentage to calculate VAT of 3%.

Case 3: Foreign contractor A signs a contract with subcontractors to re-deliver the parts of the work covered with raw materials, foreign contractor A only performs the service value (eg the value of the contract). supervision services, installation instructions), the value of this service applies the percentage to calculate VAT on revenue of 5%.

b.2) For a contract to supply machinery and equipment with services performed in Vietnam, if the value of machinery and equipment can be separated from the value of services when determining the payable VAT amount, then apply the percentage to calculate VAT on the turnover of each part of the contract value. In case the contract cannot separate the value of machinery and equipment from the value of services, the percentage of % to calculate VAT on taxable turnover is 3%.

Example 16:

Foreign contractor H of Korea that does not comply with the Vietnamese accounting regime shall perform a contract signed with enterprise B in Vietnam for the supply of machinery and equipment lines with installation, operation, and maintenance services. test run with a value of 10.000.000 USD. In the contract that cannot separate the value of machinery and equipment and the value of installation, commissioning and commissioning services, the percentage for calculating applicable VAT is 3%.

3. VAT on foreign contractors and foreign sub-contractors providing goods and services to conduct search, exploration, development and exploitation of oil and gas fields

a. In case a foreign contractor or foreign sub-contractor provides goods and services to conduct search, exploration, development and exploitation of oil and gas fields, if one of the following conditions is not satisfied: mentioned in Article 8, Section 2, Chapter II, the Vietnamese party is responsible for withholding and paying VAT before payment. The payable tax amount is equal to the total payment excluding VAT multiplied by (x) the prescribed VAT rate for goods and services provided by foreign contractors.

b. In case a foreign contractor or foreign sub-contractor provides goods and services for conducting activities of prospecting, exploration, development and exploitation of oil and gas fields that satisfy the three conditions specified in Article 8 Section 2 Chapter II or satisfying the two conditions mentioned in Clauses 1 and 2, Article 8, Section 2, Chapter II and organizing accounting according to the provisions of the law on accounting and the guidance of the Ministry of Finance:

- During the time when the foreign contractor or foreign sub-contractor has not been granted a tax registration certificate by the tax authority to declare and pay VAT by the deduction method, if the Vietnamese party pays the foreign contractor. , Foreign subcontractors, the Vietnamese party is responsible for withholding and paying VAT before payment. The payable tax amount is equal to the total payment excluding value-added tax multiplied by (x) the specified value-added tax rate for goods and services provided by foreign contractors.

– When the foreign contractor or foreign sub-contractor is granted a tax registration certificate by the tax authority, the foreign contractor or foreign sub-contractor shall transfer invoices and documents arising in the VAT declaration period to the Vietnamese party. For the Vietnamese party to declare deduction and pay VAT on behalf of foreign contractors and foreign sub-contractors.

Foreign contractors and foreign sub-contractors are not allowed to deduct input VAT incurred before being granted tax registration certificates.

Example 17:

In January 1, foreign contractor A signed a contract with a Vietnamese party to provide oil and gas services with a contract value of 2015 million USD. While foreign contractor A has not yet been granted a tax registration certificate by the tax authority, foreign contractor A incurs an amount of input VAT on goods and services purchased to perform the contract. USD. On March 1, 5.000, the Vietnamese party pays the foreign contractor A with a value of USD 15 (VAT excluded and CIT included), then the Vietnamese party is responsible for declaring and paying VAT on its behalf. for foreign contractor A with the VAT amount determined at USD 3 x 2015% = USD 100.000.

On May 01, 5, foreign contractor A registered and was granted a tax registration certificate by the tax authority. In May 2015, the Vietnamese party paid foreign contractor A a value of USD 5 (VAT excluded and included CIT). Thus, the output VAT of foreign contractor A incurred in May is 2015 USD (=200.000 USD x 5%).

Input VAT of foreign contractor A arising from May 01, 5 to May 2015, 30 is 5 USD (VAT is incurred around the time that foreign contractor A has a tax code). Foreign contractor A transfers all invoices and documents arising in May 2015 to the Vietnamese party for the Vietnamese party to declare and pay VAT on behalf of foreign contractor A.

The amount of VAT payable by foreign contractor A for the May 5 VAT declaration period is USD 2015 (= USD 18.000 – USD 20.000).

Foreign contractor A is not allowed to deduct USD 5.000 of input VAT incurred before May 01, 5.

Article 13. Corporate income tax

The tax base is the turnover for calculating CIT and the rate (%) of CIT calculated on the taxable turnover.

1. Revenue subject to CIT

a) Revenue subject to CIT

Revenue subject to CIT is the total revenue excluding VAT received by foreign contractors and foreign sub-contractors, excluding payable taxes. The taxable revenue includes expenses paid by the Vietnamese party on behalf of the foreign contractor, foreign sub-contractor (if any).

b) Determination of revenue subject to CIT in some specific cases:

b.1) If, as agreed in the contractor contract or sub-contractor's contract, the revenue received by the foreign contractor or foreign sub-contractor does not include the payable CIT, the revenue subject to CIT shall be taxed. determined by the following formula:

Example 18:

Foreign contractor A provides the Vietnamese party with the service of monitoring the construction volume of cement factory Z, the contract price excluding VAT and CIT is 285.000 USD. In addition, the Vietnamese party arranges accommodation and work for the management staff of the foreign contractor with a value of 38.000 USD (excluding VAT and CIT). According to the Contract, the Vietnamese Party is responsible for paying CIT and VAT on behalf of the foreign contractor. The determination of CIT amount payable by foreign contractors is as follows:

Determination of taxable revenue:

b.2) In case a foreign contractor signs a contract with a Vietnamese sub-contractor or a foreign sub-contractor pays tax according to the declaration method or the foreign sub-contractor pays tax by the mixed method to part of the value of the work or item specified in the contract the contractor signed with the Vietnamese party and the list of Vietnamese subcontractors and foreign subcontractors performing the corresponding part of the work or item is listed. attached to the contractor contract, the foreign contractor's CIT taxable turnover does not include the value of the work performed by the Vietnamese subcontractor or the foreign subcontractor.

In case a foreign contractor signs contracts with suppliers in Vietnam to purchase supplies, materials, machinery and equipment to perform the contractor contract, and goods and services for internal consumption , using items not belonging to the items or jobs performed by the foreign contractor under the contractor contract, the value of these goods and services shall not be deducted when determining the foreign contractor's CIT taxable revenue.

Example 19:

Foreign contractor A signs a contract to build Z cement factory with the Vietnamese party with a total contract value of 9 million USD (price does not include VAT). According to the Contractor Contract, Foreign Contractor A will transfer a portion of the construction and installation value (as specified in the Contract signed by the Contractor with the Vietnamese Party) to the Vietnamese Subcontractor B with the value of USD 01 million (the price is USD XNUMX million). VAT not included); In addition, during the construction of Cement Factory Z to perform the contractor contract, foreign contractor A buys supplies and materials (brick, cement, sand...) to perform construction and installation and purchase all kinds of goods. goods and services such as car rental, hotel for experts, purchase of stationery, etc. for contract performance.

The taxable turnover of foreign contractor A in this case is determined as follows:

Revenue subject to CIT = 9 million USD – 1 million USD = 8 million USD

Taxable revenue of foreign contractor A is not deducted from supplies, materials, goods and services such as car rental, hotel rental for experts, purchase of stationery, etc.

b.3) In case the foreign contractor signs a contract with a foreign sub-contractor to pay tax by the direct method, the Vietnamese party shall declare and pay CIT on behalf of the foreign contractor or foreign sub-contractor according to the ratio rate (%) of CIT calculated on taxable turnover corresponding to the business line that the foreign contractor or foreign sub-contractor performs under the contractor contract or sub-contractor contract. The foreign sub-contractor is not required to declare and pay CIT on the value of the work performed by the foreign sub-contractor in accordance with the provisions of the sub-contractor's contract signed with the foreign contractor that the Vietnamese party has declared and paid on behalf of.

b.4) The taxable turnover for the case of leasing machinery, equipment and means of transport is the entire rental. In case the rental revenue of machinery, equipment and means of transport includes expenses directly paid by the lessor such as vehicle insurance, maintenance, registration certificate, vehicle operator, machine machinery and equipment transportation costs from abroad to Vietnam, the revenue subject to CIT does not include these costs if there are actual documents to prove it.

b.5) ​​The taxable revenue of foreign airlines is the revenue from the sale of passenger tickets, air waybill and other revenues (except for those collected on behalf of the State or organizations as prescribed by law). in Vietnam for the carriage of passengers, goods and other objects carried out on flights of the airline itself or a codeshare.

Example 20:

Foreign airline A in the first quarter of 2013 generated a revenue of USD 100.000, of which sales of passenger tickets were USD 85.000, sales of goods bills of lading were USD 10.000 and sales of MCO (documents with price) is 5.000 USD; At the same time, there will be a collection of $1.000 for the State (airport fee) and a refund of $2.000 from the customer's return of the ticket.

The taxable revenue of foreign airline A in the first quarter of 2013 is determined as follows:

Revenue subject to CIT = 100.000 – (1.000 + 2.000) = 97.000 USD

b.6) The taxable revenue of a foreign shipping line is the total freight collected from passenger and cargo transportation and other surcharges that the sea carrier enjoys from the port. loading of Vietnamese goods to the final port of discharge of such goods (including freight for consignments transshipped through intermediate ports) and/or freight collected for the carriage of goods between Vietnamese ports .

The freight charge as a basis for CIT calculation does not include the freight for which CIT has been calculated at the Vietnamese port for foreign ship owners and the freight paid to the Vietnamese transport enterprise for participating in the transportation of goods from the Vietnamese port. South to an intermediate port.

Example 21:

Company A acts as an agent for foreign shipping company X. According to the transport agency contract, Company A, on behalf of Company X, receives goods to be shipped overseas, issues bills of lading, collects freight, etc.

Enterprise B of Vietnam hires Firm X (via Company A) to transport goods from Vietnam to the US with the transportation amount of USD 100.000.

Company A has chartered a ship of a Vietnamese enterprise or a foreign seagoing vessel to transport goods from Vietnam to Singapore with a freight of 20.000 USD and from Singapore the goods will be transported to the US by ship of Company X.

The taxable revenue of foreign shipping company X is determined as follows:

Revenue subject to CIT = 100.000 – 20.000 = 80.000 USD

b.7) For international forwarding and logistics services from Vietnam to abroad, (regardless of whether the sender or the receiver pays for the service), the revenue for CIT calculation is the entire revenue of the foreign contractor. Outside receipt does not include international freight payable to the carrier (air, sea).

b.8) For international delivery services from Vietnam to foreign countries (regardless of whether the sender or the receiver pays for the service), the taxable revenue is the entire revenue received by the foreign contractor.

Example 22:

Company A abroad provides the service of delivering parcels from abroad to Vietnam and vice versa. Company A's taxable revenue is determined as follows:

+ For delivery services from abroad to Vietnam (regardless of whether the sender is overseas or the recipient in Vietnam pays for the service) not subject to CIT taxable income;

+ For delivery services from Vietnam to foreign countries (regardless of whether the sender in Vietnam or the recipient abroad pays for the service), the revenue subject to CIT is the entire revenue received by Company A.

Example 23:

Company B (Vietnamese company) provides postal delivery services from abroad to Vietnam and vice versa. To perform this service, Company B pays (shares the freight) to Company C abroad an amount of x USD. The corporate income tax of Company C is determined as follows:

+ For delivery services from abroad to Vietnam (regardless of whether the sender is abroad or the recipient in Vietnam pays for the service), the amount x USD received by Company C is not subject to CIT taxable income. ;

+ For delivery services from Vietnam to abroad (regardless of whether the sender in Vietnam or the recipient abroad pays for the service), the amount of USD x received by Company C belongs to CIT taxable income; Company B is responsible for declaring, withholding, and paying CIT on behalf of the amount x paid to Company C.

b.9) For reinsurance, CIT taxable revenue is determined as follows:

– For overseas reinsurance ceding, CIT taxable revenue is the amount of reinsurance ceding fee abroad received by the foreign contractor (including reinsurance commission and reimbursement expenses for reinsurance). customers by agreement).

– For activities of receiving reinsurance from abroad, the taxable revenue is the reinsurance ceding commission received by the foreign contractor.

b.10) For securities transfer, revenue for CIT calculation is determined as follows:

For the transfer of securities and certificates of deposit, the revenue subject to corporate income tax is the total revenue from the sale of securities and certificates of deposit at the time of transfer.

b.11) Revenue subject to CIT for interest rate swaps is the difference between interest receivable and interest payable received by the foreign contractor in a calendar year. The determination of the tax period according to the calendar year shall comply with the provisions of the Law on CIT, the Law on Tax Administration and guiding documents.

Example 24:

Bank A (A) has a loan of $10 million with a fixed interest rate of 5,2% monthly. The contract performance period is 3 years from February 1, 2 to February 2012, 1, payment term is once every 2 months and payment is made at the beginning of the period.

On the basis of A's loan contract, A negotiates with a foreign bank B (B) to perform an interest rate swap contract, specifically:

– The contract performance period is 3 years from February 1, 2 to February 2012, 1, payment term is once every 2 months and payment is made at the beginning of the period.

– The floating rate A has to pay to B is libor + 0,25% and B has to pay A fixed interest of 5,2%. This means that if the libor + 0,25% rate is higher than the fixed rate under the swap, then B gets the interest rate differential from A equal to: (libor + 0,25%) – interest payable at an interest rate of 5,2%. Conversely, if the libor rate + 0,25% is lower than the fixed rate under the swap, then A receives the interest rate differential from B by: 5,2% – the interest A receives calculated at the libor rate + 0,25%.

The determination of taxable revenue for B is as follows:

– In 2012 (from January 01, 01 to December 2012, 31): The total amount B received from A is: (12 – 2012) = 15.000 USD;

– In 2013 (from January 01, 01 to December 2013, 31): The total amount B received from A is: (12 – 2013) = 5.000 USD;

– Year 2014 (from January 01, 01 to December 2014, 31: B did not receive money but had to pay A $ 12 (Taxable revenue = 2014);

– Year 2015: Because the contract agreed to pay at the beginning of the period, there was no clearing between A and B.

b.12) For treasury bills:

The determination of CIT taxable revenue for treasury bills is applied to each type of treasury bill held by investors at the time of maturity.

Revenue for calculating CIT from treasury bills is determined as follows:

The calculation of the weighted average purchase price of the number of Treasury bills that investors hold at maturity is done in 3 steps:

Step 1: Determine the number of bills to hold at maturity.

Step 2: Determine the quantity, time to buy and the corresponding purchase price of the bills held at maturity (determined in step 1) according to the principle that bills bought first are sold first (FIFO principle). ).

Step 3: Calculate the weighted average purchase price according to the formula:

=∑( number of bills held at maturity at the time of purchase x corresponding purchase price at the time of purchase) ÷ Number of bills held at maturity.

Example 25: On January 1, 1, Treasury Bill X with a par value of 2015 VND, with a term of 100.000 months, was issued at the price of 06 VND / bill. Immediately after issuance, T-bills were listed and traded on HNX. Investor A made the following transactions from January 89.000 to July 2, 1 (maturity date):

Step 1: Determine the number of bills held at maturity: (100 + 100 + 40) – (70 + 20) = 150 bills

Step 2: Determine the quantity, purchase time and corresponding purchase price of the bills held at maturity after deducting the number of bills at the sale of bills on the principle that which bill is bought first sold first (FIFO principle): 150 bills held at maturity include:

+ 10 bills at the price of 90.000 bought on January 2, 1.

+ 100 bills at the price of 92.000 bought on January 1, 2.

+ 40 bills at the price of 94.000 bought on January 1, 4.

Step 3: Calculate the weighted average purchase price according to the formula:

Weighted average purchase price of bills: [(40 x 94.000 + 100 x 92.000 + 10 x 90.000)/ 150] = 92.400 (VND)

Revenue subject to CIT for the number of bills received by investors at maturity: (100.000 – 92.400) x 150 = 1.140.000 (VND).

2. Ratio (%) of CIT calculated on taxable revenue

a) Rate (%) of CIT calculated on taxable turnover for business lines:

b) Rate (%) of CIT calculated on taxable turnover for some specific cases:

b.1) For contractor contracts, sub-contractor contracts covering many different business activities, the application of the CIT ratio calculated on taxable turnover when determining the payable CIT amount is based on included in the income subject to CIT for each business activity performed by the foreign contractor or foreign sub-contractor according to the provisions of the contract. In case it is not possible to separate the value of each business activity, the CIT rate for the business line with the highest CIT rate shall be applied to the entire contract value.

Particularly for construction and installation activities including raw materials or machinery and equipment accompanying the construction work: In case the contractor contract separates the value of each business activity, each part of the work value will be the same. Contract work is subject to the percentage of CIT on turnover corresponding to that business activity. In case the contractor contract does not separate the value of each business activity, the percentage of CIT calculated on taxable turnover is 2% of the entire contract value. In case the foreign contractor signs a contract with the sub-contractors to hand over the entire value of the work or the items included in the bid for raw materials or machinery and equipment, the foreign contractor will only perform the part of the cost. the remaining service value according to the contractor contract, the percentage of CIT calculated on the revenue for calculating CIT shall be applied to the service industry (5%).

Example 26:

Foreign contractor A signs a contract with Vietnamese Party to build a power plant X with a value of 75 million USD (price excludes VAT, but includes CIT).

Case 1: Contractor contract to separate each business activity as follows:

+ Value of machinery and equipment provided for the project: USD 50 million.

In which:

Value of machinery and equipment: 45 million USD

Value of warranty service accompanying machinery and equipment: 5 million USD

+ Value of technology line design services, other designs: 5 million USD.

+ Value of workshops, other ancillary systems, construction and installation activities: 15 million USD.

+ Value of supervision services, installation instructions: 3 million USD.

+ Value of technical training and commissioning services: 2 million USD.

% CIT rate is applied as follows: for machinery and equipment value of USD 45 million: 1%; for the value of construction and installation activities of USD 15 million: 2%; for the value of the remaining services (warranty service, design, supervision service, installation guide, technical training service, trial operation) 15 million USD: 5%.

Case 2: The contractor contract does not separate each business activity, the percentage of CIT for the entire contract value of 75 million applied is 2%.

Case 3: Foreign contractor A signs a contract with subcontractors to re-deliver the parts of the work covered with raw materials, foreign contractor A only performs the service value (eg the value of the contract). supervision services, installation instructions), the value of this service applies the percentage of 5% CIT.

b.2) For a contract to supply machinery and equipment with services performed in Vietnam, if the value of machinery and equipment can be separated from the value of services, tax shall be calculated at a separate tax rate. of each part of the contract value. If the contract cannot separate the value of machinery and equipment from the value of services, the rate of corporate income tax on taxable turnover is 2%.

Example 27:

Foreign contractor A signs a contract with a Vietnamese party to supply a line of machinery and equipment with a value of $1 million. Contract value includes:

+ Value of machinery and equipment provided for the project: 60 million USD

+ Value of technological line design, other design: 5 million USD

+ Value of supervision services, installation instructions: 3 million USD

+ Value of technical training and commissioning services: 2 million USD.

In case the value of machinery and equipment and the value of this service can be separated, the CIT rate shall be applied as follows: for the value of machinery and equipment, the rate applicable to the commercial sector shall be applied; for the value of services of design, installation supervision, training, and trial operation, the rate applicable to the service industry shall be applied.

In case it cannot be separated, the CIT rate of 2% of the entire contract value (US$70 million) will be applied.

3. CIT for compensation received from the counterparty in breach of the contract, in case the compensation is larger than the damage value, and has taxable income:

For income from compensation for damage collected, foreign contractors may choose to declare and pay CIT at the rate of CIT calculated on taxable revenue or on the basis of declaring revenue and expenses at the same tax rate. is the general tax rate.

Section 4. PAYING VAT BY DECLARATION METHODOLOGY, PAYING CIT PROCEED BY THE RATE OF REVENUE

(hereinafter referred to as mixed method)

Article 14. Subjects and conditions of application

If a foreign contractor or foreign sub-contractor fully meets the two conditions mentioned in Clauses 1 and 2, Article 8, Section 2, Chapter II, and organizes accounting according to the provisions of law on accounting and the guidance of The Ministry of Finance shall register with the tax authority to pay VAT by the deduction method and pay CIT according to the percentage calculated on the taxable turnover.

Article 15. Value added tax

Follow the instructions in Article 9 Section 2 Chapter II.

Article 16. Corporate income tax

Follow the instructions in Article 13 Section 3 Chapter II.

Chapter III

ORGANIZATION OF IMPLEMENTATION

Article 17. Enforcement

1. This Circular takes effect from October 01, 10, replacing Circular No. 2014/60/TT-BTC dated April 2012, 12 of the Ministry of Finance guiding the implementation of tax obligations applicable to taxpayers. foreign organizations and individuals doing business in Vietnam or earning income in Vietnam.

2. In case the contracts and subcontracts are signed before the effective date of this Circular, the determination of VAT and CIT obligations will continue to be done as guided in the respective legal documents at Point a of this Clause. time of signing the contract.

3. In case in an international treaty to which the Socialist Republic of Vietnam has signed or acceded, there are provisions on tax payment of foreign contractors or foreign sub-contractors different from those guided in this Circular. shall comply with the provisions of that international treaty.

In the course of implementation, if any problems arise, organizations and individuals are requested to promptly report them to the Ministry of Finance for study and settlement.