CIRCULAR

GUIDING THE BOOK-KEEPING OF VALUE ADDED TAX (V.A.T) AND ENTERPRISE INCOME TAX

Pursuant to the Law on Valued Added Tax No. 02/1997/QH9 of May 10, 1997;
Pursuant to the Law on Enterprise Income Tax No. 03/1997/QH9 of May 10, 1997;
Pursuant to the Government's Decree No. 28/1998 of May 11, 1998 detailing the implementation of the VAT Law;
Pursuant to the Government's Decree No. 30/1998/ND-CP of May 13, 1998 detailing the implementation of the Law on Enterprise Income Tax;
Pursuant to the Ministry of Finance's Circular No. 89/1998/TT/BTC of June 27, 1998 and Circular No. 99/1998/TT/BTC of July 14, 1998 guiding the implementation of Decree No. 28/1998/ ND-CP and Decree No. 30/1998/ND-CP;
The Ministry of Finance hereby guides the book-keeping of Value Added Tax and Enterprise Income Tax as follows:

A.- GUIDING THE V.A.T. BOOK-KEEPING

I. GENERAL PRINCIPLES

1. Business establishments must organize the VAT book-keeping in accordance with the provisions of the current book-keeping system and the stipulations herein.

2. Business establishments subject to VAT Law shall have their sales turnovers, incomes from financial operations, extraordinary incomes and values of purchased materials, goods, fixed assets and services subject to book-keeping according the following stipulations:

a/ Sale turnovers and incomes from financial operations and extraordinary incomes:

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+ Turnovers from goods sales and service provision are the entire sales amount and service provision amount (without VAT), including surtax and surcharge outside selling prices (if any), enjoyed by business establishments.

+ Incomes from financial operations and extraor-dinary incomes are the total incomes (without VAT).

- For business establishment subject to VAT payment by the direct method on the added value and for goods and services not subject to VAT:

+ Turnovers from goods sales and service provision are the entire sales amount and service provision amount, including surtax and surcharge outside selling prices (if any,) enjoyed by business establishments (Total payment prices - including tax).

+ Incomes from financial operations and extraordi-nary incomes are the total incomes (total payment prices).

b/ Values of purchased materials, goods, fixed assets and services:

- For business establishments subject to VAT payment by the method of tax deduction, the values of purchased materials, goods, fixed assets and services are the actual purchasing prices without the input VAT.

- For business establishments subject to VAT payment by direct method on added value and business establishments not subject to VAT, the values of purchased materials, goods, fixed assets and services are the total payment prices (including the input VAT).

3. Business establishments subject to VAT payment shall have to accurately and honestly account the following indices:

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- Input VAT deductible, already deducted, to be additionally deducted;

- VAT payable, already paid and to be additionally paid;

- VAT to be reimbursed; and

- VAT to be reduced.

II. INVOICES AND VOUCHERS

Business establishments shall have to observe the invoice and voucher regime in accordance with the current stipulations of the Ministry of Finance. Below is a number of invoices and vouchers related to the VAT book-keeping:

1. Added value invoices

Business establishments subject to VAT payment by tax deduction method, when selling goods and/or services, must use the "added value invoices" issued by the Ministry of Finance (except when using vouchers on which the written payment prices are the prices with VAT). When billing invoices to sell goods and/or services, business establishments must fully and accurately state all prescribed elements and clearly indicate:

- Selling prices (without VAT);

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- VAT; and

- Total payment prices (with VAT).

2. Goods sale invoices

Business establishments subject to VAT payment by the direct method, when selling goods and/or services, shall use "Goods sale invoices" issued by the Ministry of Finance. When billing invoices for selling goods and services, business establishments must fully and accurately state the prescribed elements and clearly indicate:

- Selling prices;

- Surtax and surcharge calculated outside the selling prices (if any); and

- Total payment prices (with VAT).

3. Self-printed invoices and particular vouchers

- Business establishments using invoices and vouchers other than the commonly set forms (including invoices issued by themselves) shall have to register them with the Ministry of Finance (General Department of Tax) and shall be used only after it is approved in writing. Invoices printed by business establishments themselves must contain full information in accordance with the stipulations on invoices and vouchers (added value invoices, goods sale invoices).

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4. List of retail sales of goods and services

Where business establishments directly retail their goods and provide services to goods consumers and/or services users, which are not subject to the sale invoices, they shall, when selling goods, make a "list of retail sale of goods and services" according to Form No. 05/GTGT issued together with the Ministry of Finance's Circular No. 89/1998/TT-BTC of June 27, 1998 "Guiding the Implementation of Government's Decree No. 28/1998/ND-CP of May 11, 1998 detailing the Implementation of the Law on Valued Added Tax".

5. List of agricultural, forest and aquatic products purchased from direct producers

For production and processing establishments which buy goods being unprocessed agricultural, forest and aquatic products from direct producers without sale invoices as prescribed, the purchasers shall have to make a "list of agricultural, forest and aquatic products purchased from direct producers" according to Form No. 04/GTGT issued together with Ministry of Finance's Circular No. 89/1998/TT-BTC of June 27, 1998.

III. BOOK-KEEPING ACCOUNT

In order to make VAT book-keeping, Account 133 "VAT deductible" shall be supplemented to the promulgated book-keeping account system in accordance with the current book-keeping regulations, and Account 3331 shall be renamed as follows:

1. Supplementing Account 133 - VAT deductible

Account 133 is used to reflect the input VAT amount deductible, already deducted and to be additionally deducted.

a/ Accounting of Account 133 according to the following regulations:

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- For goods and services purchased for the production of and trading in, goods and services which are liable and not liable to VAT, business establish-ments shall have to account separately the input VAT deductible and the input VAT not deductible.

Where separate accounting is impossible, the input VAT amount shall be accounted into Account 133. At the end of the period, the book-keeping shall be done to determine the VAT amount to be deducted by the percentage of the turnover liable to VAT against the total sale turnover. The non-deductible input VAT amount shall be calculated in the cost prices of the goods sold out in the period.

Where the non-deductible VAT amount is great in value, it shall be calculated in the cost prices of the goods sold out in the period corresponding to the turnover in the period and the remainder shall be calculated in the cost prices of the goods sold out in the next accounting period.

- Where business enterprises purchase goods and services for use in the production of and/or trading in, goods and services not liable to VAT or used for the production of and/or trading in, goods and services liable to VAT by direct method, for use in non-business and/or project activities, or cultural and welfare activities which are covered by other funding sources; the amount of input VAT shall not be deducted and not accounted in Account 133. The non-deductible VAT amount shall be calculated in the values of purchased materials, goods, fixed assets and services.

- Where purchased goods and services are entitled to the use of particular invoices and/or vouchers (such as postage stamps, freight tickets, etc...) with the written payment prices being those with VAT, business establishments shall base themselves on the prices of purchased goods and services with tax to determine prices without tax and the input VAT to be deducted by the calculation method stipulated in Point 10, Item I, Part B of the Ministry of Finance's Circular No. 89/1998/TT/BTC of June 27, 1998.

- Where production and/or processing establish-ments buy raw materials which are unprocessed agricultural, forestrial and aquaculture products from direct producers without sale invoices, they shall base themselves on the List of the purchased agricultural, forestrial and aquaculture products to calculate the amount of input VAT to be deducted by percentage on the value of purchased goods according to the regulations in the VAT regime.

- The input VAT arises in what month shall be declared for deduction when determining the VAT amount to be paid for that month. If the deductible input VAT amount is bigger than the output VAT amount, the amount of input VAT to be deducted shall only be equal to the output VAT amount in such month; the remaining amount of input VAT shall be deducted in the next taxation period or shall be considered for tax reimbursement according to the prescribed regimes.

b/ Structure and descriptions of Account 133

Debit: The amount of deductible input VAT.

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- The amount of input VAT already deducted;

- Transfer of the amount of non-deductible input VAT;

- The amount of input VAT already reimbursed.

Debit balance: The remaining amount of deductible input VAT, the amount of input VAT to be reimbursed, but reimbursement has not been made.

Account 133 has two level-2 accounts:

+ Account 1331- The deductible VAT on goods and services

Account 1331 is used to reflect the deductible input VAT on materials, goods and services being bought on the free market for use in the production of and/or trading in, goods and services liable to VAT by tax deduction method.

+ Account 1332 - The deductible VAT on fixed assets

Account 1332 is used to reflect the deductible input VAT in the course of investment and procurement of fixed assets used for the production of and/or trading in, goods and services liable to VAT by tax deduction method.

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- When buying materials, goods and fixed assets for use in the production of and/or trading in, goods and services liable to VAT by the tax deduction method, the accounts shall reflect the values of materials and goods placed in warehouses by their real prices including purchasing prices without input VAT and expenses for purchasing, transport, loading and unloading and warehouse and site hiring, etc. from place of purchase to enterprises, and the entry shall be made as follows:

Debit: Account 152 - Raw materials, and materials

Debit: Account 153 - Tools and instruments

Debit: Account 156 - Goods

Debit: Account 211 - Tangible fixed assets

Debit: Account 611 - Purchase of goods

Debit: Account 133 - Deductible VAT (Input VAT)

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Credit: Accounts 111, 112, 331,... (Total payment prices)

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Debit: Accounts 621, 627, 641, 642, 241,...

Debit: Accounts 133 - The deductible VAT (Input VAT)

Credit: Accounts 111, 112, 331,... (Total payment prices).

- When purchasing goods for immediate delivery and selling (subject to VAT by the tax deduction method) to clients (without placing into warehouses), entry shall be made as follows:

Debit: Account 632 - Cost prices of goods sold (Purchasing prices without input VAT)

Debit: Account 133 - Deductible VAT

Credit: Accounts 111, 112, 331,... (Total payment prices).

- When importing goods, the book-keeping shall reflect the values of imported materials, goods and equipment comprising the total sum to be paid to sellers, import tax to be paid and purchasing and transport expenses, and the entry shall be made as follows:

Debit: Account 152 - Raw materials, materials

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Debit: Account 211 - Tangible fixed assets

Credit: Account 3333 - Export and import tax

Credit: Accounts 111, 112, 331,...

- For VAT on imported goods:

+ Where imported goods are used in the production of and/or trading in, goods and services liable to VAT by tax deduction method, the VAT on the imported goods shall be deducted, and the entry shall be made as follows:

Debit: Account 133 - Deductible VAT

Credit: Account 3331- Payable VAT (Account 33312 - VAT on imported goods).

+ Where imported goods are used in the production of and/or trading in, goods and services not liable to VAT or liable to VAT payment by direct method or used for non-business, project or program activities or cultural and welfare activities, etc. covered by other funding sources; VAT to be paid for the imported goods shall be calculated in the value of the purchased goods, and entry shall be made as follows:

Debit: Account 152 - Raw materials and materials

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Debit: Account 211 - Tangible fixed assets

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Credit: Account 3331- Payable VAT (Account 33312).

- When buying materials, goods and fixed assets, for use in the production of and/or trading in, goods and services not liable to VAT or for use in non-business and project activities or cultural and welfare activities, etc. that are covered by other funding sources, the book-keeping shall reflect the value of materials, goods and services comprising the total sum to be paid to sellers (including the input VAT) and purchasing and transport expenses:

Debit: Account 152 - Raw materials and materials (Prices with VAT)

Debit: Account 153- Tools and instruments (Prices with VAT)

Debit: Account 211 - Tangible fixed assets (Prices with VAT)

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Credit: Accounts 111, 112, 331,...

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Debit: Account 3331 - Deductible VAT

Credit: Account 133 - Deductible VAT

- When paying VAT to the State budget:

Debit: Account 3331 - Payable VAT

Credit: Accounts 111, 112,...

Where the deductible input VAT amount is bigger than the output VAT amount arising in the period, the input VAT amount to be deducted shall only be equal to the output VAT amount. The remaining amount of the input VAT shall be deducted in the next taxation period or shall be considered for tax reimbursement.

- For establishments trading in goods and/or services subject to VAT payment by tax deduction method and regularly having the amount of input VAT bigger than the amount of output VAT, they shall be permitted by the competent agency to have VAT reimbursed according to the stipulations of the tax regime. Upon receipt of the State Budget sum for the reimbursed input VAT amount, the entry shall be made as follows:

Debit: Accounts 111, 112

Credit: Account 133 - Deductible VAT.

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Debit: Accounts 152, 153, 156, 211, etc... (Purchasing prices without VAT)

Debit: Account 133 - Deductible VAT (input VAT)

Credit: Accounts 111, 112, 331,...

At the end of the period, the book-keeping shall be made to calculate and determine the input VAT deductible and not deductible on the basis of the distribution by the proportion of turnovers. The amount of the input tax shall be calculated for deduction by the percentage of the turnovers liable to VAT against the total turnover in the period, and the entry shall be made as follows:

+ The amount of input VAT to be deducted in the period:

Debit: Account 3331 - Payable VAT

Credit: Account 133 - Deductible VAT.

+ The non-deductible input VAT amount in the period:

The amount of non-deductible input VAT shall be calculated into the cost prices of the goods sold in the period, and the entry shall be made as follows:

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Credit: Account 133 - Deductible VAT.

The non-deductible input VAT amount in the period shall be calculated in the cost prices of the goods sold in the next period, and the entry shall be made as follows:

Debit: Account 142 - Prepaid expenses

Credit: Account 133 - Deductible VAT.

When calculating the non-deductible input VAT amount into the cost prices of the goods sold in the next period, the entry shall be made as follows:

Debit: Account 632 - Cost prices of the goods sold

Credit: Account 142 - Prepaid expenses

2. Renaming Account 3331 "Turnover Tax" as Account 3331 "Payable VAT"

Account 3331 shall be used to reflect the output VAT amount, the VAT amounts to be paid, already paid and to be additionally paid to the State Budget.

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a/ Structure and descriptions of Account 3331

Debit:

- The deducted amount of the input VAT.

- The reduced VAT amount deducted from the payable VAT amount.

- The VAT amount already paid to the State Budget.

- The amount of VAT on the sold goods that are returned.

Credit:

- The payable amount of output VAT on goods and services sold;

- The payable amount of output VAT on goods and services used for purpose of exchange, gifts, donations and for internal use;

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- The payable amount of VAT on imported goods.

Balance of Credit: The remaining amount of VAT to be paid at the end of the period.

Balance of Debit: The amount of VAT paid in excess to the State Budget.

Account 3331 has two level-3 accounts:

+ Account 33311 - Output VAT: This account is used to reflect the output VAT amount, the amounts of VAT to be paid, already paid and to be additionally paid on goods, products and services sold.

+ Account 33312 - VAT on imported goods: This account is used to reflect the VAT amounts to be paid, already paid and to be additionally paid on imported tax.

b/ Method of accounting of a number of main economic operations

b1/ For business establishments liable to VAT payment by tax deduction method:

- When selling goods and services subject to VAT by tax deduction method, accountants writing sale invoices shall have to specify the selling prices without VAT, surtax and surcharge outside the selling prices (if any), the payable VAT and the total payment price and reflect the sale turnover which is the total sum from goods sales and service provision (without VAT); the entry shall be made as follows:

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Credit: Account 3331 - Payable VAT (Account 33311 - Output VAT)

Credit: Account 511 - Sale turnover (Prices without VAT), or

Credit: Account 512 - Turnover from internal sales (Prices without VAT).

- When selling goods and services not liable to VAT or liable to VAT by direct method, the book-keeping reflects the sale turnover which is the total payment price (taxable prices); and the entry shall be made as follows:

Debit: Accounts 111, 112, 131,...

Credit: Account 511 - Sale turnover (Total payment price)

Credit: Account 512 - Turnovers from internal sales (Total payment price).

- When there arise any amounts of incomes from financial operations and/or extraordinary incomes liable to VAT by tax deduction method (such as revenue from property leasing, from liquidation, sale or assignment of fixed assets, etc...), the entry shall be made as follows:

Debit: Accounts 111, 112, 138, etc... (Total payment price)

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Credit: Account 711- Incomes from financial operations (Prices without VAT)

Credit: Account 721 - Amounts of extraordinary incomes (Prices without VAT).

- Where properties are leased with rents paid in installments or in advance for a certain leasing period, the accountants determine the turnover from service provision, which is the non-VAT rent prices and VAT amount, and the entry shall be made as follows:

Debit: Accounts 111, 112 (Total sum received in advance).

Credit: Account 3331 - Payable VAT.

Credit: Account 511 - Sale turnover.

- Where sales are made by installment payment (goods liable to VAT by tax deduction method), the book-keeping shall determine the sale turnover which is the non-VAT selling prices paid for one installment and VAT amount, and entry shall be made as follows:

Debit: Accounts 111, 112, 131,...

Credit: Account 3331 - Payable VAT.

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Credit: Account 711 - Incomes from financial operations (Profits from sales by deferred payment).

- Where sales are made by the mode of goods barter:

+ Where sale of goods (liable to VAT by tax deduction method) are made by barter of goods for use in the production of and/or trading in, goods or services liable to VAT by tax deduction method, the entry shall be made as follows:

Turnovers from sales by the mode of goods barter:

Debit: Account 152 - Raw materials and materials

Debit: Account 153 - Tools and instruments

Debit: Account 156 - Goods

Debit: Account 131 - Collection to be made from clients

Credit: Account 511 - Sale turnovers (without VAT).

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Debit: Account 133 - Deductible VAT.

Credit: Account 3331 - Payable VAT.

+ Where sales of goods (liable to VAT by tax deduction method) are made by barter of goods for use in the production of and/or trading in, goods and/or services not liable to VAT or liable to VAT by direct method, the entry shall be made as follows:

Debit: Account 152 - Raw materials and materials (including VAT)

Debit: Account 153 - Tools and instruments (including VAT)

Debit: Account 156 - Goods (including VAT)

Credit: Account 3331 - Payable VAT

Credit: Account 511 - Sale turnovers (Selling prices without VAT)

- Where goods and/or services are used for the purpose of donations and gifts, the book-keeping shall, based on the relevant documents, reflect turnover and VAT to be paid on goods and/or services used for such purpose, and the entry shall be made as follows:

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Sale turnover:

Debit: Accounts 641, 642 (Prices without VAT)

Credit: Account 511 - Sale turnovers (Prices without VAT).

VAT payable (deductible):

Debit: Account 133 - Deductible VAT

Credit: Account 3331 -Payable VAT.

+ For units subject to VAT payment by direct method, which use goods and/or services for the purpose of donations and gifts, the amount of VAT to be paid on goods and/or services used for such purpose shall be calculated into business operation costs or in expenditures from budget sources, and the entry shall be made as follows:

Debit: Accounts 641, 642 (Prices with VAT)

Debit: Accounts 431 - Reward and welfare fund (Prices with VAT)

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Credit: Account 3331 - Payable VAT

Credit: Account 511 - Sale turnovers (Prices without VAT).

- Where workers' and employees' salaries are paid in kind (products or goods), the entry shall be made as follows:

Debit: Account 344 - To be paid to workers and employees (Prices with VAT).

Credit: Account 3331 - Payable VAT

Credit: Account 512 - Turnovers from internal sales

- For products, goods and/or services used internally, the book-keeping shall, based on relevant documents, reflect turnovers and VAT to be paid on goods and services for such use:

+ Where internally-used products, goods and/or services (liable to VAT by tax deduction method) are used in the production of and/or trading in, goods and services liable to VAT by tax deduction method, the amount of VAT to be paid on products, goods and/or services for such use shall be deducted and the entry shall be made as follows:

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Debit: Account 627, 641, 642

Credit: Account 512 - Turnovers from internal sales.

VAT payable (deductible):

Debit: Account 133 - Deductible VAT

Credit: Account 3331 - VAT payable.

+ Where internally-used products, goods and/or services (liable to VAT by tax deduction method) are used in the production of and/or trading in, goods and/or services not liable to VAT or liable to VAT by direct method, the amount of VAT to be paid on products, goods and/or services for such use shall be calculated into business and production costs or in expenditures from budget sources, and the entry shall be made as follows:

Debit: Accounts 641, 642 (costs incurred to produce products plus (+) payable VAT)

Debit: Account 431 - Reward and welfare fund

Debit: Account 161 - Non-business expenditure

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Credit: Account 3331 - Payable VAT

Credit: Account 512 - Turnovers from internal sales (costs incurred to produce products).

- Where materials, equipment and/or goods are imported, the regulation shall reflect the payable import tax, amount the total sum to be paid and the value of such imported materials, equipment and/or goods (not including VAT), and the entry shall be made as follows:

Debit: Account 152 - Raw materials and materials

Debit: Account 156 - Goods

Debit: Account 211 - Tangible fixed assets

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Credit: Account 3333 - Export, import tax

Credit: Accounts 111, 112, 331,...

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+ Where goods are imported for use in the production of and/or trading in, goods and/or services liable to VAT by tax deduction method, the amount of value added tax on imported goods shall be deducted, and the entry shall be made as follows:

Debit: Account 133 -Deductible VAT

Credit: Account 3331 - Payable VAT (Account 33312).

+ Where goods are imported for use in the production of and/or trading in, goods and/or services not liable to VAT or liable to VAT by direct method or used in non-business, project, program, cultural and welfare activities, the amount of VAT on imported goods shall not be deducted, and the entry shall be made as follows:

Debit: Account 152 - Raw materials and materials

Debit: Account 156 - Goods

Debit: Account 211 - Tangible fixed assets

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Credit: Account 3331 - Payable VAT (Account 33312 - VAT on imported goods).

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Debit: Account 3331 - Payable VAT (Account 33312)

Credit: Accounts 111, 112.

- At the end of the period, the book-keeping shall be made to calculate and determine the amount of VAT to be deducted and the amount of VAT to be paid for the period.

+ The amount of VAT deducted in the period shall be entered as follows:

Debit: Account 3331 - Payable VAT

Credit: Account 133 - Deductible VAT.

+ When paying VAT to the State Budget in the period, the entry shall be made as follows:

Debit: Account 3331 - Payable VAT

Credit: Accounts 111, 112,...

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Debit: Accounts 111, 112

Credit: Account 133 - Deductible VAT.

- Where units are entitled to VAT reduction:

+ If the reduced VAT amount is deducted from the payable VAT amount, the entry shall be made as follows:

Debit: Account 3331 - Payable VAT

Credit: Account 721 - Amounts of extraordinary incomes.

+ If the reduced VAT amount is reimbursed in cash by the State Budget, upon receipt of the sum, entry shall be made as follows:

Debit: Accounts 111, 112

Credit: Account 721 - Amounts of extraordinary incomes.

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+ Reflection of turnovers of the sold goods that are returned:

Debit: Account 531 - Sold goods that are returned (Selling prices without VAT)

Credit: Accounts 111, 112, 131,...

+ Reflection of the sum of VAT on the sold and returned goods, which is reimbursed to purchasers, the entry shall be made as follows:

Debit: Account 3331 - Payable VAT

Credit: Accounts 111, 112.

+ Reflection of the cost prices of the sold and returned goods that are returned and put in warehouses, the entry shall be made as follows:

Debit: Account 155 - Finished products

Debit: Account 156 - Goods

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b2/ For business establishments liable to VAT payment by direct method on added value and business establishments not liable to VAT payment

- When purchasing goods and/or services for use in production and/or business activities, the book-keeping shall reflect the value of purchased goods and/or services, which is the total payment price (including input VAT). If units apply double-entry accounting, when purchasing goods and services to put in warehouses or to use immediately in production and business, the entry shall be made as follows:

Debit: Accounts 152, 156, 211, 627, 641, 642,... (including input VAT inclusive)

Credit: Accounts 111, 112, 331, etc... (Total sum to be paid to sellers).

- When selling goods and services, the book-keeping shall reflect the turnover from sale of goods and/or services, which is the total payment price (including value added tax), and the entry shall be made as follows:

Debit: Accounts 111, 112, 131 (Total sum to be collected from purchasers)

Credit: Account 511 - Sale turnovers

Credit: Account 512 - Turnovers from internal sales.

- When there arise amounts of incomes from financial operations and extraordinary incomes (such as revenue from property leasing, from liquidation, sale and/or assignment of fixed assets, etc...) arise, entry shall be made as follows:

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Credit: Account 711 - Incomes from financial operations

Credit: Account 721 - Amounts of extraordinary incomes.

- At the end of the period, the book-keeping shall be done to calculate and determine VAT to be paid by direct method, and the entry shall be made as follows:

+ For production and business activities:

Debit: Account 642 - Expenses for enterprise management (6425)

Credit: Account 3331 - Payable VAT.

+ For other activities (financial and extraordinary activities), the entry shall be made as follows:

Debit: Account 811 - Expenses for financial activities

Debit: Account 821 - Extraordinary expenses

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- When making payment of VAT to the State Budget, the entry shall be made as follows:

Debit: Account 3331 - Payable VAT

Credit: Account 111, 112,...

- When purchasing imported materials and goods, the entry shall be made as follows:

Debit: Account 152, 153, 156, 211, etc

Credit: Account 3331 - Payable VAT (Account 33312)

Credit: Account 3333 - Export, import tax

Credit: Accounts 111, 112, 331,...

When making payment of import tax and VAT on imported goods, the entry shall be made as follows:

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Debit: Account 3331 - Payable VAT (Account 33312)

Credit: Account 111, 112,...

- When value added tax is reduced, the following entry shall be made in book-keeping:

+ Where the amount of the reduced VAT is deducted from the payable VAT amount in the period, the entry shall be made as follows:

Debit: Account 3331 - Payable VAT

Credit: Account 721 - Amounts of extraordinary incomes.

+ Where the reduced VAT amount is reimbursed in cash by the State Budget, the entry shall be made as follows:

Debit: Accounts 111, 112

Credit: Account 721 - Amounts of extraordinary incomes.

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+ When selling goods and/or services, to reflect the sale turnover which is the total payment price (including special consumption tax and export tax), and the entry shall be made as follows:

Debit: Accounts 111, 112, 131

Credit: Account 511 - Sale turnover

Credit: Account 512 - Turnover from internal sales.

+ To reflect the amount of special consumption tax or export tax to be paid, the entry shall be made as follows:

Debit: Account 511, 512

Credit: Account 3332 - Special consumption tax

Credit: Account 3333 - Export, import tax.

- When making the special consumption tax or export, import tax payment to the State Budget, the following entry shall be made:

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Debit: Account 3333 - Export, import tax

Credit: Account 111, 112

IV. FINANCIAL REPORT

The financial report system applicable to enterprises under the various branches and economic sectors shall be implemented in accordance with the financial report regulations issued together with the Minister of Finance' s Decision No. 1141/TC-QD/CDKT of November 1st, 1995 and Circular No. 10 TC/CDKT of March 20, 1997, and the amended and supplemented provisions herein as follows:

1. Accounting Balance Sheet (Form No. B 01 - DN)

The Accounting Balance Sheet (Form No. B 01 - DN) is supplemented with index in code No. 133 (Deductible VAT).

Index "Deductible VAT" (Code No. 133) shall be used to reflect the amount of VAT which remains to be deducted and the reimbursed VAT amount which is approved by the competent agency but by the end of the accounting period the reimbursement has not been made by the State Budget.

The data to be fed in this index shall be based on the balance in the debit of Account 133 "Deductible VAT" on the Ledger at the end of the accounting period.

2. Report on Business Operation Results (Form No. B 02 - DN)

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- Part I - Profits and losses: This part shall reflect the situation on results of enterprises' business operations, including business and other activities.

- Part II - Situation on performance of obligations toward the State. This part shall reflect situation on the enterprises' performance of their obligations toward the State in term of tax and other charges to be paid.

- Part III - VAT to be deducted, to be reimbursed, reduced and exempted: This part shall reflect the amount of VAT deductible, already deducted and to be additionally deducted at the end of the period; the amount of VAT to be reimbursed, has been reimbursed and shall be reimbursed and the amount of VAT to be exempted and reduced, has been exempted and reduced and shall be exempted and reduced at the end of the period.

a/ Descriptions and methods for drawing up Part I - Profits and losses

- The descriptions and methods for drawing up indices written down in column 5 "Accumulation from the beginning of the year" shall be based on the data written down in column 5 of this report for the previous period plus (+) the data written down in column 4 "Current period" of the same report for the current period, the results found shall be noted down in column 5 of each corresponding index.

- The descriptions and methods for drawing up indices to be written down in column 4 "Current period" shall be as follows:

(Below is the guidance only for descriptions and methods for drawing up variable indices while invariable indices shall be elaborated in accordance with the stipulations in the Enterprise Accounting System issued together with the Minister of Finance's Decision No. 1141-TC/QD/CDKT of November 1st, 1995 and Circular No. 10-TC/CDKT of March 20, 1997.)

+ Index "Special consumption tax and Export tax" (Code No. 07)

This index shall reflect the amount of special consumption tax and export tax to be paid in the reporting period.

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+ Index "Income tax to be paid by enterprises" (Code No. 70)

This index shall reflect the amount of VAT to be paid in the reporting period.

The data to be written down in this index shall be based on the figures arising in the Credit of Account 3334 "Enterprise income tax" in the reporting period.

b/ Descriptions and methods for drawing up Part II "Situation on performance of obligations toward the State"

- The descriptions and methods for drawing up indices to be written down in column 6 and column 7 "The amount to be paid, the accumulative amount has been paid from the beginning of the year" shall be based on the data written down in column 6 or column 7 of this report for the previous period plus (+) the data written down in column 4 or column 5 of the report for the current period and the results found shall be noted down in column 6 or column 7 of each corresponding index.

- The descriptions and methods for drawing up indices written down in column 4 and column 5 shall be as follows:

(Below is the guidance only for descriptions and methods for drawing up variable indices while invariable indices shall be elaborated in accordance with the stipulations in the Enterprise Accounting System issued together with the Minister of Finance's Decision No. 1141-TC/QD/CDKT of November 1st, 1995 and Circular No. 10-TC/CDKT of March 20, 1997).

+ Index "Payable VAT" (Code No. 11)

This index is used to reflect the amount of VAT to be paid, has been paid and shall be paid to the end of the reporting period, which includes VAT on business activities for product consumption, goods and services, VAT of financial operations and extraordinary incomes and VAT on imported goods.

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+ Index "Value added tax of imported goods" (Code No. 12)

This index shall be used to reflect the amount of VAT on imported goods to be paid, has been paid and shall be paid to the end of the reporting period.

The data to be noted down in this index shall be based on the figures that arise in the Debit and Credit of Account 33312 "VAT on imported goods" in the reporting period.

+ Index "Enterprise income tax" (Code No. 15)

This index shall reflect income tax that enterprises must pay, have paid and shall pay to the end of the reporting period.

The data to be noted down in this index shall be based on the figures that arise in the Debit of Account 3334 (Enterprise income tax) to write down in column 5 and on the figures that arise in the Credit of Account 3334 (Enterprise income tax) to write down in column 4.

c/ Descriptions and methods for drawing up Part III "VAT deductible, to be reimbursed, to be reduced or exempted"

Descriptions of indices in this part shall be used to reflect the amount of deductible, has been deducted and shall be deducted, the Amount of VAT entitled to be reimbursed, has been reimbursed and shall be reimbursed, and the Amount of VAT to be exempted and reduced, has been exempted and reduced and shall be exempted and reduced.

The descriptions and methods for drawing up indices to be written down in column 4 "Accumulation from the beginning of the year" shall be based on the data written down in column 4 "Accumulation from the beginning of the year" of this report for the previous period plus (+) the data written down in column 3 "Current period" of the report for the current period and the results found out shall be noted down in column 4 of each suitable index.

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Section I - VAT entitled to deduction

1. VAT amount entitled to be deducted or reim-bursed at the beginning of the period (Code No. 10)

This index shall reflect the amount of input VAT still entitled to be deducted or reimbursed, which is carried forward from the previous period.

The data to be noted down in this index shall be based on the column of the Debit balance at the beginning of the period of Account 133 "Deductible VAT" or on the data written down in index 4, Item I (Code No. 16) of this report for the previous period.

2. Amount of deductible VAT that arises (Code No. 11)

This index shall be used to reflect the amount of deductible input VAT when goods, services and fixed assets are purchased, that arises in the period (including the input VAT amount which is neither deductible nor accounted separately).

The data to be fed in this index shall be based on the figures arising in the Debit of Account 133 "Deductible VAT" in the reporting period.

3. The VAT amount that has been deducted or reimbursed in the period (Code No. 12)

This index shall reflect the input VAT amount (including the tax amount carried forward from the previous period and the input tax amount arising in the current period) which has been deducted from the output VAT amount in the period or has been reimbursed in cash, and the non-deductible VAT amount.

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Code No. 12 = Code No. 13 + Code No. 14 + Code No. 15.

3a/ The VAT amount already deducted (Code No. 13)

This index shall reflect the input VAT amount that has already been deducted in the reporting period.

The data to be fed in this index shall be based on the figures arising in the Credit of Account 133 "Deductible VAT" corresponding to the Debit of Account 3331 "Payable VAT" in the reporting period (33311).

3b/ The VAT amount already reimbursed (Code No. 14)

This index shall reflect the input VAT amount that has already been reimbursed in cash in the reporting period.

The data to be fed in this index shall be based on the detailed account book of VAT entitled to be reimbursed or on the detailed account book of Account 133, details of the reimbursed VAT and the part that arises in the Credit of Account 133 corresponding to the Debit of Accounts 111 and 112.

3c/ Amount of VAT not entitled to deduction (Code No. 15)

This index shall reflect the amount when technical materials, goods and/or services are purchased for use in production and/or business activities which are liable and not liable to VAT but not entitled to deduction that must be calculated and distributed to production and business activities not liable to VAT in the reporting period.

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4. The VAT amount still entitled to be deducted or reimbursed at the end of the period (Code No. 16)

This index shall reflect input VAT still entitled to deduction or the amount of VAT notified to be reimbursed but by the end of the reporting period, the reimbursement has not been made by the State Budget.

The data to be fed in this index shall be based on the Debit balance of Account 133 "Deductible VAT" to the end of the reporting period.

Code No. 16 = Code No. 10 + Code No. 11 + Code No. 12.

Section II - VAT entitled to reimbursement

1. Amount of VAT entitled to reimbursement at the beginning of the period (Code No. 20)

This index shall reflect the amount of input VAT notified to be reimbursed by the tax agency but by the end of the previous period, the reimbursement has not been made by the State Budget.

The data to be fed in this index shall be based on the detailed book-keeping journal of VAT entitled to reimbursement (Form No. S 02 - DN) or on the data noted down in index coded No. 23 of the same report for the previous period.

2. Amount of VAT entitled to reimbursement (Code No. 21)

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The data to be fed in this index shall be based on the notice of tax reimbursement in the period or on the detailed account book of VAT to be reimbursed (Form No. S 02 - DN).

3. VAT amount that has already been reimbursed (Code No. 22)

This index shall reflect the input VAT amount which has been reimbursed in cash in the period.

The data to be fed in this index shall be based on the detailed account book of Account 133 "Deductible VAT" and details of the part of VAT from which the part that arises in the Credit of Account 133 corresponding to the Debit of Accounts 111 and 112 has been reimbursed or on the detailed account book of VAT entitled to reimbursement (Form No. S 02 - DN).

4. VAT amount still entitled to reimbursement at the end of the period (Code No. 23)

This index shall reflect the amount of input VAT notified for reimbursement but by the end of the reporting period reimbursement has not been made by the State Budget.

The data to be fed in this index shall be based on the detailed account book of VAT to be reimbursed (Form No. S 02 - DN) or shall be calculated as follows:

Code No. 23 = Code No. 20 + Code No. 21 + Code No. 22

Section III. VAT entitled to exemption

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1. VAT amount entitled to exemption or reduction at the beginning of the period (Code No. 30)

This index shall reflect the amount of payable VAT that has been considered for exemption or reduction by the tax agency and a notice to that effect has been given but by the end of the previous period, the exemption or reduction has not been made.

The data to be fed in this index shall be based on the detailed account book of VAT entitled to exemption or reduction (Form No S 03 - DN) (the Part of Balance at the beginning of the period) or on the data noted down in the index coded No 33 of the same report for the previous period.

2. Amount of VAT entitled to exemption or reduction (Code No. 31)

This index shall reflect the payable VAT amount which has been considered for exemption or reduction by the tax agency and a notice to that effect has been given in the reporting period.

The data to be fed in this index shall be based on the detailed account book of VAT entitled to exemption or reduction (Form No. S 03 - DN).

3. VAT amount that has been exempted or reduced (Code No. 32)

This index shall reflect the VAT amount eligible for exemption or reduction, that has been exempted or reduced in the reporting period, including the tax exemption or reduction amount which has been reimbursed in cash by the State Budget (if VAT has been paid to the State Budget) or deducted from the VAT amount to be paid.

The date to be fed in this index shall be based on the detailed book-keeping of VAT entitled to exemption or reduction (Form No. S 03 - DN) or on the figures that arise in the Debit of Account 3331 "Payable VAT" corresponding to the Credit of Account 721 "Amounts of extraordinary incomes" (if the tax exemption or reduction amount is deducted from the VAT amount to be paid in the period) or the figures that arise in the Debit of Accounts 111 and 112 corresponding to the Credit of Account 721 (if the tax exemption or reduction amount is reimbursed in cash by the State Budget) in the part of VAT entitled to exemption or reduction in cash.

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This index shall reflect the VAT amount notified for exemption or reduction by the tax agency but by the end of the reporting period, the exemption or reduction has not been made.

The date to be fed in this index shall be based on the detailed account book of VAT entitled to exemption or reduction (Form No. S 03 - DN).

Code No. 33 = Code No. 30 + Code No. 31 + Code No. 32.

V. ACCOUNT BOOKS

1. Supplementation of account books

The account book system applicable to enterprises shall be implemented in accordance with the Enterprise Accounting Regime issued together with the Minister of Finance's Decision No. 1141-TC/QD/CDKT dated November 1, 1995 and is supplemented with 3 book forms below stipulated herein as follows:

+ VAT monitoring book (Form No. S 01 - DN)

+ Detailed book of VAT to be reimbursed (Form No. S 02 - DN)

+ Detailed book of VAT to be exempted or reduced (Form No. S 03 - DN)

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- For enterprises that apply the book form of Journal-Ledger, 4 more columns shall be opened in the Journal-Ledger to reflect Account 133 and Account 3331.

- For enterprises that apply the book form of General Journal or the book form of Book-keeping voucher to entry on accounts, Account 133 "Deductible VAT" and Account 3331 "Payable VAT" shall be monitored and reflected on Ledgers opened for each account.

2. Justifications of descriptions and methods of entering in detailed account books

a/ VAT monitoring book (Form No. S 01 - DN)

- Objectives and scope of application:

This book shall be applicable only to production and business establishments subject to the calculation of VAT to be paid by direct method and shall be entered in "Single entry" account books.

This book shall be used to reflect the amount of VAT payable, already and to be additional paid.

- Descriptions and methods of entering in the book:

This book shall be opened every month and shall be entered according to each voucher or invoice regarding VAT payable, already paid (1 line for each invoice). Particularly for the payable VAT, entry may not be made by each voucher or invoice, but once a month instead at the end of the month.

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+ Column 3: Noting down justifications of economic operations that arise;

+ Column 4: Noting down the VAT amount already paid in the period according to each voucher;

+ Column 5: Noting down the VAT amount still to be paid at the beginning of the period, the payable VAT amount arising in the period according to each voucher and the VAT amount still to be paid at the end of the period.

At the end of the period, book-keeping shall be done to close the book, plus the arising VAT amount payable, already paid during the period and calculate the VAT amount still to be paid at the end of the period.

After closing account books, the person who makes entry in the book and the head of the household or the director of the production and business establishment must sign and write down their names.

b/ Detailed book of VAT entitled to reimbursement (Form No. S 02 - DN)

- Objectives and scope of application:

This book shall be applicable to production and business establishments subject to tax calculation by tax deduction method.

The book shall be used for entry to reflect the VAT amount to be reimbursed, already reimbursed and to be additionally reimbursed at the end of the reporting period.

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This book shall be opened every quarter and shall be entered according to each voucher regarding VAT to be reimbursed, already reimbursed in the reporting period.

+ Columns 1, 2: Noting down the number and the date of each voucher;

+ Column 3: Noting down justifications of economic operations that arise in connection with each voucher;

+ Column 4: Noting down the VAT amount still to be reimbursed at the beginning of the period, the VAT amount still to be reimbursed during the period and the VAT amount still to be reimbursed at the end of the reporting period.

+ Column 5: Noting down the VAT amount that has already been reimbursed in the reporting period.

At the end of the period, the book-keeping shall be done to close the book, calculate the total of the additional VAT amount to be reimbursed, already reimbursed and calculate the remaining VAT amount to be reimbursed at the end of the reporting period.

After closing account books, the person who makes entry in the book and the chief accountant must sign and write down their full names therein.

c/ Detailed book of VAT entitled to exemption or reduction (Form No. S 03 - DN)

- Objectives and scope of application:

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The book shall be used for entry to reflect the VAT amount to be exempted or reduced, already exempted or reduced and be additionally exempted or reduced at the end of the reporting period.

- Descriptions and methods of entering in the book:

This book shall be opened every quarter and shall be entered according to each voucher on VAT to be exempted or reduced, and already exempted or reduced during the reporting period.

+ Columns 1, 2: Noting down the number and the date of each voucher;

+ Column 3: Noting down justifications of economic operations that arise in connection with each voucher;

+ Column 4: Noting down the VAT amount to be additionally exempted or reduced at the beginning of the period, the VAT amount to be exempted or reduced during the period and the VAT amount to be additionally exempted or reduced at the end of the reporting period.

+ Column 5: Noting down the VAT amount already exempted or reduced during the reporting period.

At the end of the period, the book-keeping shall be done to close the book, calculate the total of the additional VAT amount to be exempted or reduced and already exempted or reduced, and calculate the remaining VAT amount to be exempted or reduced at the end of the reporting period.

After closing account books, the person who makes entry in the book and the chief accountant must sign and write down full their names therein.

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1. Business establishments must organize book-keeping of enterprise income tax in accordance with the provisions of the current book-keeping regimes and the stipulations herein.

2. Business establishments must do the book-keeping of turnovers, incomes and expenses in a rational and legitimate way in order to determine the taxable incomes in accordance with the provisions of the Law on Enterprise Income Tax.

3. The book-keeping of enterprise income tax shall use the following accounts:

- Account 3334 - Enterprise Income Tax (Account 3334 "Profit tax" is renamed Account 3334 " Enterprise income tax").

- Account 421- "Undistributed interest" (Account 421 "Undistributed interest" is renamed Account 421 "Undistributed profit".

Account 3334 shall be used to reflect the amount of enterprise income tax to be paid and the situation on enterprise income tax payment to the State Budget.

a/ A number of the following stipulations shall be observed in accounting of Account 3334:

- Account 3334 shall be applicable to all enterprises under various branches and economic sectors.

- Enterprises shall have to submit the enterprise income tax to the tax declarations agency. Every quarter, enterprises shall make temporary payment of the quarter's tax amount in full and on time to the State Budget according to the tax payment notice issued by the tax agency.

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Debit:

- The amount of enterprise income tax that has been paid to the State Budget;

- The amount of enterprise income tax entitled to exemption or reduction, to be deducted from the payable amount;

- The amount of enterprise income tax to be paid according to the tax agency's quarterly notice shall be greater than the amount of enterprise income tax actually paid when report on annual tax settlement is approved.

Credit: The payable of enterprise income tax amount.

Credit balance: The remaining enterprise income tax amount to be paid to the State Budget.

Debit balance: The amount of enterprise income tax paid is greater than the payable amount (the tax amount paid in excess).

c/ Method of accounting of a number of major economic activities

- Every quarter, based on the tax agency's notice on the amount of enterprise income tax to be paid according to plan, entry shall be made as follows:

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Credit: Account 3334 - Enterprise' income tax

- When making payment of enterprise income tax to the State Budget, entry shall be made as follows:

Debit: Account 334 - Enterprise income tax

Credit: Accounts 111, 112, etc...

- At the end of the year, when making report on annual tax settlement for approval and determining the amount of enterprise income tax to be paid, entry shall be made as follows:

+ Where the amount of enterprise income tax actually paid according to the approved annual tax settlement is greater than the amount of enterprise income tax to be paid according to the tax agency's quarterly notice, entry of the balance to be paid additionally shall be made as follows:

Debit: Account 421 - Undistributed profit

Credit: Account 3334 - Enterprise income tax

+ Where the amount of enterprise income tax to be paid according to the tax agency's quarterly notice is greater than the amount of enterprise income tax actually paid according to the approved annual tax settlement, entry of the balance shall be made as follows:

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Credit: Account 421 - Undistributed profit

- Where enterprise income tax is permitted to be exempted or reduced by the competent authority, entry of the exempted or reduced amount of tax shall be made as follows:

Debit: Account 3334 -Enterprise income tax

Credit: Account 421 - Undistributed profit.

C.- ORGANIZATION OF IMPLEMENTATION

1. This Circular will be effective for implemen-tation from January 1, 1999; all previous documents contrary to the stipulations herein are now repealed.

2. By the end of the 31st December 1998, where Account 3331 "Turnover tax" has the Credit balance, enterprises, when opening account books for 1999, shall carry forward that balance to Account 3331 "Payable VAT" (Details of the part on turnover tax) in order to follow up the continued settlement concerning payment of turnover tax to the State Budget. When enterprises making payment of turnover tax for 1998, entry in books shall be made as follows:

Debit: Account 3331 - Payable VAT (Details of the part on turnover tax)

Credit: Accounts 111, 112,...

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Debit: Account 3334 - Enterprise income tax (Details of the part on turnover tax of the previous year)

Credit: Accounts 111, 112,...

3. The Director of the General Department of Tax, the Director of the Book-Keeping System Department and the Director of the General Department of Management of State Capital and Property in Enterprises, the Tax Department and the Department of Management of State Capital and Property in Enterprises shall co-ordinate with the relevant branches and assist the provincial/municipal People's Committees in guiding and inspecting the implementation of this Circular in enterprises.

4. Business establishments, the various sectors and localities shall report in time any difficulties that arise in the course of implementation to the Ministry of Finance for consideration and guidance for supplementation.

THE MINISTRY OF FINANCE




Pham Van Trong

Thông tư 100/1998/TT-BTC hướng dẫn kế toán thuế giá trị gia tăng (GTGT), thuế thu nhập doanh nghiệp (TNDN) do Bộ Tài Chính ban hành