Ministry Of Finance Drafts Circular Guiding VAT Law 2024

Draft Circular Guiding VAT Law 2024: An Important Step Towards Transparency & Feasibility

Currently, the Ministry of Finance is urgently drafting a Circular detailing some articles of the Value Added Tax (VAT) Law No. 48/2024/QH15 and guiding the implementation of the Government’s Decree detailing some articles of this Law.

This important document is expected to complete the legal framework for VAT towards transparency, synchronicity, maximizing convenience for taxpayers, and enhancing the efficiency of state tax management.

Core Contents Detailed In The Circular

As authorized by VAT Law No. 48/2024/QH15, the Ministry of Finance has the authority to stipulate in detail four key contents, which will be clarified in the Draft Circular, including:

• Procedures and documentation for determining non-taxable VAT objects (Clause 28, Article 5 of the VAT Law).
• Procedures and documentation for applying the 0% tax rate (Clause 6, Article 9 of the VAT Law).
• Details on goods and services groups applying the percentage method of tax calculation (Clause 4, Article 12 of the VAT Law).
• Tax payment documents on behalf of foreign parties (Point a, Clause 2, Article 14 of the VAT Law).

Besides, the Draft Circular will also provide detailed guidance on other necessary contents to ensure state management requirements, as assigned in Clause 1, Article 13 of the draft Decree guiding the implementation of the VAT Law.

Why Is Detailed Guiding Circular Necessary?

The issuance of a detailed guiding Circular is an indispensable step to concretize the provisions of the Law and the Decree. This document will create a solid legal basis to help organizations and individuals (taxpayers) fulfill their tax obligations correctly and fully, avoiding unnecessary errors.

Objectives Of The Draft Circular

The Ministry of Finance stated that the Circular is being drafted with the main objectives:

• Completing the VAT regulatory system: Ensuring transparency, ease of understanding, and ease of implementation for all related parties.
• Enhancing management efficiency: Contributing to collecting tax correctly and fully for the state budget.
• Protecting legitimate rights: Ensuring fairness and legitimate rights for taxpayers.

The drafting of the Circular also closely follows the direction of tax policy reform towards simplicity, unity, and stability. Concurrently, this document will focus on overcoming shortcomings and issues that have arisen in the practical implementation of the VAT Law over the past period, ensuring feasibility, transparency, and convenience in organization and implementation, while aligning with international practices and economic integration trends.

Basis For Drafting & Applicable Scope

The Draft Circular is being drafted based on strict compliance with the provisions of the VAT Law, its implementing documents, and relevant laws, ensuring consistency within the legal system. Simultaneously, the Circular will also inherit and promote regulations that have proven effective in the current Circular.

This Circular will apply to:

• Taxpayers according to Article 4 of the VAT Law.
• Tax authorities.
• Organizations and individuals related to the implementation of VAT laws.

The early drafting and issuance of the Circular not only contribute to completing the important legal framework for VAT but also meet the urgent requirements of administrative reform, promote socio-economic development, and sustainable international integration.