On 1 May 2018, Circular No. 25/2018/TT-BTC (“Circular 25”) issued by the Minister of Ministry of Finance on 16 March 2018 will officially come into effect, guiding Decree No. 146/2017/ND-CP ("Decree 146"). Circular 25 amends and supplements Circular No. 78/2014/TT-BTC (“Circular 78”) and Circular No. 111/2014/TT-BTC with some new noteworthy points as follows:
1. Guidance on calculating value added tax (“VAT”) on exported products which are natural resources and minerals
Article 1 of Circular 25 amends and supplements Clause 23, Article 4 of Circular No. 219/2013/TT-BTC (“Circular 219”) (Circular 219 was amended and supplemented by Circular No. 130/2016 / TT -BTC (“Circular 130”) as follows:
In comparison with Circular 130, regarding the export products being natural resources and minerals not yet processed into other products Circular 25 supplements cases as prescribed at Clause 1, Article 1 of Decree No. 146/2017/ND-CP, they will be subject to VAT.
In addition, Circular 25 provides that the value of natural resources and minerals directly exploited as direct or indirect costs of their exploitation, will exclude the cost of transportation from the place of exploitation to the place of processing.
Simultaneously, Circular 25 removes the provisions at Point c Clause 1 Article 1 of Circular 130.
2. Amending contents on some VAT refund cases
Circular 25 amends and supplements the contents of Clause 4 Article 18 of Circular 219 and removes the guidelines by Circular 130 on Decree No. 01/2015/ND-CP and stipulated that business establishments are not entitled to refund VAT in cases where the imported goods are then exported, which export goods are not exported in the geographical areas of customs operation in accordance with the provisions of customs legislation.
3. Supplementing and amending contents related to the depreciation of fixed assets of the transferee
It is noted that Circular 25 is added Item e Point 2.2 Clause 2 Article 6 of Circular 78 (which was amended and supplemented in Article 4 of Circular No. 96/2015/TT-BTC ("Circular 96"). Accordingly, in cases where an enterprise transfers part or all of its capital to another enterprise according to law provisions, if the property is transferred, the transferee will only be allowed to make depreciation of its fixed assets into deductible expenses with respect to transferable assets eligible for depreciation deduction according to the remaining value on the accounting books of the transferor.