The finance ministry has added thousands of goods items into the list of goods, of which value added tax (VAT) is halved to 5 percent from 5 percent.
According to Circular 91/2009/TT-BTC, the goods items subject to VAT tax will be applied from 1 February 2009 to 31 December 2009.
Accordingly, a series of goods items entitled to the tax reduction include goods served for consumption and production such as knives and cutting blades; goods used for machines or mechanical tools such as welding rods; different types of water tanks with a capacity of over 300 litter; steam boilers; steam turbines and other types of turbines; and others.
In addition, many other groups of goods items are also added into the list of tax-cut goods such as freezing equipment, ice machines and other freezing equipment; equipment used for workshops or laboratories and liquid or gas refining machines and equipment; Agriculture machines, gardening machines; milking machines and milk processing machines; printers, copiers and fax machines and so on.
The finance ministry said that for the goods that are entitled to the tax reduction, if importers have not yet been paid tax, they are required to make additional declarations so that the customs agency adjusts the 50 percent VAT reduction as instructed.
In case businesses have paid VAT for declared imported goods and deducted this amount of VAT, there is no need of make adjustment; in case VAT has already paid for imported goods that have not yet been declared, deducted VAT, importers are allowed to chose to not readjust but declare, deduct the whole paid VAT amount or ask the customs to identify the abundant paid VAT so that the tax agency refunds the abundant amount as regulated.
As for goods sold from 1 February 2009, in case businesses have not halved the VAT rate in their invoices but buyers require the sellers to revise the invoices in order to be entitled to the 50 percent VAT reduction, the buyers and sellers must make a report or make a negotiation in written forms and also the sellers must make a revised invoice.
In case the buyers do not ask for any revision of 10 percent-VAT invoices, the sellers must declare and pay tax at the VAT rate of 10 percent as written in the invoices; the buyers are allowed to declare and deducted VAT of the bought goods at VAT rate of 10 percent as written in the invoices.
In case the buyers are unknown, the sellers are not allowed to make any revision for invoices and must declare and pay tax at VAT rate of 10 percent as written in the invoices.
According to the finance ministry, supplementing the goods items into the list of goods that are entitled to the 50 percent VAT reduction is aimed to specifying Decision 16/2009/QD-TTg dated 21 January 2009 by the prime minister regulating some measures on tax in order to stimulate investment and consumer demand, prevent economic downturns and settle difficulties for businesses.
Previously, the finance minister also issued Circular 85/2009/TT-BTC regulating five groups of goods items that are subject to the 50 percent VAT reduction.