Under Finance Ministry Circular No. 123/2007/TT-BTC of October 23, guiding the implementation of tax policies and incentives for programs and projects funded with official development assistance (ODA), managers and principal contractors of non-refundable ODA projects are exempt from import tax, special sale tax (if any) and value-added tax on goods they directly import or entrust other entities to import for implementation of their projects.
Foreign contractors and sub-contractors are entitield to import tax and value-added tax exemption for machinery, equipment and means of transport imported into Vietnam by mode of temporary import for re-export to serve construction of works under non-refundable ODA- projects and are exempt from export tax when re-exporting them.
Managers of non-refundable ODA projects enjoy refund of value-added tax amounts they have paid when buying goods and services in Vietnam if their approved contracts signed with contractors are inclusive of value-added tax and they are not allocated capital from the state budget to pay value-added tax.
If donors set up their representative offices in Vietnam and directly buy goods and services to implement non-refundable ODA projects or assign managers of ODA projects to implement these projects, they will be entitled to refund of paid value-added tax amounts.
Foreign contractors and sub-contractors are entitield to exemption from import tax and value-added tax on machinery, equipment and means of transport imported into Vietnam by mode of temporary import for re-export to serve the construction of works under non-refundable ODA projects and exemption from export tax when re-exporting such machinery, equipment and means of transport. However, they shall pay import tax and special sale tax on cars with less than 24 seats they temporarily import into Vietnam for use. Upon completing the construction of works of projects, they shall re-export such imported cars and will be refunded paid import tax and special tax amounts.
This Circular replaces Circular No. 41/2002/TT-BTC of May 3, 2002, guiding the application of tax policies to ODA-funded programs and projects.-