Goods sold in isolated areas to passengers who have completed exit procedures and goods sold from the inland to duty-free shops would be entitled to the value-added tax (VAT) rate of zero percent.
|Producing shoes for export to Europe at Ha Tay Texche Co. Ltd. in Hanoi__Photo: VNA|
This is suggested by the Ministry of Finance (MOF) in a draft decree guiding the 2008 Law on Value-Added Tax.
Under current regulations, enterprises selling goods at airports’ isolated areas are eligible for the VAT rate of zero percent but not entitled to credit of input VAT.
Under the draft, the zero-percent VAT rate would also apply to goods exported abroad or sold into non-tariff areas; works built or installed abroad or in non-tariff areas; sold goods which are delivered and received outside Vietnam; spare parts and supplies for repair or maintenance of vehicles, machinery or equipment for foreign partners or for consumption outside Vietnam; goods exported on the spot, and other cases regarded as export under law.
In order to enjoy the zero-percent tax rate, traders would have to enter into a contract on sale or processing of exported goods or entrusted processing of exported goods or a service provision contract with an organization or individual based overseas or in a non-tariff area. They would also have to possess non-cash payment documents for exported goods and services and other law-prescribed documents; and customs declarations, for exported goods.- (VLLF)