NEW CIRCULAR 93 2017 TT-BTC ON VAT METHOD APPLICATION

On 19 September 2017, the Ministry of Finance issued Circular No. 93/2017/TT-BTC (“Circular 93”) providing amendments on procedures to register and change VAT calculation and declaration method, aiming to reform administrative procedures to facilitate enterprises. Accordingly, from 05 November 2017 when Circular 93 takes effect, the submission of Form No. 06/GTGT for such registration and change will no longer be required.

Basically there is no change in criteria to apply VAT methods (direct method vs. credit method), e.g. newly established enterprises and enterprises having yearly VAT taxable revenue less than VND 1 billion are generally subject to direct method unless voluntarily register to apply credit method. However, instead of submitting Form No. 06/GTGT to register for credit method or notify when changing VAT declaration method, Circular 93 provides that the tax authority would refer to the submitted VAT declaration dossier by the taxpayers which would define their chosen method of VAT calculation and declaration accordingly:

  • If enterprises register to apply credit method, they are required to submit VAT declaration Forms No. 01/GTGT and 02/GTGT to the managing tax authority.
  • If enterprises register to apply direct method, they are required to submit VAT declaration Forms No. 03/GTGT and 04/GTGT to the managing tax authority.

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