Tax obligations regarding scientific research contract

To respond to the official letter No 358/CT-TT&HT of Hai Phong Tax Department on explaining tax policy, General Department of Taxation issued the official letter No 1674/PCCS of May 3, 2007 as follows:

1. In respect of VAT and BIT

- Basing on Law on Value Added Tax (VAT), Decree No 158/2003/ND-CP dated 10^th December 2003 of the Government regulating in detail the implementation of the Law on VAT and Law on Supplementation of and Addition to a Number of Article of Law on VAT, in case where Management Unit of Project on “Planning development of gymnastics and sports of Haiphong City till 2020” signed a contract of consultation of development of gymnastics and sports of Haiphong City, the consultation activity performed by Gymnastics and Sports Scientific Institute will be subject to VAT at rate of 10%.

- Point 5, Section III, Part E, Circular No 128/2003/TT-BTC dated 22^nd December 2003 of Ministry of Finance providing guidelines for implementation of Decree No 164/2003/ND-CP dated 22^nd December 2003 of the Government regulating in detail the implementation of the Law on Business Income Tax (BIT) provides:” business establishments are exempted from BIT in respect of income earned from performance of scientific research and technological development contracts, scientific and technological information contracts.” Basing on this provision, the Gymnastics and Sports Scientific Institute, which is a non-business entity specializing in scientific researching, will be exempted from BIT in respect of income earned from performance of scientific research and technological development contracts.   

 2. In respect of making out invoice

The Gymnastics and Sports Scientific Institute is a non-business entity specializing in scientific researching and therefore, it does not has invoices; the Gymnastics and Sports Scientific Institute should submit an application to tax authority for granting detail sales invoices in accordance with provisions stipulated by Circular No 120//2002/TT-BTC dated 30 December 2002 of Ministry of Finance guiding the implementation of Decree No 89/2002/ND-CP dated 17^th November 2002 of Government concerning the printing, issuing, managing and using invoices. The Gymnastics and Sports Scientific Institute shall be granted the detail sales invoices and be responsible to pay taxes in accordance with regulation.

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