In comparison with the current provisions, there are many changes in this Circular, especially the provision on VAT calculation methods.

Accordingly, from January 1, 2014, an enterprise with preceding year’s revenue less than VND 1 billion shall determine VAT by the direct method if it does not register to voluntarily apply the credit method.

For a newly established enterprise, it shall be eligible for calculating VAT by the credit method only when registering and belonging to one of the two following cases:

1. A new enterprise established from the project of an operating enterprise which is the subject of calculating VAT by the credit method

2. A newly established enterprise implementing the investment, purchase of fixed asset, machines, equipment with the value of VND 1 billion or more, regardless of the purchase time is before or after the establishment. However, this value of VND 1 billion excludes passenger automobiles of 9 seats or less.

Besides the above two cases, a newly established enterprise must apply the direct method in the first calendar year. From the second calendar year, it may apply the credit method if the first year’s revenue is at least VND 1 billion.

The time for submitting the registration notice to voluntarily apply the credit method is December 20 of each year (applicable to enterprises with the revenue less than VND 1 billon) and is the time submitting tax registration dossier (applicable to the newly established enterprises)

This Circular takes effect on January 1, 2014, replaces Circular No. 06/2012/TT-BTC dated January 1, 2012 and Circular No. 65/2013/TT-BTC dated May 17, 2013 of the Ministry of Finance.

The attachment is the List of businesses which are calculated VAT by percentage rate upon revenue