To: Taxation Departments of provinces and centrally run cities

According to the reports of some local Taxation Departments on problems in the course of implementation of the Finance Ministry’s Circular No. 133/2004/TT-BTC of December 31, 2004, pending the promulgation of a circular supplementing and amending this Circular, the Ministry of Finance hereby guides a number of specific issues for uniform implementation as follows:

I. REGULATION ON AND PROCESS OF MANAGEMENT AND IMPLEMENTATION OF DOUBLE TAXATION AVOIDANCE AGREEMENTS

1. Pending the promulgation of a new regulation on and a new process of management and application of double taxation avoidance agreements within the taxation sector, the regulations promulgated together with the General Department of Taxation’s Decision No. 1133/TCT/QD/HTQT of July 13, 2001, (Regulation 1133-TCT/QD/HTQT) and Decision No. 1134/TCT/QD/HTQT of July 13, 2001 (Process 1134/TCT/QD/HTQT), continue to be applied, except for provisions contrary to those of Circular No. 133/2004/TT-BTC .

Pursuant to the provisions of Points 8.2 and 8.3, Article 3, Part II of Regulation 1133-TCT/QD/HTQT, for cases where a taxpayer requests to have the overseas-paid tax amount credited into the tax amount payable in Vietnam or to enjoy under a relevant agreement tax reduction or exemption, with the credited, reduced or exempted amount exceeding VND 500 million, Principal/ Municipal Tax Departments shall be responsible for evaluating dossiers of request and, within 10 working days after receiving such dossiers, transferring them to the General Department of Taxation for settlement.

Particularly for freight tax, Principal/ Municipal Tax Departments are permitted to handle cases of exemption or reduction involving amounts exceeding VND 500 million under the guidance of Point 2 of the General Department of Taxation’s Official Letter No. 3312-TCT/HTQT of October 12, 2004;

The form of certification of resident in Appendix 1 to Process 1134-TCT/QD/HTQT is replaced with form 6 - HD/HTQT of Circular No. 133/2004/TT-BTC ; the form of certification of the paid tax amount in Appendix 2 of Process 1134-TCT/QD/HTQT is replaced with form 3 - HD/HTQT of Circular No. 133/2004/TT-BTC .

Appendices No. 3, 4 and 5 of Process 1134-TCT/QD/HTQT continue to be applied. However, in these appendices, the legal bases related to the Finance Ministry’s Circular No. 52-TC/TCT of August 16, 1997, Circular No. 95/1997/TT-BTC of December 29, 1997, and Circular No. 37/2000/TT-BTC of May 5, 2000, shall be replaced with Circular No. 133/2004/TT-BTC and the words “Don xin” (Application for permission) shall be replaced with the word “Don de nghi” (Request) (see enclosed appendices);

2. Dependent individual laborers may make written requests for application of a relevant agreement or authorize income-paying agencies to do so. The notarization or authentication of contracts or papers of authorization must comply with the provisions of Article 48 of Decree No. 75/2000/ND-CP of December 8, 2000, on notarization and authentication.

3. Papers of authorization made abroad must go through consular legalization procedures provided for in Circular No. 01/1999/TT-NG of June 3, 1999, of the Ministry of Foreign Affairs.

II. PROCEDURES FOR CERTIFICATION OF TAX AMOUNTS ALREADY PAID IN VIETNAM

1. Circular No. 133/2004/TT-BTC does not guide the certification of tax amounts already paid in Vietnam for residents in Vietnam. However, if residents in Vietnam request such certification, the Principal/ Municipal Tax Departments shall use form 3 - HD/HTQT and form 4 - HD/HTQT for certification.

Forms of request and procedures for certification shall be form 1 - HD/HTQT and the provisions of Part D.III of Circular No. 133/2004/TT-BTC , and added with the following details:

- Section III.2 of form 1 - HD/HTQT is added with the following point d:

d. Certification of tax amount paid in Vietnam

d.1. Taxable income in Vietnam:

d.2. Type of income:

d.3. Time of arising of income:

d.4. Paid income tax amount:

- A written request for application of a relevant agreement must be enclosed with the certificate of a resident of Vietnam, made according to form 6 - HD/HTQT, or a request for certification of a resident of Vietnam, made according to form 5 - HD/HTQT (if not yet so certified):

2. Information supplied in forms 1 - HD/HTQT, 2 - HD/HTQT and 5 - HD/HTQT must be evidenced by copies of documents or vouchers issued by competent state authorities. Such copies of documents or vouchers must be notarized or authenticated according to Vietnam’s current legal provisions.

Because the Finance Ministry’s Circular No. 68/2001/TT-BTC of August 24, 2001, does not issue a form of certificate of paid tax amount and, as a result, Treasuries cannot monitor the tax amounts already paid for each payable tax amount, provincial/municipal Tax Departments shall give certifications of paid tax amounts according to form 3 - HD/HTQT or form 4 - HD/HTQT (on a case-by-case basis) on the basis of tax payment receipts issued by Treasuries and tax management information supplied by requesting taxpayers (for example, tax payment declarations, tax settlement records, the situation of performance of tax obligations in the period for which certification is requested…).

Where a taxpayer has an income tax receipt issued by the tax agency or income-paying agency or an income tax credit (10%) voucher issued by the income-paying agency under the provisions of the Finance Ministry’s Circular No. 81/2004/TT-BTC of August 13, 2004, or a certificate of paid tax amount issued by the Provincial/ Municipal Tax Department according to a form in Appendix 06 -NTNN to Circular No. 05/2005/TT-BTC of January 11, 2005, he/she shall enclose it with the written request for use as evidence.

Tax amount paid in Vietnam is a tax amount payable under tax laws (from which a remuneration to the authorized collection agency is not yet deducted) as guided at Point 1 of the General Department of Taxation’s Official Letter No. 1900-TCT/HTQT of May 30, 2003.

Tax agencies shall grant certificates of tax amounts already paid in Vietnam to tax payers that have fulfilled their obligations to pay taxes into the state budget, which are requested for certification, in the relevant year and preceding years.

3. The time limit for declaration stated in Section I.1.5 of form 2 - HD/HTQT is counted from the first day on which individuals or organizations start their activities in Vietnam which are related to the request for application of a relevant agreement.

III. PROCEDURES FOR APPLICATION OF AGREEMENTS TO INTERNATIONAL TRANSPORTATION COMPANIES

1. For cases of freight tax exemption or reduction for which copies of tax payment receipts issued by treasuries are not required;

2. Freight tax reduction or exemption shall be considered on the basis of actual transportation. Dossiers of request for freight tax exemption or reduction with respect to international transportation must be submitted within five days after the expiration of the time limit for freight tax exemption or reduction.

In cases where freight tax was reduced or exempted in the preceding year, freight tax may be declared and paid at the exemption or reduction rate and finalized on the basis of the amount actually arising at the year end, provided that the shipping company or agent must undertake to fully pay the payable tax amount if the temporarily paid tax amount is lower than the payable tax amount. However, the temporary payment according to the exemption or reduction regime must stop immediately in the month following the month when exemption or reduction conditions no longer exist;

3. The shipping company’s agent being the Vietnamese side will give certifications of the operation time of the shipping company with respect to the transportation of crude oil. Where a shipping company has no agent, the Vietnamese party that directly signs the transportation contract will give such certification;

4. Beneficial ower from regulations on exemption or reduction for income from international transport must be international transportation business enterprises operating their ships into Vietnamese ports for cargo or passenger transportation, and they shall be determined as follows:

- Being shipping companies making written requests for application of a relevant agreement, for cases where the shipping companies directly submit their written requests (based on the names of the requesters); or

- Being shipping companies authorized or designated as agents to carry out procedures, for cases where shipping companies make such authorization or designate such agents (based on the names of the authorizers or agent designators in the authorization contracts or agent designation documents);

At the same time, there must be evidence that the shipping companies have operated ships for cargo or passenger transportation (documents and papers on the ships’ names, permits for port entry and exit, certifications of dates of port entry and exit, and lists made for each ship).

Provincial/ Municipal Tax Departments may collate the ships’ names with relevant dossiers so as to detect violations.

Above are guidelines for handling a number of matters related to the implementation of Circular No. 133/2004/TT-BTC. Any problems emerging in the course of implementation should be reported by Provincial/ Municipal Tax Departments to the Ministry of Finance (the General Department of Taxation) for study and timely guidance.