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MINISTRY
OF FINANCE
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SOCIALIST REPUBLIC
OF VIETNAM
Independence - Freedom - Happiness
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No. 219/2013/TT-BTC
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Hanoi, December 31, 2013
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CIRCULAR
GUIDANCE ON
IMPLEMENTATION OF THE LAW ON VALUE-ADDED TAX AND THE GOVERNMENT'S DECREE NO.
209/2013/ND-CP DATED DECEMBER 18, 2013 PROVIDING GUIDANCE ON SOME ARTICLES OF
THE LAW ON VALUE-ADDED TAX.
Pursuant to the Law on
Value-added tax No. 13/2008/QH12 dated June 03, 2008 and the Law No. 31/2013/QH13
dated June 19, 2013 on amendments to some Articles of the Law on
Value-added tax;
Pursuant to the Law on Tax
administration No. 78/2006/QH11 dated November 29, 2006 and the Law No. 21/2012/QH13
dated November 20, 2012 on the amendments to the Law on Tax
administration;
Pursuant to the Government's
Decree No. 209/2013/ND-CP dated
December 18, 2013 providing guidance on some Articles of the Law on Value-added
tax;
Pursuant to the Government's
Decree No. 118/2008/ND-CP dated November 27, 2008, defining the functions,
tasks, powers and organizational structure of the Ministry of Finance;
At the request of the Director of
the General Department of Taxation,
The Minister of Finance provides guidance
on implementation of the Law on Value-added tax:
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GENERAL PROVISIONS
Article
1. Scope of regulation
This Circular provides guidance
on the commodities and services that are subject to tax and not subject to tax,
taxpayers, basis and methods for calculating, deducting, refunding tax, and the
places to pay value-added tax (VAT).
Article
2.Taxable goods and services
Goods and services subject to VAT
(hereinafter referred to as taxable goods and services) are those used for
production, trading, and consumption in Vietnam (including those purchased from
overseas organizations and individuals), except for the goods and services in
Article 4 of this Circular.
Article
3. Taxpayers
Payers of VAT are the
organizations and individuals that manufacture, trade in taxable goods and
services in Vietnam regardless of their lines and forms of business
(hereinafter referred to as business establishments), the organizations and
individuals that import goods or purchase services from abroad
(hereinafter referred to as importers), including:
1. The
business organizations established and registered under the Law on Enterprises,
the Law on State enterprises (now the Law on Enterprises), the Law on
Cooperatives, and other business laws.
2. Business
organizations of political organizations, socio-political organizations, social
organizations, socio-professional organizations, the army, public service
organizations, and other organizations;
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4. Individuals,
households, independent groups of businesspeople, and other entities that
engage in manufacturing, trading, or importation;
5. Any
business organization or businessperson in Vietnam that purchases services
(including services attached to goods) from a foreign organization that does
not have a permanent establishment in Vietnam, or from a foreigner that is not
a resident in Vietnam, the business organization or businessperson that
purchase services is the taxpayer, except for the cases in which VAT is exempt
in Clause 2 Article 5 of this Circular.
Regulations on permanent
establishments and residents are introduced in the laws on corporate income tax
and personal income tax.
6. Branches
of the export processing companies that are established to trade goods and do
the tasks related to goods trading in Vietnam in accordance with the laws on
industrial parks, export-processing zones, and economic zones.
Example 1: Sanko LLC. is an
export processing company. Apart from manufacturing for exportation, Sanko LLC.
is also licensed to import goods for sale or for exportation, and Sanko LLC.
must establish a branch to do this task. This branch shall independently keep
accounting records, declare and pay separate VAT on such task instead of
including it in the VAT on manufacturing for exportation.
When importing goods for
distribution (sale), the branch of Sanko LLC shall declare and pay VAT on the
importation and on each sale (including exportation). Sanko LLC. shall use
invoices, declare and pay VAT as prescribed.
Article
4. Goods and services that are not subject to VAT
1. Products from farming
(including agroforestry products), breeding, and aquaculture that are produced,
catched, sold, or imported and are not processed into
other products (hereinafter referred to as unprocessed) or have only been
preprocessed
Preprocessed products
are those that have only been cleaned, dried, husked, grinded, milled,
threshed, split, cut, salted, put in cold storage (cooled or frozen), preserved
with sulfur dioxide, sulphur solution, or other solutions, and other common
means of preservation.
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When company B sells the
pigs or have them processed for sale, they are
subject to VAT.
2. Breeds of
livestock, plant varieties, including eggs, breeds, seeds, stems, tubers,
semen, embryos, genetic materials that are raised, imported, and traded. The
breeds of livestock and plant varieties that are not subject to VAT are the
products of the importers and traders that have the certificates of registration
of animal breed or plant variety trading issued by regulatory bodies. The
animal breeds and plant varieties that apply quality standards of the state
must satisfy the requirements imposed by the state.
3. Irrigation
services, plowing services, dredging channels, dredging in-field trenches
serving agricultural production; harvesting services.
4. Salt
derived from seawater, rock salt, pure salt, refined salt, iodized salt
composed primarily of sodium chloride (NaCl).
5. State-owned
houses sold to tenants.
6. Transfer
of right to use land (hereinafter referred to as land tenure).
7. Life
insurance, health insurance, learner’s insurance, other insurance services
related to humans; insurance for livestock, plants and other agriculture
insurance services; insurance for ships and instruments for fishing;
reinsurance.
8. The
finance, banking, and securities services below:
a) Credit extension includes:
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- Discounted
transfer of negotiable instruments and other valuable papers;
- Bank
guarantee;
- Finance lease;
- Issuance
of credit cards.
When a financial institution
collects fees for issuance of credit cards, the fees collected from the clients
are classified as revenues from credit extension, such as fee for early
repayment, penalties for late repayment, fee for debt restructuring, fee for
loan management, and other fees classified as revenues from credit extension
are not subject to VAT.
The fees related to card
transactions are not classified as revenues from credit extension, such as fee
for reissuance of PINs, fee for copies of invoices, claiming fee, fee for card
replacement, fee for card destruction, fee for card conversion, and other fees
are subject to VAT.
- Domestic
and international factoring for the banks allow to process international
payments;
- Revenue
from liquidation of collateral by a credit institution or law enforcement
authority in accordance with the laws on handling collateral.
If the owner of the collateral
defaults on the debt and has to transfer the collateral to a credit
institution, both parties must follow the prescribed procedure for transferring
collateral.
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Where the credit institution
takes the collateral to clear debt, credit institution shall record an increase
in the value of business assets. When the credit institution sells the assets,
VAT must be declared and paid if it is subject to VAT.
Example 3: In March 2014, company
A, which pays VAT using credit-invoice method, pledges its machinery and
equipment as collateral to take a loan at bank B, which is due in one year (the
deadline is March 31, 2015). On March 31, 2015, company A defaults on the loan
and has to transfer the collateral to bank B. Company A must follow the
prescribed procedure for collateral transfer. When Bank B sells the collateral
to recover the debt, the sold collateral is not subject to VAT.
- Information
provision services provided by the units and organizations affiliated to the
State bank for credit institutions to use for credit extension in accordance
with the Law on the State bank.
Example 4: X is a unit of the
State bank and is allowed by the State bank to provide credit information. In
2014, X signs contracts to provide information for some commercial banks to
serve their credit extension and other activities. The revenue from provision
of credit information serving credit extension is not subject to VAT; the
revenue from provision of credit information serving other activities of the
commercial banks beyond the Law on the State bank is subject to 10% VAT;
- Other
forms of credit extension prescribed by law.
b) Separate loans that are not a
business and irregularly given by taxpayers that are not credit institutions.
Example 5: Joint-stock company C
has idle money and signs a contract to give a loan to company T, which is due
after 06 months, and receives an interest. Such interest is not subject to VAT.
c) Securities services include:
brokerage, proprietary trading, issuance guarantee, investment consultancy,
depository, securities investment fund management, securities company
management, securities investment portfolio management, market organization
services of Stock Exchanges or Securities trading centers, services related to
the securities registered and deposited at Vietnam Securities Depository,
granting loans for margin trading, advance payment for securities and other
types of securities trading prescribed by securities laws.
Information provision, auctions
of shares of issuers, technical support for online transactions of Stock
Exchanges.
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Example 6: In April 2014, company
A contributes capital in the form of machinery and equipment to the creation of
joint-stock company B. The company A’s contribution is valued at 2.5 billion
VND, which is equal to 25% of company B’s total capital. In November 2014,
company A sells this capital contribution to ABB Foundation for 4 billion VND.
This amount of 4 billion VND is revenue from capital transfer and not subject
to VAT.
dd) Selling debts;
e) Foreign currency trading;
g) Derivative financial services
include: forward contracts, futures contracts, call option, put option, other
derivative financial services prescribed by law;
h) Selling collateral put up by
the organizations 100% charter capital of which is owned by the government to
settle bad debts of Vietnamese credit institutions.
9. Medical
services, veterinary services, including examination, treatment, and prevention
of diseases for human and animals, birth control services, convalescence and
rehabilitation services for patients, patient transport services, sickbed and
sickroom rental services; testing, radiography services; blood and blood
products for patients.
If medicines are included in the service
package (according to regulations of the Ministry of Health), the revenue from
medicines in the package is also not subject to VAT.
10. Public
postal and telecommunications services, and public Internet services provided
by the government, postal and telecommunications services from abroad
(inbound).
11. Maintenance
of zoos, flower gardens, parks, street greeneries, public lighting, funeral
services. The services mentioned in this Clause do not depend on the source of
payment. In particular:
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b) Public lighting includes lighting
on the streets, in alleys, neighborhoods, flower gardens, and parks. Revenue
from public lighting is not taxable;
c) Funeral services provided by
the business establishments licensed to provide funeral services include
funeral parlor and car rental service, burial service, cremation service, grave
move service, and grave care service.
12. Maintenance,
repairs, and construction funded by the people (including contributions and
sponsorships), humanitarian aid for cultural and artistic works, public works,
infrastructure, and housing for beneficiaries of incentive policies.
When a source of funding other
than people’s contribution or humanitarian aid is used that does not exceed 50%
of the total investment in the work, the value of the whole work is not subject
to tax.
When a source of funding
other than people’s contribution or humanitarian aid is used that exceeds 50%
of the total investment in the work, the value of the whole work is subject
to VAT.
Beneficiaries of incentive
policies include the contributors, beneficiaries of social protection that
receive benefits from government budget; members of poor households, and other
cases.
13. Education
and vocational training as prescribed by law, including foreign language
training, artistic training, sports training, nursing, children’s nursing, and
training of other professions in order to raise extend education, improve
professional knowledge and skills.
The revenues from meal, student
transport collected by educational institutions from preschool to high school
are not subject to tax.
Revenues from boarding school
services; revenues from training (including the examinations and issuance of
qualifications are part of the training course) are not subject to VAT. If the
training institution only organizes the examinations and issues qualifications
that are part of the training course without running the course, the
examinations and issuance of qualifications are also not subject to tax. The
examinations and issuance of qualifications beyond the training course are
subject to VAT.
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14. Audio and
video broadcasting funded by government budget.
15. Publishing,
importing newspapers, magazines, specialist newsletters, political books,
textbooks, teaching materials, law books, scientific books, books using
languages of ethnic minorities, propagation pictures, including those in the
form of audio and video discs/tapes, electronic data; money and money printing.
Specialist magazines, specialist newsletters.
Political books are the books that propagate the political
orientation of the Communist Party and the state to serve political objectives
and anniversaries; the books that encourage good deeds; the books that contain
speeches and researches of leaders of the Communist Party and the state.
Textbooks are those used for teaching and learning from preschool
to high school (including books for reference that are conformable with school
programs)
Teaching materials are the books used for teaching and learning in
universities, colleges, junior colleges, and vocational schools.
Law books are the books that contain legislative documents.
Scientific books are those used for introducing scientific and
technological knowledge related to manufacturing and branches of science.
The books using languages of ethnic minorities include bilingual
books.
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16.
Public transport by bus and tram within a province, a city or the
routes adjacent to the city as prescribed by the Ministry of Transport.
17.
Goods that cannot be manufactured in Vietnam and must be imported,
including:
a)
Imported machinery, equipment, parts, and supplies serving scientific research
and technological development;
b)
Imported machinery, equipment, parts, specialized vehicles and supplies serving
petroleum exploration and extraction;
c)
Airplanes (including engines), oil rigs, and ships that cannot be manufactured in
Vietnam and are imported as fixed assets or leased from a foreign party to
serve manufacturing, trading, or to sublease.
The
importer must present the documents about customs procedure, customs
supervision and inspection, export tax, import tax, and administration of tax
on exported and imported goods prescribed by the Ministry of Finance to the
customs.
The
Ministry of Planning and Investment shall compile a list of machinery,
equipment, parts, supplies serving scientific research and technology development
that can be manufactured in Vietnam, a list of machinery, equipment, parts, and
specialized vehicles serving petroleum exploration and extraction that can be
manufactured in Vietnam, and a list of airplanes, oil rigs, and
ships that can be manufactured in Vietnam as the basis for identifying
those that cannot be manufactured in Vietnam and need importing.
18.
Weapons and specialized vehicles serving national defense and
security.
a) The
weapons and specialized vehicles serving national defense and security
enumerated in the list compiled by the Ministry of Finance in cooperation with
the Ministry of National Defense and the Ministry of Public Security.
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b)
Imported weapons, and specialized vehicles (including supplies, machinery,
equipment, parts) serving national defense and security that are exempt from
import tax according to the Law on Export and import tax, or imported within
annual quota imposed by the Prime Minister.
The
procedure and documentation for imported weapons and vehicles are not subject
to VAT during importation according to regulations of the Ministry of Finance
on customs procedure, customs supervision and inspection, export tax,
import tax, and administration of tax on exported and imported goods.
19.
Imported goods, goods/services sold to other organizations and
individuals as humanitarian aid or non-refundable aid in the following cases:
a) Goods
imported as humanitarian aid or non-refundable aid must be
certified by the Ministry of Finance or Services of Finance;
b) Gifts for regulatory bodies, political organizations,
socio-political organizations, socio-political-professional organizations,
social organizations, socio-professional organizations, and the army prescribed
by the laws on gifts;
c) Gifts for individuals in Vietnam prescribed by the laws on
gifts;
d) Belongings of foreign entities provided with diplomatic
immunity prescribed by the laws on diplomatic immunity; belongings brought to
Vietnam by Vietnamese people residing abroad;
dd)
Belongings in luggage within tax-free allowance;
The limit
on tax-free imported goods is specified in the Law on Export and import tax and
its guiding documents.
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Instructions
on VAT refund for diplomatic missions, consular offices, and representative
offices of international organizations in Vietnam are provided by the Ministry
of Finance.
e) Goods
and the goods/services sold to other organizations and individuals as
humanitarian aid or non-refundable aid for Vietnam.
In order
to be exempt from VAT, the international organization and or foreigner that
buys goods/services in Vietnam as humanitarian aid and non-refundable aid must
send a note to the seller, which specifies their name, the quantity or value of
purchased goods, and bears certification of the aid by the Ministry of Finance
and Services of Finance.
When
selling goods, the seller must issue an invoice specifying that the goods are
sold at VAT-exclusive prices to a foreign entity as non-refundable aid or
humanitarian aid, keep the aforesaid note as an evidence when declaring tax.
Any foreign entity or international organization that purchases
goods/services in Vietnam as non-refundable aid or humanitarian aid at
VAT-inclusive prices may claim a refund according to Clause 6
Article 18 of this Circular.
20.
The goods forwarded through Vietnam’s territory; goods temporarily
imported or temporarily exported, raw materials imported for manufacturing or
export processing under contracts with foreign partners
The goods
and services traded between a foreign party and a free trade zone, or among
free trade zones.
Free
trade zones include: export-processing zones, export processing companies,
tax-suspension warehouses, bonded warehouses, special economic zones,
commercial - industrial zones, and other economic zones established and
provided with similar tax incentives as free trade zones according to Decisions
of the Prime Minister. The transactions between a free trade zone and an
external party are considered export/import.
The
procedures and documents for considering VAT exemption must comply with
instructions of the Ministry of Finance on customs procedure, customs
supervision and inspection, export tax, and import tax.
21.
Technology transfers according to the Law on Technology transfers;
intellectual property right transfers according to the Law on Intellectual
property. If a contract of technology transfer or intellectual property right
transfer is associated with a transfer of machinery/equipment, only the value
of transferred technology or intellectual property right is not subject to VAT.
If such value cannot be separated, VAT shall be imposed on the total value of
the transferred technology or intellectual property right and
machinery/equipment.
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22.
Imported gold in the form of bullions, pieces, and other forms
that are not fashioned into jewelry or other items.
Gold
in the form of bullions, pieces, and other forms of unfashioned gold shall
be identified in accordance with the laws on gold trading.
23.
Exported natural resources that are not processed into other
products.
The natural
resources that are not processed into other products include the minerals that
have been filtered, grinded, refined, or the resources that have been cut.
Example
8: Taxpayer A exports natural stones in the form of blocks and slabs. The exported
stones are not subject to VAT.
Example
9: Taxpayer B exports white
limestone in the form of grains and powder. The exported white limestone grains
and powder are not subject to VAT. If taxpayer B exports ultra-fine limestone
powder (according to standards of competent authorities), or ultra-fine
limestone powder coated with acid, they are considered processed into other
products and thus taxable when being exported.
24.
Prosthetic body parts, including those permanently implanted into
the human body; crutches, wheelchairs, and other special instruments serving
the disabled.
25. Goods/services provided by any business household or
businessperson that earns an annual revenue of ≤ 100 million VND.
The tax liability of the business household or businessperson
shall be determined in accordance with tax laws.
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a)
Duty-free goods at duty-free shops prescribed by the Prime Minister.
b) Goods
in national reserve sold by national reserve authorities.
c)
Charged activities of the state according to the laws on fees and charged.
d) Bomb
and mine clearance carried out by the army at the constructions funded by
government budget.
If the
purposes of the goods that are not subject to VAT during importation are
changed, VAT shall be declared and paid to the customs authority where the
customs declaration is registered. The entities that sell goods to the domestic
market must declare and pay VAT to their supervisory tax authorities.
Article 5. Cases of exemption declaring and paying VAT
1.
An organization or individual receives a monetary compensation
(including compensation for land and property on land that is withdrawn by a
competent authority), bonus, allowance, or payment for transfer of emission
permit, or other revenues.
Any
taxpayer that receives a monetary compensation, bonus,
allowance, payment for transfer of emission permits, or other
revenues must make a receipt for such revenues. The taxpayer shall make
receipts for spending according to the spending purposes.
If
compensation is provided in the form of goods/services, the provider of
compensation must issue an invoice, declare and pay VAT as if such
goods/services are sold; the recipient of compensation shall declare and deduct
tax as prescribed.
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Example
10: Company P&C earns an interest from buying bonds and a dividend from
buying shares of other companies. Company P&C is not required to declare
and pay VAT on the interest buying bonds and the dividend.
Example
11: Company A receives a compensation of 50 million VND for contract
termination from company B. Company A shall make a receipt and is not required
to declare and pay VAT on such amount.
Example
12. Company X buys goods from company Y. Company X pays a deposit to company Y
and is paid an interest on that deposit by company Y. Company X is not required
to declare and pay VAT on such interest.
Example
13: Company X sells goods to company Z for totally 440 million VND. According
to the contract, company Z shall pay in instalments for 03 months with an
interest of 1% of the total payment per month. After 03 months, company X
receives from company Z an amount that includes 440 million VND in price and
13.2 million VND in interest (440 million VND x 1% x 3 months). Company X is
not required to declare and pay VAT on that 13.2 million VND.
Example
14: Insurer A and company B signs an insurance contract. When insurance is
claimed, insurer A pays a compensation in cash to company B. Company B is not
required to declare and pay VAT on this compensation.
Example
15: ABC is a milk company that pays its distributors to do a sales promotion
(in accordance with the laws on trade promotion), marketing, and product
display. When receiving the payment, the distributors that use credit-invoice
method shall issue VAT invoices and calculate VAT at 10%, the distributors that
use direct methods shall only use sale invoices and pay direct VAT at the
prescribed rate.
2.
A business organization or businessperson in
Vietnam purchases services from a foreign organization that does not have a
permanent establishment in Vietnam, or from am overseas individual that is not
a resident in Vietnam. These services include: repair of vehicles, machinery,
equipment (including supplies and parts); advertising, marketing; trade
promotion; brokering sale of goods and services to abroad; training,
international postal and telecommunications services that are provided outside
Vietnam, lease on foreign satellite transmission lines and frequency bands.
3.
The non-business organizations and individuals shall not pay VAT
on the sale of their assets.
Example 16:
Mr. A, who is not a businessperson, sells a 4 seater car to Mr. B for 600
million VND. Mr. A is not required to declare and pay VAT on the payment for
the car.
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4.
The entities that transfer project of investment in manufacturing
or trade of goods/services subject to VAT to other companies or cooperatives.
Example
18: Company P executes a project of investment in an industrial alcohol
factory. In March 2014, 90% of the project is completed according to the
design, and the investment is 26 billion VND. Due to a financial difficulty,
company P transfers the incomplete project to company X for 28 billion VND.
Company X receives and keeps executing this project. Company P is not required
to declare and pay VAT on the value of the transferred project.
5.
A company or cooperative that pays VAT using credit-invoice
method and sells unprocessed or preprocessed farming, breeding, aquaculture
products to another company or cooperative for commercial purposes shall be
exempt from declaring and paying VAT. The selling price on the VAT invoice is
VAT-exclusive price, the line of tax rate must be left blank and crossed out.
A company
or cooperative that pays VAT using credit-invoice method and sells unprocessed
or preprocessed farming, breeding, aquacultural products to other entities such
as business households, businesspeople, other organizations or other
individuals has to declare and pay 5% VAT according to Clause 5 Article 10 of
this Circular.
A
business household, businessperson, company, cooperative, or business
organization that pays VAT directly on value added using direct method and
sells unprocessed or preprocessed farming, breeding, aquaculture products for
commercial purposes shall declare and pay VAT at 1% of the revenue.
Example
19: Company B, which pays VAT using credit-invoice method, purchases rice
directly from the farmers or farming companies. This direct purchase of rice
from the farmers or farming companies is not subject to VAT.
When
company B sells rice to exporter C, company B is not required to declare and
pay VAT on the rice sold to exporter C.
When
company B sells rice to company D, which is a noodle producer,
company B is not required to declare and pay VAT on the rice sold to company
D.
On the
invoices issued to exporter C and company D, company B must specify that the
selling price is VAT-exclusive. The line of tax rate must be left blank and
crossed out.
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Example
20: Company A, which is a business organization that pays tax using
credit-invoice method, buys coffee beans from farmers, then sells them to
business household H. 5% VAT shall be levied on the revenue from selling coffee
beans to business household H.
Example
21: After purchasing tea leaves from a farmer, Mr. X’s household sells them to
Mr. Y’s household. Mr. X’s household must calculate and pay direct VAT at 1% of
the revenue from selling tea leaves to Mr. Y’s household.
If VAT on
the invoices for the unprocessed products or preprocessed products that are
sold to a company or cooperative has been declared, the seller and the buyer
must adjust the invoices to be exempt from VAT.
6.
When transferring depreciated in-use assets between a business
establishment and its wholly-owned subsidiaries or among the these subsidiaries
to serve the manufacturing or trade of goods/services subject to VAT, invoices
and VAT payment are not required. The taxpayer that transfers their assets must
make a Decision on asset transfer enclosed with the documents about the asset
origins.
When
transferring a fixed asset, the value of which has been reassessed, or when
transferring an asset to another business establishment that manufactures of
trades in goods/services that are not subject to VAT, VAT shall be paid and VAT
invoices must be made.
7.
Other cases:
Taxpayers
are not required to declare and pay tax in the following cases:
a) Assets
are contributed to establish a new company. Contributed assets must have:
contribution record, partnership or cooperation contract; asset valuation
record (made by a valuation council or the contributor or an organization
licensed for valuation), and documents about asset origins.
b) Assets
are circulated among financially dependent subsidiaries of a company
(hereinafter referred to as dependent units); assets are circulated when a
company is divided, split, amalgamated, merged, or converted. When assets are
so circulated, the taxpayer that has the circulated assets must make an asset
circulation order enclosed with documents about the asset origins and is not
required to issue invoices.
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c)
Compensation claimed from a third party under an insurance contract.
d) The
delegated payments that are not related to the sale of goods/services of the
taxpayer.
dd) The
revenue from goods/services sold by agents, commissions paid to agents,
including: postal and telecommunications services, lottery, air tickets, bus
tickets, train tickets, ship tickets, international transport agents; air and
maritime service agents entitled to 0% VAT; insurance agents.
e)
Revenue and commissions on selling goods/services that are not subject to VAT.
Chapter
II
TAX BASIS AND TAX CALCULATION METHOD
Section
1. Tax basis
Article
6. Tax basis
Tax basis is taxable prices and
tax rates.
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1. Taxable
prices of goods and services sold by taxpayer are VAT-exclusive price. Taxable prices of goods and services subject to special excise tax are
the prices inclusive of special excise tax and exclusive of VAT.
Taxable prices
of goods and services subject to environmental protection tax
are the prices inclusive of environmental protection tax
and exclusive of VAT; taxable prices of goods and services subject to both
special excise tax and environmental protection tax are the
prices inclusive of special excise tax and environmental protection tax but exclusive
of VAT.
2. Taxable
prices of imported goods are the prices at the border checkpoint (hereinafter
referred to as import price) plus (+) import tax (if any) plus (+) special
excise tax (if any) plus (+) environmental protection tax (if any). Regulations
on taxable prices of imported goods shall be applied to calculation of import
prices.
If the goods are eligible for
exemption or reduction of import duty, the taxable price is the import price
plus (+) import tax payable after reduction or exemption.
3. Taxable
prices of the goods and services (whether bought externally or not) used as
gifts, donations, or substitute for wages are the taxable prices of the same
kinds or equivalent goods and services at the same time.
Example 22: Unit A manufactures
electric fans and exchange 50 fans with company B for steel. The selling price
(tax-exclusive) is 400,000 VND/fan. Taxable price = 50 x 400,000 VND = 20,000,000
VND.
Taxable prices of the invitations
(complimentary) to art performances, fashion shows, beauty pageants, and sports
competitions permitted by competent authorities are zero (0). The organizer of
the show or competition is responsible for the quantity of invitations and
recipients before the show or competition takes places If the organizer charges
these invitations, the organizer shall incur penalties prescribed by tax laws.
Example 23. Company X is
permitted by a competent authority to hold a beauty pageant. Apart from the
tickets that are sold, company X also sends invitations to some VIPs. The list
of recipients is printed on these invitations. When declaring VAT, taxable
price of the invitation is zero (0). If tax authority finds that company X
collect money on these invitations, company X shall incur penalties prescribed
by tax laws.
4. Taxable
prices of goods and services for internal use.
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The goods circulated internally
such as goods put into storage or semi-finished products during the manufacture
process within a business establishment are not subject to VAT.
If the taxpayer manufactures
their own fixed assets serving the manufacture or trading of taxable goods and
services, invoices are not required when such assets are completed and put into
use. Input VAT on the fixed assets may be declared and deducted as prescribed.
Taxable prices of the
goods and services used for manufacturing or trading of goods and services that are
not subject to VAT are the selling prices of the same kinds or equivalent goods
and services at the same time.
Example 24:
Unit A manufactures electric fans and install 50 fans in the
its own workshops. The selling price (VAT-exclusive)
is 1,000,000 VND/fan. VAT rate is 10%.
Taxable price =
1,000,000 VND x 50 = 50,000,000 VND.
Unit A shall issue an internal invoice
specifying 50,000,000 VND in taxable price and 5,000,000
VND in VAT. Unit A may deduct tax in this invoice.
Example 25. Company Y
manufactures bottled water. The VAT-exclusive price of a bottle on the market
is 4,000 VND. When company Y uses 300 bottles in a trip of the company, VAT on
these 300 bottles, which do not serve the manufacture or trading, shall be
levied: 4,000 x 300 = 1,200,000 (VND).
Example 26: Apparel company B has
a threading workshop and a sewing workshop. When company B sends thread from
the threading workshop to the sewing workshop to continue the process, VAT
shall not be levied on such thread.
Example 27. Company AP purchases
raw materials to manufacture animal feeds, and has deducted input VAT on the
purchased raw materials. Part of the animal feeds manufactured is sold to the
market, and the rest is used for internal animal breeding in the company.
Company AP must issue a VAT invoice and pay VAT on the animal feeds used for
animal breeding. VAT on the animal feeds used for animal breeding must not be
deducted.
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If a taxpayer uses goods/services
for their business such as transport, aviation, rail transport, or post and
telecommunications without calculating output VAT, the taxpayer must specify in
writing the cases and the limits on the amount of goods and services used
internally.
5. Taxable
prices of goods and services used for sales promotion in accordance with trade laws
are zero (0). In case they are not conformable with trade laws, tax shall be
declared and paid as if they are used internally, given, or donated.
Some
forms of sales promotion:
a) If goods or services are
provided free of charge as samples or gifts, taxable prices are zero (0).
Example 29: Company P is a
manufacturer of carbonated drinks. In 2014, company P does a sales promotion in
the form of “buy 10 get 01 free" in May and December. The sales promotion
in May 2014 is conformable with trade laws, thus taxable price of every product
given free of charge in May 2014 is zero (0).
The sales promotion in December
2014 is not conformable with trade laws, thus company P must declare and pay
VAT on the products given free of charge in December 2014.
b) If goods or services are
provided at reduced prices, the taxable prices are the reduced prices during
the sales promotion that has been registered or notified.
Example 30: N is a
telecommunications company that sells prepaid cards. Company N registers a sale
promotion in the form of price reduction from April 01, 2014 to the end of
April 20, 2014, during which a prepaid card is sold for 90,000 VND is stead of
100,000 VND.
The taxable price of a prepaid
card during the sales promotion = 90,000 VND : (1+10%)
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6. Taxable
prices of asset rental such as housing, offices, workshops, warehouses, yards,
vehicles, machinery, equipment are the VAT-exclusive rents.
If the rent is paid by
instalments or prepaid for a period of time, the taxable price is the
instalment or the prepaid amount exclusive of VAT.
The rent agreed by both parties
is the rent written in the contract. If a rent bracket is prescribed by law,
the rent must be charged within that bracket.
7. If a
commodity is paid for by instalments, the taxable price is the original price
exclusive of VAT and interest.
Example 31: Company X sells
allows its customer to pay for a motorbike by instalments. The total price is
25.5 million VND, including 25 million VND in selling price and 0.5 million VND
in interest, thus taxable price is 25 million VND.
8. Taxable
prices for goods processing are the prices under the processing contracts
exclusive of VAT, inclusive of wages, costs of fuel, machinery, raw materials,
and other expenses serving the processing.
9. Taxable
prices of construction and installation are the VAT-exclusive values of the
completed constructions or works.
a) If the price is inclusive of
building materials, the taxable price is the VAT-exclusive price inclusive of
building materials.
Example 32: Company B is
contracted to complete a construction. The VAT-exclusive payment 1,500 million
VND including 1,000 million VND in the value of building materials, then
taxable price is 1,500 million VND.
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Example 33:
Company B is contracted to complete a construction. The
total value of the construction is 1,500 million VND
(VAT-exclusive); the value of building materials provided by investor A is
1,000 million VND, then taxable price is 1,500 million VND - 1,000 million
VND = 500 million VND.
c) Taxable prices of completed
and transferred works are their VAT-exclusive value.
Example 34: Company X (party A)
hires company Y (party B) to build a new workshop.
The total value (VAT-exclusive)
of the construction is 200 billion VND, including:
- Construction
value: 80 billion VND
- Value of
equipment provided by party B: 120 billion VND
- 10% VAT:
(80 billion VND + 120 billion VND) x 10% = 20 billion VND
- Total
amount payable: 220 billion VND
- Party A
shall:
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+ 20 billion VND in VAT may be
deducted from output VAT on sold products or refunded.
If party A agrees to pay 80
billion VND to party B for the completed and transferred works, the taxable
prices is 80 billion VND.
10. When
transferring real estate, taxable price is the transferring price minus (-)
deductible land value.
a) Deductible land value is
calculated as follows:
a.1) If land
is allocated by the state to build houses for sale, the deductible land value
include land levy and compensation for land clearance as prescribed by law.
Example 35: In 2014, real estate
company A is allocated with land by the state to build houses for sale. Land
levy is 30 billion VND (before deducting compensation for land clearance and
land levy reduction) Land levy is reduced by 20%. Compensation for land
clearance is 15 billion VND.
Total deductible land value:
- 20%
reduction in land levy: 30 billion VND x 20% = 6 billion VND;
- Land levy
payable after reduction: 30 billion VND - 6 billion VND - 15 billion VND = 9
billion VND;
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a.2) When land
tenure is put up for auction, the deductible land value is the successful bid.
a.3) If land is leased to invest in infrastructure for lease or to
build houses for sale, the deductible land value is the land rent payable to
government budget (exclusive of land rent reduction) and compensation for land
clearance as prescribed by law. The Law on Land 2013 shall apply to the pieces
of land leased to build houses for sale from July 01, 2014.
Example 36. VN-KR is a joint-stock company specialized in
infrastructure for industry and services. VN-KR leases land from the state and
pays a lump sum of land rent to build infrastructure of an industrial park; the
lease period is 50 years. The land area is 300,000 m2,
the rent is 82,000/m2.
Accordingly, the total land rent is 24.6 billion VND. VN-KR is not granted land
rent reduction or exemption. After infrastructure is finished, VN-KR leases out
16,500 m2 to an investor with a
lease period of 30 years; the rent is 650,000 VND/m2,
inclusive of VAT.
Accordingly, the VAT-inclusive rent for the infrastructure for 30
years:
16,500 VND m2 x [650,000 VND–
(82,000 VND/m2 : 50 years x 30 years)]
= 9,9132 billion VND.
VAT-exclusive rent = 9.9132 billion VND : (1 +
10%) = 9.012 billion VND.
VAT = 9.012 billion VND x 10% = 0.9012 billion VND.
a.4) When a taxpayer receives land tenure from another entity,
deductible land value is the land price when the transfer is made, inclusive of
the value of infrastructure (if any); the taxpayer must not deduct input VAT on
infrastructure value that has been included in the deductible land value.
If the
deductible land value is exclusive of infrastructure value, the taxpayer may
deduct input VAT on the infrastructure.
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Example
37: In August 2013, company A buys 200 m2 of land from Mr. B in Binh
An Residential Area in province X for 6 billion VND. Company A sign a land
transfer contract, which is notarized in accordance with land laws, and has a
receipt for the payment of 6 billion VND. Company does not build any thing on
this piece of land. In October 2014, company A sells this piece of land for 9
billion VND. Company A must issue a VAT invoice and pay VAT. The land value
deducted from the taxable price is 6 billion VND.
Example
38: In November 2013, company A buys 300 m2 of land and
infrastructure thereon from Mr. B for 10 billion VND without sufficient
documents to determine the land price at that time. In April 2014, company A
sells this piece of land together with the infrastructure thereon for 14
billion VND. Accordingly, the deductible land value is the land price imposed
by the People’s Committee of the province when company A buys the piece of land
(November 2013).
Example 39:
In September 2013, company B buys
2,000 m2 of land together with infrastructure thereon from real
estate company A for totally 62 billion VND (including 40 billion VND in
VAT-exclusive land price, meaning the unit price is 20 million VND/m2).
The invoice issued by company A
indicates:
- VAT-exclusive
selling price: 60 billion VND
- VAT-exclusive
land price = 40 billion VND
- VAT on
infrastructure: 2 billion VND
- Total
amount payable: 62 billion VND
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VAT payable = output VAT -
deductible input VAT
Assuming deductible input VAT is
1.5 billion VND, then VAT payable = 2 billion VND - 1.5 billion VND = 0.5
billion VND.
Company B keeps developing the
infrastructure and 10 villas (200 m2/villa) for sale. Total input
VAT on the villas is 3 billion VND.
On April 01, 2015, company B
signs a contract to sell one villa to customer C for 10 billion VND. Deductible
land value of the villa is calculated as follows:
- Land
value (exclusive of infrastructure value) when the villa is sold by company A:
20 million VND x 200 m2 = 4 billion VND.
- Infrastructure
value of a villa:
(20 billion
VND : 2000 m2) x 200 m2 = 2 billion
VND
- Deductible
land value of the villa (including infrastructure value) when it is sold by
company A: 6 billion VND.
The invoice issued by company
B indicates:
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- Deductible
land value: 6 billion VND
- VAT = [(10
billion VND - 6 billion VND) x 10% = 0.4 billion VND.
- Total amount payable: 10.4
billion VND
Assuming that company B sells out
all 10 villas in the month. VAT payable by
company B = output VAT - deductible input VAT = 0.4 billion VND x 10
villas - 3 billion VND = 1 billion VND.
2 billion VND in VAT on
infrastructure written on the invoice when company A sells these 10 villas
shall not be deducted.
If company B does not
include infrastructure value in the land value, which is
4 billion VND, the invoice shall be made as follows:
- Selling price of a
villa: 10 billion VND
- Deductible
land value: 4 billion VND
- VAT = (10 billion VND - 4
billion VND) x 10% = 0.6 billion VND.
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Assuming that company B
sells out all 10 villas in the April 2015. VAT
payable by company B = output VAT - deductible input VAT (including
the input VAT on the construction of the villas and input VAT on the
infrastructure) = 0.6 billion VND x 10 villas - 3 billion VND - 2
billion VND (input VAT on infrastructure) = 1
billion VND.
a.5) If real
estate under a build-transfer (BT) contract is paid with land tenure, the
deductible land value is the land price when the BT contract is signed. If the
land price is unknown when the BT contract is signed, the deductible land value
is the payment for the whole construction decided by the People’s Committee of
the province.
Example 40:
Joint-stock company P signs a BT contract with the People’s Committee of
province A to build a bridge in exchange for land tenure. The amount payable by
the People’s Committee is 2,000 billion VND, and company P will be allocated
with 500 hectares of land in district Y of the same province. When company P
uses this land to build houses for sale, the deductible land value is 2,000
billion VND.
a.6) When a
real estate company buys the right to use a piece of agricultural land from an
individual seller under a contract, then a competent authority permits the
conversion of that piece of land into residential land where houses or
apartment buildings are built for sale, the deductible land value is the price
of the piece of land paid to the seller and other expenses, including: land
levy paid to government budget for land conversion, personal income tax paid on
behalf of the seller (if agreed by both parties).
a.7) When a
multistory apartment building is built for sale, deductible land value of every
m2 of housing equals (=) the deductible land value mentioned in
Points a.1 to a.6 divided by (:) the area (m2) of floor area,
exclusive of shared areas such as corridors, stairways, basement, and
underground constructions.
b) When
infrastructural works or houses are built for sale or for lease, taxable price
equals (=) the amount of money collected during the progress of the project
minus (-) the deductible land value,
which is proportional to the ratio of collected money to the total value
contract.
11. The
VAT-exclusive remunerations or commissions for running an agent or brokering
the sale of goods/services, export and import entrustment are taxable prices.
12. Taxable
prices of the goods and services using special receipts on which the selling
prices are VAT-inclusive, such as stamps, bus tickets, lottery tickets, etc.:
VAT-exclusive
price =
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1 + tax
rate (%)
13. Taxable
prices of electricity generated by hydroelectric power plants affiliated to
Vietnam Electricity (EVN), including electricity generated by the hydroelectric
power plants affiliated to the electricity general companies affiliated to EVN,
are 60% of the average selling price of commercial electricity in the previous
year, exclusive of VAT. If the average selling price of commercial electricity
in the previous year is unknown, the price provisionally imposed by EVN shall
apply, provided such price is not lower than the average selling price of
commercial electricity in the year preceding the previous year. When the
average selling price of commercial electricity in the previous year is found,
an adjustment shall be included in the declaration of the month in which the
price is found. The average selling price of commercial electricity in the
previous year must be found by March 31 of the next year.
14. Taxable
prices of casino services and other prize games are the amount of money
collected from such services (inclusive of VAT) minus special excise tax.
Taxable price is calculated as
follows:
Taxable
price =
Collected
amount
1 + tax
rate
Example 41: In a tax period, a
casino presents the following figures:
- Total
amount collected from players at the exchange counter: 43 billion VND.
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Actual revenue: 43 billion VND -
10 billion VND = 33 billion VND
The
revenue of 33 billion VND is inclusive of VAT and special excise tax.
Taxable price
is calculated as follows:
Taxable
price =
33 billion VND
= 30
billion VND
1 + 10%
15. Taxable prices
of transport and material handling services are the VAT-exclusive charges,
whether the materials are handled by the taxpayer itself or by another service
provider.
16.
The price of an all-inclusive package of travel services
(inclusive of meals, accommodation, and travel) is considered VAT-inclusive.
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Taxable
price =
Price
of the package
1
+ tax rate
If the
price is inclusive of the costs of return flights, meals, accommodation, and
other expenses overseas (if valid receipts are presented), such costs may be
deducted from the taxable price. Input VAT on the goods and services serving
the all-inclusive tour shall be deducted in full.
Example
42: Tourism company H signs a contract to provide an all-inclusive package tour
in Vietnam for 50 Thai tourists for 05 days. The total payment for the tour is 32,000
USD. Company H must pay for the air tickets, meals, accommodation,
and sightseeing under the contract. The payment for return air tickets is
10,000 USD (1 USD = 20,000 VND).
The
taxable price is calculated as follows:
+ Taxable
revenue:
( 32,000 USD -
10,000 USD) x 20,000 VND = 440,000,000 VND
+ Taxable price:
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= 400,000,000
VND
1
+ 10%
Company H may deduct the input
VAT on the goods and services serving the tour.
Example 43: Tourism company N
signs a contract to provide an all-inclusive tour in China for Vietnamese
tourists for 05 days. The price is 400 USD/tourist. Company N must pay 300
USD/person to tourism company C in China. Accordingly, the taxable price is:
400 - 300 = 100 (USD/person).
17. The
collectible from pawnbroking services, including the interest and other
revenues from the sale of pawned articles, is VAT-inclusive.
Taxable price
is calculated as follows:
Taxable
price =
Collectible
1
+ tax rate
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Taxable price is
calculated as follows:
110
million VND
= 100
million VND
1
+ 10%
18. The prices
on the covers of the books subject to VAT according to the Law on Publishing
are VAT-inclusive prices and shall be used to calculate VAT and revenues. If
books are sold at prices other than the prices on the cover, VAT shall be
imposed on the actual selling price.
19.
Taxable prices of printing is the payment for
printing. If the contractual price includes printing price and paper price, the
taxable price is also inclusive of paper price.
20. VAT-exclusive
remunerations or commissions on brokering assessment, brokering compensation
examination, claiming compensation from a third person (including the costs)
earned by the insurer are taxable prices.
21. In the
case of service purchase in Clause 5 Article 3 of this Circular, taxable price
is the VAT-exclusive price written in the service contract.
22. Taxable price
of the goods and services mentioned in Clauses from 1 to 21
include the surcharges payable to the sellers.
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Taxable price is expressed
as VND. If a taxpayer earns revenue in a foreign currency, it must be converted
into VND according to the average exchange rate on inter-bank foreign exchange
market announced by the State bank during the time the revenue is earned.
Article
8. Time for calculating VAT
1. For goods
sale, VAT shall be calculated when the ownership or the right to use goods is
transferred to the buyer, whether the payment is made or not.
2. For
service provision, VAT shall be calculated when service provision
is completed or when the invoice for service provision is made,
whether the payment is made or not.
For telecommunications services,
VAT shall be calculated when comparing the data about telecommunications charge
according to the contracts between telecommunications service providers, but
not later than 2 months from the month in which the charge is incurred.
3. For
electricity and water supply, VAT shall be calculated when the electricity or
water consumption is recorded.
4. For real estate
trading, construction of infrastructural works, houses for sale or for lease,
VAT shall be calculated when money is collected according to the project
schedule or the contract. The taxpayer shall declare output VAT incurred in the
tax period according to collected amount.
5. For
construction and installation, including shipbuilding, VAT shall be calculated
when the construction or a work is completed and put into use, Whether the
payment is made or not.
6. For
imported goods, VAT shall be calculated when the customs declaration is
registered.
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1. 0% VAT is
applied to exported goods and services; construction and installation overseas
and in free trade zones; international transport; exported goods and services
that are not subject to VAT, except for the cases in Clause 3 of this Article,
in which 0% VAT is not applied.
Exported goods and services are
those that are sold to overseas organizations and individuals and are consumed
outside Vietnam, sold to the entities in free trade zones, or sold to foreign
customers as prescribed by law.
a) Exported goods include:
- The goods exported to other
countries, including those under entrustment contracts;
- The goods sold to free trade
zones as prescribed by the Prime Minister; the goods sold to duty-free shops;
- The goods that are delivered to
the recipients outside Vietnam;
- Parts and
supplies for repairing, maintaining vehicles, machinery, and equipment of
foreign entities, and those that are used outside Vietnam;
- Cases of
deemed exportation:
+ Forwarded processed goods under
trade laws on international goods trade and export processing.
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+ The goods exported to be sold
at overseas fairs or exhibitions.
b) Exported
services include the services directly provided for overseas organizations
and individuals and are consumed overseas; the services provided for the entities
in free trade zones and consumed within the free trade zones.
Overseas individuals are the
foreigners that do not reside in Vietnam, the Vietnamese people that reside
overseas and are not present in Vietnam when the services are provided. The
entities in free trade zones are the entities that have registered their
business and other cases prescribed by the Prime Minister.
If services are provided both in Vietnam and overseas, but
the service contract is signed between two taxpayers in Vietnam or two taxpayer
that have permanent establishments in Vietnam, 0% tax is only applied to the
services provided overseas, except for the case of insurance for imported
goods, in which 0% tax is applied to the whole contract value. If the contract
does not separate the services provided in Vietnam, taxable price shall be
determined according to the ratio of expense incurred in Vietnam to the total
expense.
The
service provider that is a taxpayer in Vietnam must provide documents proving
that the services are provided outside Vietnam.
Example 45: Company B signs a contract
with company C to provide some services including consultancy, survey, and
design for company C’s project of investment in Cambodia (both company B and
company C are Vietnamese companies). According to the contract, there are
services that provided in Vietnam and services provided in Cambodia. 0% tax
shall apply to the value of the services provided in Cambodia. Company B must
pay VAT on the revenue from the services provided in Vietnam.
Example 46:
Company D provides some services for company X, including consultancy,
survey, and feasibility study on a project in Laos. Company D is paid 5
billion VND for this contract, inclusive of VAT on the services provided in
Vietnam. The contract does not separate the revenue earned in Vietnam from the revenue
earned in Laos. The expense incurred in Laos (cost of survey) is 1.5 billion
VND and the expense incurred in Vietnam (cost of summarizing and reporting) is
2.5 billion VND.
The VAT-inclusive revenue from
the services provided in Vietnam is calculated as follows:
5
billion VND x
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2.5
billion VND + 1.5 billion VND
=
3.125 billion VND
If company D presents documents
proving that company D sent employees to Laos to carry out the survey, and the documents
proving that company D purchased goods serving the survey in Laos, 0% tax shall
be applied to the revenue from the services provided in Laos, which equals
1.875 billion VND (5 billion VND - 3.125 billion VND = 1.875 billion VND).
c) International transport
includes passenger transport and freight transport along international routes
from to other countries and vice versa, or from one foreign country to another,
regardless of the availability of vehicles. If the international contract
includes a domestic segment, the segment is also considered international
transport.
Example 47: Company X in Vietnam
uses their ships to transport goods from Singapore to Korea. The revenue from
this transport is considered revenue from international transport.
d) Aviation services and maritime
services directly provided to overseas organizations or via agents, including:
0% tax shall be applied to the
following aviation services: catering, takeoff and landing, aircraft parking,
aircraft security; security scanning; luggage conveyance at terminals;
terrestrial technical services; aircraft protection; aircraft towing; aircraft
guiding; passenger boarding bridges; air controlling; flight crew and passenger
transport in the airport apron; freight handling and checking; passenger
services on international flights from Vietnamese airports.
0% tax shall be applied to the
following maritime services: ship towing; pilotage; sea rescue; wharves;
freight handling; moorings; hatch control; hull cleaning; freight checking;
registration,
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- Construction or
installation overseas or in free trade zones;
- The goods
and services that are not subject to VAT when being exported, except for the
cases in Clause 3 of this Article, in which 0% tax is not applied;
- Repairs
to foreign aircraft and ship vessels.
2. Condition
for application of 0% tax:
a) The
documents below are compulsory for exported goods:
- A sale
contract, export processing contract, or export entrustment contract;
- Bank receipts
for payment for exported goods and other documents prescribed by law;
- A customs
declaration prescribed in Clause 2 Article 16 of this Circular.
If goods are delivered to a
recipient outside Vietnam, the seller must provide documents proving the delivery
of goods outside Vietnam such as: a contract to buy goods signed with an
overseas buyer, a contract to sell goods signed with the buyer, documents
proving that goods are received outside Vietnam such as commercial invoices,
bills of lading, packaging notes, Certificates of Origin, etc.; bank receipt
for the payment to the overseas seller by the taxpayer, bank receipt for the
payment to the taxpayer by the buyer.
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b) The
documents below are compulsory for exported services:
- A
contract to provide services for an organization or individual in another
country or in a free trade zone;
- Bank
receipts for payment for exported services and
other documents prescribed by law;
Apart from presenting the
aforesaid documents, providers of repair services for foreign aircraft and sea
vessels must follow the procedure for importing the aircraft or vessel to Vietnam,
and follow the procedure for exporting them after they are repaired in order to
be eligible for 0% tax.
c) The
documents below are compulsory for international transport:
- A
international passenger transport or freight transport contract between the
service provider and the service buyer. For passenger transport, the contract
may be substituted with tickets. Providers of international transport services
must comply with transport laws.
- Documents
proving that payment is made by bank transfer or another method considered bank
transfers. Receipts for direct payment are compulsory for passenger transport.
d) For aviation
services and maritime services:
d.1) 0% tax
shall be applied to the services provided within the international airports and
cargo terminals, provided the following documents are presented:
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- Receitps for bank
transfers or other payments considered bank transfer.
If services are provided for an
overseas organization or airline on an irregular, unscheduled
basis without any contract, a receipt for direct payment made by the overseas
organization or airline is compulsory.
The aforesaid documents are not compulsory
for passenger service charges.
d.2) 0% tax
shall be applied to the maritime services provided within the port area,
provided the following documents are presented:
- A service
contract with an overseas organization or a shipping agent,
or a written request for services by an overseas organization or shipping
agent;
- Documents
proving that the overseas organization or shipping agent makes payment to the
service provider is made by bank transfer or another method considered bank
transfer.
3. 0% tax is not
applied to:
- Overseas
reinsurance; technology transfer, transfer of intellectual property right to
abroad; capital transfer, credit extension, overseas securities investment;
derivative financial services; outbound postal and telecommunications services
(including those provided for the entities in free trade zones; prepaid cards
sold overseas or in free trade zones); exported natural resources that are not
processed into other products; the goods and services provided for the
individuals that do not register to do business in free trade zones, except for
the cases defined by the Prime Minister;
- Oil and
gas purchased from domestic market by a taxpayer and sold to automobiles in the
free trade zone;
- The automobiles
sold to the entitles in free trade zones;
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- 0% tax is
not applied to the following services that are provided in Vietnam for overseas
entities:
+ Sports competitions, art performances,
entertainments, conventions, hotel, training, advertising, traveling and
tourism;
+ Online payment services;
+ Services attached to sale,
distribution, consumption of goods in Vietnam.
Article
10. Tax rate of 5%
10% tax shall be levied on the
goods and services below:
1. Clean
water serving manufacture and everyday life, except for bottled water and other
soft drinks subject to 10% tax.
2. Fertilizers;
ores used for fertilizer manufacture; pesticides and Growth stimulants for
plants and animals, including:
a) Organic and inorganic
fertilizers such as phosphate fertilizers, nitrogenous fertilizer (urea), NPK
fertilizer, mixed urea, potash; biofertilizers and other fertilizers;
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c) Pesticides those in the List
of pesticides complied by the Ministry of Agriculture and Rural Development and
other pesticides;
d) Growth stimulants for plants
and animals.
3. Feeds for
livestock, poultry, and other animals according to the laws on animal feeds,
including processed and unprocessed feeds such as bran, press cakes, fish meal,
bone meal, shrimp meal, and other feeds for livestock, poultry, and other
animals.
4. Dredging
channels, canals, ponds, and lakes serving agriculture; plant cultivation;
preprocessing and preservation of agricultural products (except for dredging
in-field trenches mentioned in Clause 3 Article 4 of this Circular).
Preprocessing and preservation of
agricultural products include drying, husking, threshing, cutting, grinding,
putting into cold storage, salting, and other usual means of preservation
mentioned in Clause 1 Article 4 of this Circular.
5. The
farming, breeding, aquaculture products that are unprocessed or preprocessed (defined
in Clause 1 Article 4 of this Circular), except for the cases in Clause 5
Article 5 of this Circular.
The unprocessed farming products
mentioned in this Clause include unhusked rice, husked rice, corn, potatoes,
cassava, and wheat.
6. Latex and resin that
have undergone insufficient processing; fishing nets and fibers for making
fishing nets regardless of materials.
7. Fresh
foods for business, unprocessed forestry products for business, except for
wood, bamboo sprouts, and the products enumerated in Clause 1 Article 4 of this
Circular.
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Unprocessed forestry products
include the products from natural forests such as rattan, bamboo, mushrooms,
roots, leaves, flowers, herbs, resin, and other forestry products.
Example 49: Company A produces
seasoned triggerfish under the following procedure: fresh triggerfish are
caught and filleted, then seasoned with sugar, salt, solpitol, then packaged
and frozen. The seasoned triggerfish is subject to 10% VAT.
8. Sugar;
by-products during the sugar manufacture process including molasses, bagasse.
9. Products
made of jute, rattan, bamboo, leaves, straws, coconut shells, hyacinth, and
other handicrafts made of recycled materials from agriculture; preprocessed
cotton; newspaper printing paper.
10. Agricultural
machinery and equipment including tractors, transplanters, seeders, threshers,
harvests, combined harvester, and pesticide sprayers.
11. Medical equipment
include radiographic equipment, equipment and instruments for surgery and
treatment; ambulances; instruments for blood pressure measurement,
cardiography, blood infusion, syringes; birth control equipment, and other
medical equipment certified by the Ministry of Health.
Cotton wool, bandages,
gauze pads, and medical tampons; medicines including finished medicines
and raw materials, except for functional foods; vaccines; bioproducts,
distilled water to mix with injectable medicines or intravenous fluids;
chemicals used for testing and sterilization; caps, clothing, facemasks,
gloves, boots, medical towels, breast implants and skin fillers (not including
cosmetics).
12. Teaching
aids include models, pictures, boards, chalks, rulers, compasses, other
equipment and instruments for teaching, research, and scientific
experimentation.
13. Artistic
activities, exhibitions, sports; art performances; cinematography; importing,
distributing, and showing films.
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b) Art performances and art performance organization services must
be licensed by competent authorities.
c) Cinematography; importing,
distributing, and showing films
14. Children’s
toys; books other than those that are not subject to VAT mentioned in Clause 15
Article 4 of this Circular.
15. Scientific
and technological services, which mean the activities that serve or assist in
scientific research and technology development; the activities related to
intellectual property; transfer of technologies, technical regulations and
standards related to measurement, product quality, goods, nuclear and radiation
safety, and atomic energy; consultancy, training, dissemination, and application
of scientific and technological achievements to socio-economic fields under
contracts for scientific and technological services defined in the Law on
Science and technology, not including online games and Internet-based
entertainments.
16. Sale,
lease, and lease-option of social housing according to the Law on Housing.
Social housing means the housing invested by the state or the organizations and
individuals from various economic sectors, which satisfy the criteria for
housing in terms of selling prices, rents, and eligible buyers according to
housing laws.
Article
11. Tax rate of 10%
10% tax shall be levied on the
goods and services that are not mentioned in Article 4, Article 9 and Article
10 of this Circular.
The rates of VAT mentioned in Article 10 and Article 11
shall be uniformly applied to the each type of goods and services, whether they
are imported, manufactured, processed, or traded.
Example 50: 10% tax is levied on
apparel. That means the tax rate is always 10% whether such apparel is imported
manufactured, processed, or traded.
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If a taxpayer sells various goods
and services that are subject to various rates of VAT, they must be sorted by
VAT rates. Otherwise, the highest rate of VAT among which shall apply.
If the rate of VAT in the preferential import tariff
schedule is found not conformable with this Circular, this Circular shall
apply. If different rates of VAT are applied to the same kind of goods that are
imported or manufactured in Vietnam, the local tax authority and customs
authority must send a report to the Ministry of Finance for guidance.
Section 2. TAX CALCULATION
Article
12. Credit-invoice method
1. Credit-invoice
method is applied by the taxpayers that adhere to the accounting and invoicing
practice according to accounting and invoicing laws, including:
a) Any taxpayer that earns at
least 1 billion VND in annual revenue from selling goods and services Credit-invoice,
provided the taxpayer adheres to the
accounting and invoicing practice according to accounting and invoicing laws, except
for business households and businesspeople mentioned in Article 13 of this
Circular;
b) Any taxpayer that
voluntarily applies credit-invoice method, except for the business
households and individuals that pay tax using direct method mentioned in
Article 13 of this Circular;
c) Any foreign entity that
provides goods and services serving petroleum exploration and extraction and
authorizes a Vietnamese party to deduct tax.
2. The
annual revenue mentioned in Point a Clause 1 of this Article is the revenue
from selling taxable goods and services, which is calculated as follows:
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Example 51: Company A is
established in 2011 and still operating in 2013. To determine the tax
accounting method applied in 2104, company A shall calculate its annual revenue
by aggregating the revenue from selling goods and services subject to VAT on
the monthly VAT declarations from November 2012 to the end of October 2013.
If the annual revenue calculated
is 1 billion VND or above, company A may apply credit-invoice method for 02
years (2014 and 2015).
If the annual revenue
calculated is below 1
billion VND, company A must apply direct method according to
Article 13 of this Circular for 02 years (2014 and 2015), unless
company A voluntarily applies credit-invoice method according to Clause 3 of
this Article.
b) If the company has not
operated for 12 months, the annual revenue shall be estimated by aggregating
the revenue from selling goods and services subject to VAT on the monthly VAT
declarations and dividing (:) it by the operational months, and then
multiplying (x) it by 12 months. If the estimated
annual revenue is 1 billion VND or above, the company may
apply credit-invoice method. If the estimated
annual revenue is below 1 billion VND, the company
must apply direct method for 02 years, unless it voluntarily
applies credit-invoice method.
Example 52: Company B is established
and inaugurated from March 2013. To determine the tax accounting method applied
in 2014 and 2015, company B estimates its annual revenue by aggregating the
revenue from selling goods and services subject to VAT on the monthly VAT
declarations of March, April, May, June, July, August, September, October, and
November, dividing (:) it by 9 months, and then multiplying (x) it by 12
months.
If the estimated
annual revenue is 1 billion VND or above, the company may apply
credit-invoice method. If the estimated annual revenue
is below 1 billion VND, company B must apply direct method for 02
years, unless it voluntarily applies credit-invoice method.
c) If the company starts
declaring tax quarterly from July 2013, the annual revenue shall be calculated
by aggregating the total revenue from selling goods and services subject to VAT
on the monthly VAT declarations of October, November, and December in 2012, the
first six months of 2013, and the VAT declaration of Q3 2013. If the annual
revenue calculated is 1 billion VND or above, the company shall apply
credit-invoice method. If the annual revenue is below 1 billion VND,
the company must apply direct method for 02 years, unless it voluntarily
applies credit-invoice method.
d) If the taxpayer suspends their
business for the whole year, the annual revenue is the revenue of the year
preceding the year over which the business is suspended.
d) If the taxpayer suspends
their business for a certain period of time
in the year, the revenue earned during the operational months and quarters
according to Point b of this Clause shall be considered annual revenue.
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3. The
taxpayers that voluntarily apply credit-invoice method include:
a) Any company
or cooperative that earn less than billion VND in annual revenue
from selling goods and services Credit-invoice, and adheres
to the accounting and invoicing practice according to accounting and invoicing
laws.
b) Any new company derived from a
project of investment of a taxpayer that pays VAT using credit-invoice method.
c) Any new company or cooperative
that invest at least 1 billion VND in fixed assets, machinery, and equipment
according to the purchase invoices, including those purchased before the
creation of such company or cooperative (not including passenger cars with
fewer than 9 seats of the taxpayers that are not transport companies, tourism
companies or hotels); foreign entities doing business in Vietnam under
contracts.
d) The business organizations
other than companies and cooperatives that are able to separate input VAT from
output VAT.
The companies and cooperatives
mentioned in Point a of this Clause must send notifications of the application
of credit-invoice method to their supervisory tax authorities by December 20
every year.
The taxpayers
mentioned in Point b and Point c of
this Clause must send notifications of the applied
tax accounting method to their supervisory tax authorities together
with the applications for tax registration.
The taxpayers
mentioned in Point d of this
Clause must send notifications of the applied tax
accounting method to their supervisory tax authorities by
December 20 of the year preceding the year in which the method is changed.
Within 05 working days from the
day on which the notification of the application of credit-invoice method, tax
authority shall notify the taxpayer of their approval for or disapproval of the
application of credit-invoice method.
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a) If the taxpayer engages in
trading, fashioning gold, silver and gemstones, the revenue from such
activities must be separated to directly calculate VAT on value added according
to Article 13 of this Circular.
b) The new companies and
cooperatives that are not fall into the cases in Clause 3 of this Article must
apply direct method according to Article 13 of this Circular.
At the end of the first calendar
year from the establishment, if the company or cooperative earns
at least 1 billion VND in annual revenue and
adheres to the accounting and invoicing practice according to accounting and
invoicing laws, credit-invoice method may be applied. The tax accounting method
shall be changed in accordance with tax laws.
If the company or cooperatives
fails to earn at least 1 billion VND in revenue at the end of the first
calendar year, the direct method is still applied.
Example 53: Company X is
established and inaugurated from April 2014. Company X applies direct method in
the tax periods in 2014. At the end of November 2014, company X estimates
its annual revenue in the year by aggregating the revenue on the VAT
declarations from April to November, dividing it by 8 months, and then
multiplying it by 12 months.
If the estimated revenue is 1
billion VND or above, company X shall switch over to credit-invoice method from
January 01, 2015 and throughout 2015 and 2016. If the estimated revenue is
below 1 billion VND, company X must keep applying direct method throughout 2015
and 2016. The tax accounting method applied by company X in 2017 and 2018
depends on its performance in 2016.
5. VAT payable:
VAT
payable
=
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-
Deductible
output VAT
Where:
a) Output VAT equals the total
VAT on sold goods and services written on the VAT invoices.
The VAT written on a VAT invoice equals
(=) taxable prices of goods and services multiplied by (x) corresponding tax
rates.
If the selling price is
VAT-inclusive, output VAT equals (=) selling price minus (-) taxable price
according to Clause 12 Article 7 of this Circular.
The taxpayer
that is eligible to use credit-invoice method must calculate and
pay VAT on goods and services when they are sold. When issuing a sale invoice,
the taxpayer must clearly write the VAT-exclusive prices, VAT, and total amount
payable by the buyer. If the invoice only has the selling price (where special
invoices are allowed) without specifying the VAT-exclusive price and VAT, the
VAT shall be levied on the selling price.
Example 54: A company sells F6
steels at VAT-exclusive price 11,000,000 VND/tonne;
10% VAT = 1,100,000 VND/tonne. However, the selling price written on some
invoices is 12,100,000 VND/tonne. In this case, VAT will be 1,210,000 VND/tonne
(12,100,000 VND/tonne x 10%) instead of 1,100,000 VND/tonne.
Taxpayers must adhere to
accounting and invoicing practice in accordance with the laws on accounting and
invoicing. In case the tax authority finds an incorrect VAT rate on an invoice
for the sale of goods and services:
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b) Input VAT equals (=) total VAT
on invoice VAT for purchase of goods and services (including fixed assets)
serving the manufacture or sale of taxable goods and services, VAT on receipts
for payment of tax on imported goods or payment of VAT on behalf of a foreign
organization, which does not have a legal status in Vietnam, or a foreigner
doing business in Vietnam or earning income in Vietnam.
If special receipts, on which
selling prices are VAT-inclusive, are permitted, the taxpayer may calculate
VAT-exclusive prices and input VAT according to the VAT-inclusive prices and
the instructions in Clause 12 Article 7 of this Circular.
Deductible input VAT shall be
calculated in accordance with Article 14, Article 15, Article 16, and Article
17 of this Circular.
Example 55: In a
tax period, company A pays 110 million VND inclusive of VAT for deductible
input services that are subject to 10% tax (special receipts bearing
VAT-inclusive prices are used for the services), then deductible input VAT is
calculated as follows:
110
million VND
x 10% =
10 million VND
1
+ 10%
VAT-exclusive price is 100 million VND; VAT is 10 million
VND.
In case the tax authority
finds an incorrect VAT rate on an invoice issued by
the goods buyer:
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In case the tax authority
finds an incorrect VAT rate on an invoice issued by
the goods seller:
If VAT has been paid by the
seller when goods are imported, and the VAT rate on the VAT invoice issued to
consumer is equal to the VAT rate declared when goods are imported and when
goods are sold, but this rate is lower than that prescribed by VAT laws and the
taxpayer is not able to collect additional payment from the consumer, then the
payment collected from the consumer under the VAT invoice is considered
inclusive of VAT at the rate prescribed by VAT laws, which is used to calculate
VAT payable and revenue subject to corporate income tax.
Example 56: In March 2014,
taxpayer A, who is eligible to apply credit-invoice method), imports products
named “CHAIR MM”, and has paid 5% VAT during importation. In May 2014, taxpayer
A sells 01 “CHAIR MM” to buyer B for 100 million VND exclusive of VAT. Because
5% VAT has been paid during importation, the VAT invoice issued by taxpayer A
to buyer B indicates 100 million VND in taxable price, 5% VAT, 5 million VND in
VAT, and 105 million VND in total amount. This amount has been paid off by
buyer B.
In 2015, tax authority finds that
the VAT rate applied by taxpayer A is incorrect (the correct rate is 10%).
Because the transaction between taxpayer A and buyer B has finished, company A
cannot collect any additional payment from buyer B (buyer B refuses to pay any
additional tax). The VAT payable by taxpayer A and the taxable revenue are
determined by the tax authority as follows:
The total payment made by buyer
B, which is 105 million VND, is considered inclusive of 10% VAT. The correct
VAT payable is:
105
million VND
x 10% =
9.545 million VND
1
+ 10%
Additional VAT
payable by taxpayer A:
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Taxable revenue from selling the
“CHAIR MM” to buyer B:
105 million
VND - 9.545 million VND = 95.455 million
VND.
Article
13. Direct method
1. The
direct method is applied to trading, fashioning of gold, silver, and gemstones,
according to which VAT equals (=) value added multiplied by (x) 10%.
Value added of gold, silver, and
gemstones equals (=) their selling price minus (-) their cost price.
Selling prices of gold, silver,
or gemstones are the actual selling prices written on the sale invoices,
inclusive of fashioning price, VAT, and other surcharges to which the seller is
entitled.
Cost prices of gold,
silver, or gemstones are their VAT-inclusive values when they are purchased or imported
for trading or fashioning.
If the value added of gold,
silver, and gemstones in the tax period is negative (< 0), it may be offset
against the positive value added (> 0). In case there is no positive value
added or the positive value added is not sufficient to cancel out the negative
value added, the negative value added shall be transferred to the next tax
period of the year. At the end of the calendar year, any negative value added
that remains must not be transferred to the next year.
2. Cases in
which VAT is calculated by directly multiplying a rate (%) by the revenue
(hereinafter referred to as direct VAT):
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- The
operational companies and cooperatives that earn less than 1 billion VND in
annual revenues, except for those that voluntarily apply credit-invoice method
prescribed in Clause 3 Article 12 of this Circular;
- The new
companies and cooperatives, except for those that voluntarily apply
credit-invoice method prescribed in Clause 3 Article 12 of this Circular;
- Business
households and businesspeople;
- The
foreign entities doing business in Vietnam without following the Law on
Investment; the organizations that fail to adhere to accounting and invoicing
practice, except for those that provide goods and services serving petroleum
exploration and extraction.
- The
business organizations other than companies and cooperatives, except for those
that voluntarily apply credit-invoice method.
b) Direct VAT rates applied to
various business lines:
- From
goods distribution or goods supply: 1%;
- From
services or construction exclusive of building materials: 5%;
- Manufacturing,
transport, services associated with goods, construction inclusive of building
materials: 3%;
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c) The taxable revenue is the
total revenue from selling goods and services, which is written on the sale
invoice for taxable goods and services, inclusive of the surcharges to which
the seller is entitled.
The rates above are not applied
to the revenue from selling the goods and services that are not subject to VAT
and revenue from exported goods and services.
Example 57: Company A is a company
that declares and pays VAT using direct method. Company A earns revenue from
selling computer software and consultancy on company establishment. Company A
shall not pay direct VAT from selling computer software, which is not subject
to VAT), and must pay direct VAT at 5% of the revenue from consultancy on
company establishment.
If the taxpayer engages in
various lines of business to which different rates are applied, they must be
sorted by VAT rate. Otherwise, the highest rate among which shall apply.
3. The
direct VAT payable by a business household or businessperson that pays VAT at a
flat rate depends on the declaration made by the taxpayer, the data of the tax
authority, the result of the investigation into the taxpayer’s actual revenue,
and opinions of the local Tax Advisory Council.
If the taxpayer that pays tax at
a flat rate engages in multiple lines of business, the rate on the primary
business line shall be applied.
4. The list
of direct VAT rates mentioned in Clause 2 and Clause 3 is enclosed herewith.
Chapter
III
TAX DEDUCTION AND TAX REFUND
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Article
14. Rules for deducting input VAT
1. Input VAT
on goods and services serving the manufacture or sale of goods/services subject
to VAT shall be deducted in full, including non-refundable input VAT on damaged
goods.
Non-refundable input VAT on
damage goods may be deducted in an event of natural disaster, blaze, damage
that is not covered by insurance, degraded or expired goods that must be
destroyed. The taxpayer must present sufficient documents to prove the damage
not covered by insurance.
If goods diminish naturally
during transport or pumping (such as oil, gasoline, etc.), input VAT on the
lost amount of goods within the tolerance may be deducted. Input VAT on the
lost amount beyond the tolerance must not be deducted
Input VAT on goods and services
forming fixed assets such as canteen, recreation room, locker room, parking
lot, restroom, water tank serving workers at the workplace, housing and medical
facility for workers in industrial parks shall be deducted in full.
VAT on the rents for the houses
for workers in the industrial park paid by the taxpayer may be deducted if the
houses are conformable with laws on houses for workers in industrial parks in
terms of design standards and rents. If the taxpayer builds or purchases houses
outside the industrial parks serving workers in the industrial park, VAT on
these housed may be deducted in full if they are conformable with the design
standards applied to houses for workers in industrial parks.
When a taxpayer pays foreign
experts for their works in Vietnam or holding managerial positions in Vietnam
under labor contracts signed, the rent for houses for such foreign experts must
not be deducted.
If the foreign experts are still
employees of an overseas company, receive wages and benefits from the overseas
company over the period of work in Vietnam, and the overseas company and the
taxpayer in Vietnam is signs a contract specifying that the taxpayer in Vietnam
must cover the costs of accommodation for the foreign experts while they are
working in Vietnam, then the VAT on the accommodation costs paid by the
taxpayer shall be deducted.
2. When
goods and services (including fixed assets) are purchased to serve the
manufacture or sale of both the goods/services that are subject
to VAT and goods/services that are not subject to VAT, only VAT on the
goods and services serving the manufacture or sale of the goods/services
subject to VAT shall be deducted. The taxpayer must separate the deductible
input VAT from non-deductible one. Otherwise, input VAT shall be deducted
according to the ratio of taxable revenue to the total revenue from selling
goods and services.
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3. In the
following cases, input VAT on fixed assets, machinery, equipment, including
input VAT on the lease on such fixed assets, machinery, equipment, and input
VAT on related services such as warranty or repairs shall be aggregated with
cost prices of fixed assets or deductible expenses (according to the Law on
Corporate income tax and its guiding documents) instead of being deducted:
fixed assets serving the manufacture of weapons and vehicles serving national
defense and security; fixed assets, machinery and equipment of credit
institutions, reinsurers, life insurers, securities companies, medical
facilities, training institutions, commercial aircraft, and cruisers that are
not used for cargo transport, passenger transport, tourism or hotel services.
If the value of a fixed asset
that is a car smaller than 9-seater cars (except for those that are used for
cargo transport, passenger transport, tourism or hotel services) exceeds 1.6
billion VND (VAT-exclusive), the VAT on the proportion beyond 1.6 billion VND
must not be deducted.
4. Some
cases of VAT deduction:
a) If the taxpayer has a closed
production line where the products not subject to VAT are used for producing goods
subject to VAT, input VAT shall be deducted in full.
Example 58: Company X invests in
raw materials and a factory to fillet fish and produce frozen shrimps. Company
X has a closed production line, including the breeding line, ponds, fences,
irrigation system, boats, and other raw materials such as feeds, veterinary
medicines, and the processing line. Company X may deduct input VAT on fixed
assets and purchases that are not fixed assets during the manufacture and
processing.
Example 59: Company Y
invest in raw materials and a factory to produce dairy (sterilized milk,
yogurt, cheese, etc.) Company Y has a closed production line, including the
breeding line, farms, stables, fences, milking devices, sanitation system, raw
materials such as feeds and veterinary medicine, and the processing line. Company
Y may deduct input VAT on fixed assets and
purchases that are not fixed assets during the manufacture and processing.
b) If the taxpayer has a project
of investment that is divided into multiple stages, has a closed production
line, and uses non-taxable products to manufacture taxable goods, but
non-taxable goods and services are provided during infrastructural development
stage, the input VAT incurred during the infrastructural development stage in
fixed assets may be deducted in full. The taxpayer must separate the VAT on the
assets other than those serving manufacture and trading of non-taxable goods
and services to deduct tax according to the ratio of taxable revenue to total
revenue from selling goods and services.
If the taxpayer makes a
commitment to keep producing taxable products, VAT may be deducted during
infrastructural development stage. If the input VAT incurred during the
infrastructural development stage has been declared, deducted, and refund, but
then found to be not eligible for deduction or refund, the taxpayer must make
an adjustment and pay tax that has been deducted or refunded. If the taxpayer
fails to make the adjustment, tax authority shall collect the tax arrears and
impose penalties. The taxpayer is totally responsible for the report and
explanation for the tax deduction and tax refund, which are submitted to tax
authority.
If the taxpayer sells unprocessed
or preprocessed agricultural, forestry, and aquaculture products that are not subject
to VAT, the VAT on purchases may also be deducted according to the ratio of
revenue from selling taxable goods and services to the total revenue.
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If company X sells all of the
rubber latex, which is not subject to VAT, input tax shall not be deducted.
If company X uses part of the
rubber latex for manufacturing taxable products, and sell the rest, input VAT
shall be deducted as follows:
- Input VAT
on fixed assets (rubber tree plantation, processing factory, etc.) may be
deducted in full (including VAT incurred during infrastructural development
stage).
- Input VAT
on goods and services shall be deducted according to the ratio of revenue from
selling taxable goods and services to the total revenue.
c) The taxpayers (including the
new business establishments) that provide both goods and services subject to
VAT and goods and services that are not subject to VAT may provisionally deduct
input VAT on fixed assets incurred during infrastructural development stage according
to the ratio of revenue from selling goods and services subject
to VAT to the total revenue. The provisionally deducted VAT
shall be adjusted to the ratio of revenue from
selling goods and services subject to VAT to the
total revenue over three years from the first year in which revenue is earned.
Example 61: Z is a new company
derived from a project of investment in transport. According to the business
plan, company Z is supposed to earn revenue from public passenger transport,
advertising, vehicle maintenance and repair. The revenue from passenger transport
by bus accounts for 30% of the total revenue. The infrastructural development
stage lasts for 02 years (from June 2014 to May 2016), including buying
vehicles, building bus stops and infrastructure. During this period, 70% of the
input VAT on fixed assets and purchases serving the creation of the company is
provisionally deducted and refunded (VAT on the vehicles used as public buses
is not deducted). Company Z is inaugurated and starts earning revenue from June
2016. Three years later, at the end of May 2019, the revenue from public
passenger transport by bus makes up 35% of total revenue from goods and
services. Company Z shall reduces the deductible VAT by 5% (= 70% - 65%) and
aggregate the arrears with the VAT payable in May 2019. Company shall not incur
any fine or late payment interest.
5. Input VAT
on the goods (whether purchased externally or produced by the taxpayer) used as
gifts, used for sale promotions or advertising serving the manufacture of sale
of taxable goods may be deducted.
6. The VAT
paid under a decision on tax imposition made by a customs authority shall be
deducted in full, unless penalties for tax avoidance are imposed by the customs
authority.
7. Input VAT on goods and services serving the manufacture
or sale of taxable goods and services mentioned in Article 4 of this Circular
must not be deducted, except for the following cases:
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b) Input VAT on goods and
services serving petroleum exploration shall be deducted in full until the
first day of extraction.
8. VAT shall
be declared and deducted in the period during which it is incurred, whether the
products are used or still in storage.
If the taxpayer finds that the
input VAT is incorrectly declared, an adjustment may be made before the tax
authority or a competent authority announces the decision on tax inspection at
the taxpayer’s premises.
9. Input VAT
that is not deductible shall be aggregated with costs to calculate corporate
income tax, or aggregated with costs of fixed assets, except for the VAT on any
purchase that costs 20 million VND or more without receipts for non-cash
payments
10. The
headquarters that do not directly run the business, the administrative units
affiliated to hospitals, medical stations, sanitariums, institutes, schools,
etc. that are not taxpayers must not deduct or claim refund of input VAT on the
purchases serving their operation.
If such units sell taxable goods
and services, VAT on these goods and services shall be separately declared and
paid.
Example 62: Though the headquarter
of company A does not directly run the business and is funded by its
affiliates, it leases out part of its office building. In this case, the
headquarter must separately declare and pay tax on the office lease. Input VAT
on goods and services serving the operation of the headquarter shall not be
deducted or refunded.
11. Input VAT of goods and
services serving provision of goods and services that are
not subject to VAT mentioned in Article 5
of this Circular (except for Clause 2 and Clause 3 of Article 5) may be deducted in
full.
12. When the
taxpayer authorizes another entity to make a purchase, the invoice for which
bears the name of the authorized buyer, input VAT on such purchase may be
deducted in the following cases:
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b) Before a company is
established, its founders authorizes another entity in writing to pay on their
behalf some amounts related to the establishment of the company and purchase
some goods, the company may deduct input VAT according to the invoices bearing
the name of the authorized entity. The invoices of which the value is 20
million VND or more must be paid by bank transfer.
13. When a
non-business entity contributes assets to a limited liability company or a
joint-stock company, the receipt for this contribution is the certificate of
capital contribution and the asset transfer note. If the contributed assets are
brand new, have legitimate invoices, and are accepted by the capital transfer
council, the value of this contribution is the VAT-inclusive value written on
the invoice. The recipient of the contribution may deduct the VAT on the
invoice for the purchase of such assets from the contributor.
14. The
taxpayer that switches over from direct method to credit-invoice method may
start deducting VAT on purchases from the first tax period in which
credit-invoice method is applied.
The taxpayer that switches over
from credit-invoice method to direct method may aggregate the VAT on purchases
that is not completely deducted before switching with deductible expenses when
calculating the income subject to corporate income tax, except for the
refundable VAT on the purchases that were made before switching according to
Article 18 of this Circular and the legislative documents that were effective
before this Circular comes into force.
Example 63: Company A is applying
credit-invoice method in 2014 and 2015. From January 01, 2016, company A is no
longer eligible to apply credit-invoice method. Company A sent a claim for tax
refund the tax authority from November 2014 to the end of October 2015 (when
revenue is calculated to decide the tax accounting method in 2016 and 2017).
The claimed refund is 350 million VND and the input VAT that remains is 50
million VND according to the VAT declaration of November 2015. Company A shall
receive the full refund of 350 million VND. The remaining input VAT of 50
million VND shall be transferred to the tax period of December 2015. If input
VAT on the VAT declaration of December 2016 is not completely deducted, company
A may aggregate it with deductible expenses when calculating the income subject
to corporate income tax.
15. Input VAT must not be
deducted in the following cases:
- The VAT invoice is not
legitimate, such as VAT is not written (except for special invoices on which
selling prices are VAT-inclusive);
- The invoice does not
contain or does not contain the correct name, address or TIN of the seller,
thus rendering the seller unidentifiable;
- The name, address, or
tax code of the buyer on the invoice is incorrect (except for the case in
Clause 12 of this Article);
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- The invoice does not
reflect the actual value of goods and services.
16. Other
cases prescribed by the Ministry of Finance.
Article
15. Compulsory documents for input VAT deduction
1. Legitimate
VAT invoices for purchases or receipts for payment of VAT on imported goods, or
receipts for payment of VAT on behalf of foreign organizations that do not have
Vietnamese legal status and the organizations and individuals, and the
foreigners that do business or earn income in Vietnam.
2. Receipts
for non-cash payments for the purchases (including imported goods) that cost 20
million VND or more inclusive of VAT, except for the purchases that cost below
20 million VND inclusive of VAT.
Receipts
for non-cash payments include bank transfer receipts and other receipts for
non-cash payments prescribed in Clause 3 and Clause 4 of this Article.
3.
Bank transfer receipts are the documents proving the transfer of money
from the buyer’s account to the seller’s account (theses accounts must be
registered or notified to tax authorities)opened at providers of payment
services in legitimate forms such as checks, payment order, collection order,
banking card, credit card, SIM card (digital wallet), and other methods of
payment (even when the buyer transfer money from the buyer’s account to the
seller’s account held by an owner of a private company, or when the buyer
transfer money from the buyer’s account held by an owner of a private company
to the seller’s account if such account has been registered with the tax
authority).
a)
Receipts for cash payment to the seller’s account or the payment receipts that
are not conformable with current law are not sufficient for refund or deduction
of VAT on the purchases that cost 20 million VND or more shall not be deducted
or refund if the.
b) VAT on
any purchase that costs 20 million VND or more (VAT-inclusive) shall not be
deducted if no bank transfer receipt is presented. The taxpayer shall classify
these invoices as non-deductible in the list of invoices and receipts for
purchases.
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Input VAT must not be deducted if bank transfer receipts are not
available when the payment is due according to the contract (or by December 31
if the payment deadline is sooner than December 31); the deduction of VAT on
the goods without bank transfer receipts must be undone. If bank transfer
receipts are obtained after the deduction is undone, the taxpayer may make an
adjustment.
If the taxpayer does not make the reduction by the deadline for
settling deferred payment or by December 31, and is able to present the bank
transfer receipt before the tax authority or a competent authority announces
the decision to carry out an inspection at the taxpayer's premises, the
taxpayer shall face penalties for violations against tax law if the failure to
make the reduction does not lead to an understatement of tax payable or
overstatement of refundable tax. If the failure to make the reduction leads to
an understatement of tax payable or overstatement of refundable tax, the
taxpayer must pay the arrears and face penalties according to the Law on Tax
administration.
In case the taxpayer obtains the
bank transfer receipts after the tax authority announces the decision to carry
out an inspection and makes a decision to refuse the deduction of tax on the
invoices without bank transfer receipts:
- If
reduction has been made before the tax authority carries out the inspection,
the taxpayer may declare additional VAT.
- If reduction is not made
before the tax authority carries out the inspection, the taxpayer may declare
additional VAT.
Example 64:
In 2014, company ANB receives the
following invoices for purchased goods under a deferred payment contracts:
- VAT
invoice of March 2014, which is due on September 20, 2014.
- VAT invoice of April 2014,
which is due on October 20, 2014.
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- VAT invoice of June 2014,
which is due on December 20, 2014.
Company ANB has deducted VAT when
such VAT invoices are received. If company ANB has not obtained bank transfer
receipts when the payments are due under the contracts, it may choose between
making reduction in each invoice. If company ANB fails to obtain bank transfer
receipts by December 31, 2014, it must make reduction in those four invoices in
the tax period of December 2014 in accordance with tax laws.
Example 65:
In February and March 2014,
company Super received VAT invoices that are due on October 31, 2014 under a
deferred payment contract. Pursuant to the VAT invoices provided by the seller,
company Super deducted VAT on the tax declarations of February and March 2014.
Company Super fails to settle the payment when it is due (October 31, 2014)
because of financial difficulties. In October 2014, company Super reduces the
amount of deducted VAT and increases the costs accordingly.
In April 2015, tax authority
makes a decision to carry out an inspection at company Super. The inspectorate
recognizes a reduction in deductible tax, which is made by company Super, on
the VAT invoices of February and March 2014 that are due on October 31, 2014.
In March 2015, tax authority
makes a decision to collect tax arrears, which does not mention the VAT on
the VAT invoices of February and March 2014 because
the reduction has been recognized by the inspectorate.
In December 2015, company Super
obtains bank transfer receipts for the VAT invoices of February and March 2014,
which are due on October 31, 2014). In this case company Super may declares
additional input VAT and reduce the corresponding costs.
Example 66:
In March and
April 2014, company YKK receives VAT invoices that are due
on September 30, 2014.
According to the VAT invoices provided by the seller, company YKK deducted
VAT on the tax declarations of March and 2014.
Company YKK fails to settle the payment when it is due (September
30, 2014) because of fianncial difficulty. On
December 31, 2014, company YKK fails to reduce the amount of deducted VAT
without bank transfer receipts.
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In May 2015,
tax authority makes a decision collect tax arrears from company YKK.
In October 2015, company YKK
obtains bank transfer receipts for the VAT invoices of March 2014, which are
due in September 2014, company YKK may declares additional VAT because bank
transfer receipts are obtained within 06 months from the day on which the tax
authority makes the decision to collect tax arrears.
In December
2015, company YKK obtains bank transfer receipts for the VAT invoices
of April 2014, which are due in September 30, 2014,
company YKK may not declares additional VAT because the bank
transfer receipts are obtained after 06 months from
the day on which the tax authority makes the decision to collect tax arrears.
Example 67:
In September 2014,
Department of Taxation of province B issues a decision to collect
460 million VND in refunded VAT, which was the VAT on the purchases that exceed
20 million VND that was deducted, because no bank transfer receipts for
corresponding invoices are presented by the payment deadline according to the
contract. Company PNG has paid this 46 million VND in full.
In
October 2014, company PNG obtains bank transfer receipts for the 460 million
VND that has been recollected by tax authority, then it may makes an adjustment
in October 2014.
4.
Other cases in which non-cash payments are used for deducting
input VAT:
a) If goods and services are
purchased by offsetting their value against the value of sold goods and
services, or by lending goods under contracts, a certification of this kind of
transaction and data comparison record made by both parties is compulsory. If
the payment is offset against third party’s debt, a debt offsetting record made
by all three parties is compulsory.
b) If the contract allows goods
and services to be purchased on credit in the forms of loans or debt offsetting
via a third party, it is required to have the loan contract and the receipts
for transfer of money from the creditor’s account to the debtor’s account, even
when the value of purchased goods and services is offset against the amount
paid by the buyer on behalf of the seller or the amount provided for the buyer
by the seller.
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After the payment is made this
way, if the remaining value that is paid in cash is 20 million VND or more, tax
shall only be deducted if bank transfer receipts are provided. When declaring
input VAT invoices, the taxpayer must specify the method of payment stipulated
in the contract on the list of invoices and receipts for purchases.
d) Payment for purchases is wired
to a third party’s account at a State Treasury, which is opened to enforce
money collection, input VAT may be deducted.
Example 68:
Company A
buys goods of company B and still owes money to company B. However, company B
still owes tax to government budget. According to the Law on Tax
administration, when the tax authority collects company B’s money and assets
that is held by company A to enforce tax decision, the money transferred by
company A to the account at the State Treasury is considered bank transfer, and
the corresponding VAT on purchased goods may be deducted.
Example 69:
Company C signs a business
contract to provide goods with company D, and company D still owes company C
for the goods.
A competent authority decides to
collect the money owed to company C by company D and transfer it to an account
at a State Treasury to resolve disputes over sale contracts between company C
and its partners.
When company D transfers money
the account at the State Treasury (this transfer is not stipulated in the contract
between company C and company D), the transfer is also considered bank transfer
and the corresponding VAT on purchased goods may be deducted.
5. When the
total value of multiple purchases, each of which costs below 20 million VND,
that are made in the same day is 20 million VND or more, tax shall only be
deducted if bank transfer receipts are presented. The supplier is a taxpayer
that has TIN and pay VAT directly.
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VAT on exported goods and
services (except for the cases in Article 17 of this Circular) shall only be
deducted and refunded when the documents mentioned in Clause 2 Article 9 and
Clause 1 Article 15 of this Circular are presented. In particular:
1. The
contract to sell, process goods, or provide services for a foreign entity. If
the exported is entrusted, the compulsory documents are the entrustment
contract and the note of entrustment contract finalization or a debt comparison
note between the entrusting party and the entrusted party, specifying the
quantity, categories, value of exported goods, the export contract number; the
date and amount of money on the bank transfer receipt for the payment between
the foreign party and the entrusted party, the date and amount of money on the
receipt for payment to the entrusting party by the entrusted party,
number and date of the customs declaration of exported goods made by the
entrusted party.
2. If
customs procedure has been completed in accordance with instructions of the
Ministry of Finance: the customs declaration.
If the taxpayer exports software
programs in the form of physical packages, the customs declaration must be made
similarly to ordinary goods in order to deduct input VAT.
The customs declaration is not
needed in the following cases:
- The
software and export exported via electronic means. The taxpayer must follow the
procedure for certifying that the buyer has received the exported services or
software via electronic means in accordance with the laws on electronic
commerce.
- The
construction or installation executed overseas or in free trade zones.
- Supply of
electricity, water, stationery, and goods serving every day life of export
processing company, including food and consumables (including personal
protective equipment).
3. Payment
for exported goods and services must be made by bank transfer.
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b) The cases below are also
considered bank transfer:
b.1) When the
payment for exported goods and services is offset against a debt to a foreign
entity, the following documents are compulsory:
- A loan
contract (if the loan is due within 01 year); or certification of loan issued
by the State bank of Vietnam (if the loan is due after 01 year).
- Receipt
of bank transfer from abroad to Vietnam.
The export contract must allow
the payment to be offset against the debt to a
foreign entity.
- A
certification of the debt offsetting made by the foreign entity.
- After
offsetting, the remaining amount must be paid by bank transfer. The bank
transfer receipts must be conformable with this Point.
b.2) When the payment for
exported goods and services is offset against a debt to a foreign entity, the
following documents are compulsory:
- Capital
contribution contract.
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- If the capital
contribution is smaller than the revenue from exported goods, the difference
must be paid by bank transfer in accordance with this Point.
b.3) If the
foreign party authorizes a third party, which is a foreign entity, to makes the
payment, such authorization must be agreed in the export contract (or the
contract appendix or amendment).
b.4) It is
considered a bank transfer if the foreign party requests a third party that is
an organization in Vietnam to offset the payment against a debt to the foreign
party by paying the amount payable to the exporter by bank transfer (provided
the offsetting is agreed in the export contract, contract appendix or
amendment); the bank of the exporter issues a credit note to certify the amount
transferred from the third party’s account; and the exporter presents a debt
comparison certified by the foreign party and the third party.
b.5) If the
foreign party (importer) authorizes an overseas entity (third party) to make
the payment, then the third party requests an organization in Vietnam (fourth
party) to offset the debt to the third party by paying the amount payable to
the Vietnamese exporter by bank transfer, the following documents are
compulsory:
- The
export contract (contract appendix or amendment) that contains the agreement on
debt offsetting.
- The
credit note issued by the bank, which acts as a payment receipt for the amount
received by the Vietnamese exporter from the fourth party’s account.
- A debt
comparison certified by relevant parties (between the exporter and importer,
between the third party and the fourth party).
b.6) If the foreign party authorizes its
representative office in Vietnam to transfer the payment to the exporter’s
account, such authorization is agreed in the export contract, contract appendix,
or admendments (if any).
b.7) If the
foreign party (not applied to individuals) transfers the payment from a deposit
account opened by the foreign party at a credit institution in Vietnam, this
method of payment must be agreed in the export contract, the
contract appendix or its amendment. The payment receipt is the credit
note issued by the exporter’s bank about the amount
received from the foreign buyer’s account who signs the contract.
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When checking the deduction and
refund of tax on exported goods that are paid for via the bank account, the tax
authority must cooperate with the credit institution where the account is
opened to ensure that the payment and transfer is made properly and in
accordance with law.
b.8) In case
the foreign party makes the payment by bank transfer but the amount on the
receipt does not match the amount payable under the contract:
- If the
amount on the bank transfer receipt is smaller than the amount payable under
the contract, the taxpayer must provide explanation such as transferring fee,
price reduction due to insufficient quality or quantity (a written agreement
between the buyer and the seller must be made in this case), etc.;
- If the amount on the
bank transfer receipt is larger than the amount payable under the contract,
the taxpayer must provide explanation such as payment for multiple
contracts, advance payment, etc.
The taxpayer is responsible for
the explanation provided and the amendments (if any).
b.9) In case
the foreign party makes the payment by bank transfer but name of
the bank on the bank transfer receipt does not match that in the contract, it
shall be considered legitimate if its contents indicate the names of the payer,
the recipient, the number of the export contract, the amount payable that are
consist with the concluded export contract.
b.10) The
taxpayer exports goods and services to a foreign party (second party), imports
goods and services from another foreign party or buys goods from an entity in
Vietnam (third party). If the taxpayer reaches an agreement with the second
party and third party that the second party will pay the third party by bank
transfer the amount the taxpayer is supposed to pay to the third party , this
agreement must be specified in the export contract, import contract, or sale
contract (or its appendix or amendment). The taxpayer must present the debt
comparison certified by relevant parties (between the taxpayer and the second
party, between the taxpayer and the third party).
b.11) In case
the foreign party refuses the exported goods for legitimate reasons, and the
taxpayer finds another buyer in the same country, the application for tax
refund consists of every export document related to the export contract with
the initial buyer (contract, customs declaration, invoices), a written
explanation for the difference in the buyer’s name, and every export document
related to the new buyer (contract, invoices, bank transfer receipt, and other
necessary documents).
c) Other cases of payment for
exported goods and services prescribed by the government:
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c.2) When
goods are exported to be sold at a fair or exhibition overseas, and the revenue
is remitted to Vietnam in foreign currency, the taxpayer must declares the
revenue in foreign currency collected from selling goods overseas and the
receipts for remittance to a bank in Vietnam.
c.3) When
goods or services are exported to repay government debt, it is required to have
a certification by Vietcombank that the exported goods has been accepted by the
foreign party as repayment, or that the dossier has been sent to the foreign
party. Payment receipts must comply with instructions of the Ministry of
Finance.
c.4) Exported
goods/services shall be paid in kind when the export is paid by offsetting the
value of exported goods/services or payment for processing against the value of
goods/services purchased from the foreign party.
In this case, the following
documents are compulsory:
- A export
contract that contains the agreement on payment in kind.
- A
contract to buy goods/services from the foreign party.
- A customs
declaration of imported goods being offset against exported goods/services.
- A certification
of the value of exported goods/services being offset against the value of
imported goods/services.
- After
offsetting, the difference must be paid by bank transfer. Bank transfer
receipts must comply with this Clause.
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c.6) Some
cases of goods and services using other methods of payments prescribed by
relevant laws.
d) In the following cases, tax
shall be deducted and refunded without bank transfer receipts:
d.1) If the
foreign party defaults on the payment, the exporter must make a written
explanation and use one of the following documents as a substitute for the bank
transfer receipt:
- A customs
declaration of goods imported from Vietnam, which have been registered with the
customs authority of the importing country (01 copy); or
- A
petition sent to a court or competent authority of the buyer’s home country
enclosed with a notification or certification of the receipt of this petition
by the court or the competent authority (01 copy); or
- A court’s
ruling that the taxpayer wins the case (01 copy); or
- Papers of
foreign competent authorities certifying or notifying that the foreign party
has gone bankrupt or insolvent (01 copy).
d.2) If
exported goods must be destroyed due to their inferior quality, the exporter
must submit a written explanation and may use the destruction record (or a
paper certifying the destruction) issued by the agency in charge of the
destruction (01 copy) enclosed with a bank transfer receipt for the destruction
cost payable by the exporter, or enclosed with the paper proving that the
destruction cost is covered by the buyer or a third party (01 copy).
If the importer is follows the
procedure for goods destruction overseas, the destruction record (or a paper
certifying the destruction) shall bear the importer's name.
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- A
certification by a competent authority that the damage is incurred beyond
Vietnam’s boundary (01 copy); or
- A record
certifying that goods is damage in transit beyond Vietnam’s boundary (01 copy).
If the exporter has received a
compensation for the damaged goods, a bank transfer receipt for the
compensation must be enclosed (01 copy).
Copies of the papers mentioned in Points d.1, d.2 and d.3 of this Clause must be authenticated by the
exporter. 01 notarized English translation must be enclosed if the language of
the substitute for the bank transfer receipt is not English. The electronic
documents must be printed.
The exporter is responsible for the accuracy of the substitutes for the wire transfer receipt mentioned above.
4. VAT
invoices or export invoices or invoices for processing payment.
Article
17. Conditions for deduction and refund of input VAT in some cases of deemed
export
1. Compulsory
documents for forwarded processed goods defined by the laws on international
trade and export processing:
a) Export processing contract and
its appendices (if any), specifying the recipient of goods in Vietnam.
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c) A forwarding note certified by
the sender, the recipient, and the customs authority that monitors the
processing contract.
d) Payment for processed goods must be made by bank transfer in
accordance with Article 16 of this Circular.
The procedure for forwarding
processed products and forwarding note must comply with instructions of the
General Department of Customs.
Example 70: Company A signs a
contract to process 200,000 pairs of soles. The payment for processing is 800
million VND. The contract specifies that soles will be sent to company B in
Vietnam to produce complete shoes.
When sending the soles to company
B, company A must specify the quantity, category, and specifications of the
products. The 800 million VND in revenue from processing the soles is eligible
for 0% VAT.
2. Compulsory documents for domestic exports:
a) A sale contract or a processing
contract requiring goods to be delivered to a recipient in Vietnam;
b) A
customs declaration of domestic exports has gone through customs
procedure;
c) A VAT invoice or export invoice specifying the buyer’s name,
recipient, and delivery address in Vietnam.
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dd) The
domestic exports of a foreign-invested company must be conformable with the
investment license.
3. When goods
and supplies are exported by a Vietnamese company to execute a construction
overseas, the Vietnamese company must provide the following documents to deduct
or receive VAT refund:
a) The customs declaration in
accordance with Clause 2 Article 16 of this Circular.
b) The exported goods must be consistent with the manifest
of exported goods serving the execution of overseas construction, which is
approved by the Director of the Vietnamese company.
c) An export entrustment contract
(if the export is entrusted).
4. When goods and supplies are sold by one Vietnamese company to another to execute a construction overseas and are received overseas, the Vietnamese company must provide the following
documents to deduct or receive refund of VAT on exported goods:
a) The customs declaration in accordance with Clause 2
Article 16 of this Circular.
b) The exported goods must be consistent with the manifest
of exported goods serving the execution of overseas construction, which is
approved by the Director of the Vietnamese company.
c) A sale contract between two Vietnamese companies
specifying the delivery terms, the quantity, category and value of goods.
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dd) Bank transfer receipts.
e) VAT invoices for the goods.
If the holder of exported goods
or goods deemed exports according to Article 16 and Article 17 of this Circular
has obtained a certification from the customs authority but does not have one
of the other documents, output VAT shall not be incurred but input VAT shall
not be deducted. If any of the compulsory documents for forwarded processed
goods and domestic exports is missing, VAT shall be paid as if they are sold
domestically. If the regulations on bank transfer are not complied with or the
payments are not considered bank transfer, the taxpayer shall not be eligible
for 0% VAT, shall not incur output VAT, but must not deduct input VAT.
Section 2. TAX REFUND
Article 18. Cases of VAT refund
1.
If input VAT is not completely deducted in the month (if tax is
declared monthly) or in the quarter (if tax is declared quarterly), the
taxpayer that pays VAT using credit-invoice method may deduct it from the tax
incurred in the next period. If input VAT is not completely deducted after 12
months or 4 quarters from the first month or quarter input VAT is incurred, the
taxpayer shall receive a refund.
Example
71: Company A declares VAT monthly as follows:
Unit:
million VND
Tax
period
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Deductible
VAT in the period
Output
VAT on goods and services sold in the period
VAT
incurred in the period
VAT
payable or transferred to the next period
(1)
(2)
(3)
(4)
(5)=(4)-(3)
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April
2014
0
350
360
10
10
May
2014
0
500
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ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
-400
- 400
June
2014
400
300
350
50
- 350
July
2014
...
...
...
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
250
260
10
- 340
August
2014
340
310
300
-10
...
...
...
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
September
2014
350
300
350
50
-300
October
2014
300
250
...
...
...
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
80
-220
November
2014
220
300
350
50
-170
December
2014
...
...
...
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
290
350
60
-110
January
2015
110
360
350
-10
...
...
...
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
February
2015
120
350
310
-40
-160
March 2015
160
270
...
...
...
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
50
-110
April 2015
110
400
320
-80
-190
Accordingly, company A has not completely
deduct input VAT after 12 months (from May 2014 to April 2015) Company A shall
receive up to 190 million VND in VAT refund.
...
...
...
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
Unit:
million VND
Tax
period (1)
Remaining
input VAT transferred from previous period (2)
Deductible
VAT in the period (3)
Output
VAT on goods and services sold in the period (4)
VAT
incurred in the period (5)
(5)
= (4) - (3)
VAT
payable or transferred to the next period (6)
(6)
= (5) - (2)
...
...
...
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
0
300
280
-20
-20
February
2014
20
320
310
...
...
...
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
-30
March
2014
30
280
260
-20
-50
April
2014
50
...
...
...
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
410
60
10
May
2014
0
500
100
-400
- 400
...
...
...
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
400
300
350
50
- 350
July
2014
350
250
260
...
...
...
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
- 340
August
2014
340
310
300
-10
- 350
September
2014
350
...
...
...
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
350
50
-300
October
2014
300
250
330
80
-220
...
...
...
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
220
300
350
50
-170
December
2014
170
290
350
...
...
...
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
-110
January
2015
110
360
350
-10
-120
February
2015
120
...
...
...
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
310
-40
-160
March 2015
160
270
320
50
-110
...
...
...
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
110
390
320
-70
-180
Accordingly, input VAT is not
completely deducted in January 2014, February 2014, and March 2014. The
remaining VAT shall be transferred to April 2014. In April 2014, Company
B incurs 10 million VND in tax payable. VAT is not completely
deducted in May 2015. Input VAT incurred by company B is not completely After
12 months from May 2014 to April 2015, thus company B shall receive up to 180
million VND in VAT refund.
Example 73: Company C
declares VAT quarterly as follows:
Unit:
million VND
Tax
period (1)
...
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
Deductible
VAT in the period (3)
Output
VAT on goods and services sold in the period (4)
VAT
incurred in the period (5)
(5)
= (4) - (3)
VAT
payable or transferred to the next period (6)
(6)
= (5) - (2)
Q1 2014
0
70
...
...
...
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
2
2
Q2
2014
0
100
20
-80
- 80
Q3
2014
...
...
...
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
60
70
10
- 70
Q4
2014
70
50
52
2
...
...
...
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
Q1
2015
68
62
60
-2
- 70
Accordingly, company C
has not completely deduct input VAT after 04 quarters from the first quarter
VAT is incurred (from Q2 2014 to Q1 2015). Company C shall receive up to 70 million VND in VAT refund.
2. The new
business establishment that is derived from a registered project of investment
and pays VAT using credit-invoice method, or a petroleum exploration project
has not been in operation, VAT on goods and services used as investment shall
be refunded year by year if the investment period is 01 year (12 months) or
longer.
VAT shall be refunded if the
accrued VAT on goods and services purchased as investment is 300 million VND or
more.
...
...
...
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
a) When a taxpayer using
credit-invoice method has a new project (except for housing for sale) in the
same province, which has not been in operation, the taxpayer shall declare tax
on this project separately and offset the input VAT on the project against the
VAT on the taxpayer’s current business. The maximum VAT on the project that may
be offset is equal to the VAT payable on the taxpayer’s current business in the
same current period.
If the remaining input VAT of the
new project after deduction is 300 million VND or more, it shall be refunded.
After deduction,
if the remaining VAT on the project is below 300
million VND, it shall be aggregated with the input VAT on the project in the next period.
During the period, if input VAT
on the taxpayer’s business is not completely deducted and the taxpayer incurs
input VAT on the new project, the taxpayer shall receive a refund in accordance
with Clause 1 and Clause 3 of this Article.
Example 74: Company A has a
headquarter in Hanoi. In March 2014, company A has a new project in Hanoi which
has not been in operation. Thus, company A must declare input VAT on this
project separately. In April 2014, input VAT on the project of investment is
500 million VND; VAT on company A’s current business is 900 million VND.
Company A shall deduct 500 million VND in input VAT on
the project of investment from the VAT on
company A’s current business (900 million VND). Thus,
the remaining VAT payable by company A in April 2014 is 400 million VND.
Example 74: Company B has
a headquarter in Hai Phong. In March 2014. company B has
a new project in Hai Phong, which has not been in operation. Thus,
company B must declare input VAT on this project separately. In April 2014,
input VAT on the project of investment is 500 million VND; VAT on company B’s
current business is 200 million VND. Company B shall deduct 200
million VND in input VAT on the project of investment from
the VAT on company B’s current business (200
million VND). Accordingly, 300 million VND in input VAT on the new project still
remains in April 2014 after deduction. Company B may claim a refund of this
amount.
Example 76:
Company C has a headquarter in Ho Chi Minh City.
In March 2014. company C has a new project in Ho Chi
Minh City, which has not been in operation. Thus,
company C must declare input VAT on this project separately. In April 2014,
input VAT on the project of investment is 500 million VND; VAT on company C’s
current business is 300 million VND. Company C shall deduct
300 million VND in input VAT on the project of investment from
the VAT on company B’s current business (300 million VND). Accordingly, 200
million VND in input VAT on the new project still remains in April
2014 after deduction. In this case, this amount of VAT
shall not be refund. Instead, company C shall aggregate 200 million VND with
the input VAT on the project in May 2014.
Example 77:
Company D has a headquarter in Da Nang City. In
March 2014. company C has a new project in Da Nang City, which
has not been in operation. Thus, company D
must declare input VAT on this project separately. In April 2014, input VAT on
the project is 500 million VND; 100 million VND in input VAT on the
company D’s current business still remains after deduction. Thus, in April
2014, input VAT on the project (500 million VND) may be
refunded. The input VAT on the company D’s current business that still
remains after deduction (100 million VND) may be
refunded in accordance with Clause 1 of this Article.
b) When a
taxpayer using credit-invoice method has a new
project (except for housing for sale) in another province that has
not been in operation. This project has not been inaugurated and registered. The
taxpayer shall make a separate declaration of tax on the project, and deduct
input VAT on the project from the VAT on the taxpayer’s current business. The
maximum VAT on the project that may be deducted is equal to the VAT payable on
the taxpayer’s current business in the same current period.
...
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ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
After deduction,
if the remaining VAT on the project is below 300 million VND, it shall be aggregated
with the input VAT on the project in the next period.
During the period, if
input VAT on the taxpayer’s business is not completely deducted and the
taxpayer incurs input VAT on the new project, the taxpayer shall receive a
refund in accordance with Clause 1 and Clause 3 of this Article.
If the project is of national
importance, the investment policies and standards of which are decided by the
National Assembly, the taxpayer must follow instructions of the Ministry of
Finance instead of transferring to the next period.
If the taxpayer decides to
establish project management boards or branches in the other provinces to
manage the projects on behalf of the taxpayer, the project management boards or
branches must submit separate tax declarations and applications for tax refund
to their local tax authority, provided they have their own seals, keep their
own records according to accounting laws, and have open accounts at banks, have
applied for tax registration and obtained TINs. When the project, from which
the new company derives, is completed and the procedure for business
registration and tax registration is completed, the taxpayer who is the
investor must aggregate the VAT incurred, the VAT refunded and not refunded,
then request the new company to declare tax, pay tax, and claim refund with its
supervisory tax authority.
The project to which VAT is
refunded according to Clause 2 and Clause 3 of this Article is a project
approved by a competent authority in accordance with investment laws. If
the project is not approved according to investment laws, it is required to
have an investment plan approved by a competent person.
Example 78: Company A has a
headquarter in Hanoi. In March 2014, company A has a new project in Hung Yen,
which has not been in operation and registered. Company A declares input VAT on
this project in Hanoi using the VAT declaration form for projects of
investment. In April 2014, input VAT on the project is 500 million VND; VAT payable on
company A’s current business is 900 million VND. Company A shall deduct
500 million VND in VAT on the project from the VAT
on company A’s current business (900 million VND). Thus, the remaining VAT
payable by company A in April 2014 is 400 million VND.
Example 79:
Company B has a headquarter in Hanoi. In March 2014, company B has a
new project in Thai Binh, which has not been in operation and
registered. Company B declares input VAT on this project in Hai Phong
using the VAT declaration form for projects of investment. In April 2014, input
VAT on the project is 500 million VND; VAT payable on company B’s
current business is 200 million VND. Company B shall deduct
200 million VND in input VAT on the project from the VAT payable on
the current business (200 million VND). Accordingly, in April
2014, 300 million VND in input VAT on the new project still remains
after deduction. Company B may claim a refund of this
amount.
Example 80:
Company C has a headquarter in Ho Chi Minh City.
In March 2014, company C has a new project in Dong Nai,
which has not been in operation and registered. Company C
declares input VAT on this project in Ho Chi Minh City
using the VAT declaration form for projects of investment. In April 2014, input
VAT on the project is 500 million VND; VAT payable on company C’s
current business is 300 million VND. Company C shall deduct
300 million VND in input VAT on the project from the VAT
on the current business (300 million VND). Accordingly, in April
2014, 200 million VND in input VAT on the new project still remains after
deduction. In this case, this amount of VAT shall not
be refund. Instead, company C shall aggregate this 200
million VND with the input VAT on the project in May 2014.
Example 81:
Company D has a headquarter in Da Nang City. In
March 2014, company D has a new project in Quang Nam, which
has not been in operation and registered. Company D
declares input VAT on this project in Da Nang City
using the VAT declaration form for projects of investment. In April 2014, input
VAT on the project is 500 million VND; 100 million VND in VAT on the company
D’s current business still remains after deduction. Thus,
in April 2014, input VAT on the project (500 million VND) may be refunded. The
input VAT on the company D’s current business that still remains after deduction
(100 million VND) may be refunded in accordance with Clause 1 of this Article.
...
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
In the month or quarter, the taxpayer may receive a
refund of VAT on exported goods/services if the input VAT that remains after
being offset against VAT on goods/services sold domestically is 300 million VND
or above.
Refundable VAT is calculated as follows:
Input
VAT that remains after deduction in the tax period
=
Output
VAT on goods and services sold domestically
_
Total
input VAT deducted in the tax period (including input VAT incurred in the tax
period and the input VAT transferred from the previous tax period.
Input VAT on
exported goods/services
...
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
Input
VAT that remains after deduction in the tax period
x
Total
revenue from export in the tax period
x 100%
Total
revenue from selling goods/services in the period (including revenue from
export)
If the taxpayer purchases goods to export, refundable input VAT on
exported goods is calculated as follows:
Input
VAT on exported goods/services
=
...
...
...
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
-
Input
VAT on unsold goods in the tax period
x
Total
revenue from export in the tax period
x 100%
Total
revenue from selling goods/services in the period (including revenue from
export)
If input VAT on exported
goods/services that remains after deduction is below 300 million VND, the taxpayer
must transfer it to the next tax period instead of claiming a refund. If input
VAT on exported goods/services that remains after deduction is 300 million VND
or above, the taxpayer may claim a refund.
Example 82:
...
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
- VAT
transferred from the previous period: 0.15 billion VND.
- Input VAT (on goods
and services serving export and domestic business) incurred in the month: 4.8
billion VND.
- Total
revenue is 21.6 billion VND, including 13.2 billion VND in revenue from export,
and 8.4 billion VND in revenue from domestic sale.
Ratio of revenue from export to
total revenue = 13.2/21.6 x 100% = 61%
- Output VAT on goods and
services sold domestically IS 0.84 billion VND.
Refundable VAT on
exported goods is calculated as follows:
Input
VAT that remains after deduction in the tax period
=
0.84
billion VND - (0.15
+ 4.8 ) billion VND
...
...
...
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
=
- 4.11
billion VND.
Thus, input VAT that
remains in the month after deduction is 4.11
billion VND.
- Input VAT on exported
goods:
Input
VAT on exported goods
=
4.11
billion VND x 61%
=
...
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
Input VAT on exported goods that
remains after deduction is 2.507 billion VND, which is larger than 300 million VND.
Thus, the taxpayer may claim 2.507 billion VND in refund of VAT. 1.603 billion
VND in input VAT on goods and services sold domestically (4.11 billion VND -
2.507 billion VND) shall be transferred to the next period instead of being
refunded.
Example 83:
In March 2014, company X declares it VAT as follows::
- VAT transferred from the
previous period: 200 million VND.
- Input VAT (on goods and
services serving export and domestic business) incurred in the month: 4.8
billion VND.
- The total
revenue is 21.6 billion VND, including 13.2 billion VND in revenue from export,
and 8.4 billion VND in revenue from domestic sale.
Ratio of revenue from
export to total revenue = 13.2/21.6 x 100% = 61%
- Output VAT on goods and
services sold domestically is 840 million VND.
- The value
of unsold goods subject to VAT in March 2014 is 10 billion VND; the
corresponding input VAT deducted is 1 billion VND (10% VAT)
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Input
VAT that remains after deduction in the month
=
840
million VND - (200 million VND + 4,800
million VND)
= - 4,160
million VND
Deductible input VAT
after removing input VAT on unsold goods:
4,160
million VND – 1,000 million VND = 3,160
million VND
- Input VAT on exported
goods:
Input VAT
on exported goods
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3,160
million VND x 61%
=
1,927.6
million VND
Input VAT on exported
goods that remains after deduction is 1,927.6 million VND,
which is larger than 300 million VND. Thus, the taxpayer may claim 2.507
billion VND in refund of VAT. 2,232.4 million VND in
input VAT on goods and services sold domestically and
unsold goods (4,160 million VND - 1,927.6 million VND) shall
be transferred to the next period instead of being refunded.
The recipient of refund in some
cases: If the export is entrusted, the business establishment having the goods
exported under entrustment is the recipient of refund; If processed goods is
forwarded, the business establishment that signs the export processing contract
with the foreign party is the recipient of refund; If goods are export to
execute an overseas construction, the exporter is the recipient of refund; The
establishment that has the domestic exports is the recipient of refund.
5. When a
company is transferred, converted, merged, amalgamated, divided, split,
dissolved, bankrupt, or shut down, it will receive a refund of paid VAT or
input VAT remains after deduction.
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6. Refund of
VAT for projects funded by non-refundable ODA, non-refundable aid, or
humanitarian aid:
a) If the project is funded by
non-refundable ODA: the project owner, main contractor, or an organization
appointed by the foreign sponsor to manage the project shall receive the refund
of paid VAT on goods and services purchased in Vietnam to serve the project.
b) When an organization in
Vietnam uses humanitarian money from a foreign entity to buy goods and services
serving a project funded by non-refundable aid or humanitarian aid in Vietnam,
it shall receive a refund of VAT on such goods and services.
Example 84: Vietnam Red Cross is
given 200 million VND by an international organization to provide humanitarian
aid for the people suffering from natural disasters. Tax-exclusive value of the
aid is 200 million VND, VAT is 20 million VND. Vietnam
Red Cross shall receive 20 million VND in tax refund.
VAT for programs/projects
funded by non-fefundable ODA shall be refunded in accordance with
instructions of the Ministry of Finance.
7. When a person provided with diplomatic immunity
purchases goods and services in Vietnam for personal use will receive a refund
of the VAT written on the VAT invoice or the receipt on which the amount
payable is inclusive of VAT.
8. Foreigners
and Vietnamese people residing abroad shall be refunded the tax on goods
purchased in Vietnam and brought along upon departure if they present their
passports or entry documents. VAT shall be refunded in accordance with
instructions of the Ministry of Finance on refunding VAT on goods brought along
upon departure by foreigners and Vietnamese people residing abroad
9. VAT shall
be refunded when the taxpayer receives a decision on tax refund issued by a
competent authority, and in other cases of VAT refund according to the
International Agreements to which the Socialist Republic of Vietnam is a
signatory
Article
19. Conditions and procedure for VAT refund
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2. Input VAT that has been claimed on the VAT
declaration must not be aggregated with the deductible tax of the next month.
3. VAT shall be refunded in accordance with the
procedures in the Law on Tax administration and its guiding documents.
Article
20. Places to pay tax
1. Taxpayer
shall declare and pay VAT in the locality where the business is situated.
2. If the
taxpayer that pays VAT using credit-invoice method has a financially dependent
manufacturing facility in a province other than the province where the
headquarter is situated, VAT shall be paid in both provinces.
3. If a
company or cooperative that uses direct method has a manufacturing facility in
a province other than that where the headquarter is situated, or engages in
extraprovincial sale, the company or cooperative shall pay direct VAT on the
revenue earned from extraprovincial sale in the province where the sale is
made. The company or cooperative is not required to pay direct VAT on such revenue,
which has been declared at paid, at the headquarter
4.
When a provider of telecommunications services provides postpaid
telecommunications services in a province other than the province where their
headquarter is situated, and establish a financially dependent branch that pays
VAT using credit-invoice method and also provides postpaid telecommunications
services in that same province, the provider of telecommunications services
shall declare and pay VAT on postpaid telecommunications services as follows:
-
VAT on the total revenue from provision of postpaid
telecommunications services of the provide shall be declared at the supervisory
tax authority of the headquarter.
-
VAT shall be paid in the provinces where the headquarter and the
branch are situated.
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5. VAT shall
be declared and paid in accordance with the Law on Tax administration and its
guiding documents.
Chapter
IV
IMPLEMENTATION
Article
21. Effect
1. This
Circular takes effect on January 01, 2014 and supersedes the Circular No. 06/2012/TT-BTC
dated January 11, 2012 and the Circular No. 65/2013/TT-BTC
dated May 17, 2013 of the Ministry of Finance.
2. Any
taxpayer that declares VAT quarterly from July 01, 2013 shall receive VAT
refund before the tax period of January 2014 (if tax is declared monthly) or before
the first quarter of 2014 (if tax is declared quarterly) if input VAT is not
completely deducted after 03 consecutive tax periods.
Example 85: Company A declares
tax monthly in May and June 2013, and starts declaring tax quarterly from Q3
2013. If input VAT incurred in May 2013, June 2013, and Q3 2013 is not
completely deducted, company A will receive a refund of VAT at the end of Q3
2013.
Example 86:
Company B declares tax monthly in June 2013 and starts declaring tax
quarterly from Q3 2013. If input VAT incurred in June 2013, and Q3 2013 and Q4
2013 is not completely deducted, company B
will receive a refund of VAT at the end of Q4 2013.
3. Before
January 2014 (if tax is declared monthly) or before Q1 2014 (if tax is declared
quarterly), any taxpayer that is eligible for tax refund according to the
Circular No. 06/2012/TT-BTC dated January 11, 2012 and the Circular No. 65/2013/TT-BTC
dated May 2013 of the Ministry of Finance shall receive a VAT
refund.
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Example 87:
VAT incurred by company A is not completely deducted in October,
November and December 2013. Thus, company A shall receive a VAT refund
according to Clause 1 Article 18 of the Circular No. 06/2012/TT-BTC
dated January 11, 2012 of the Ministry of Finance.
Example 88: Company B incurs VAT
in October 2013. Input VAT is not completely deducted in only November 2013 and
December 2013. At the end of December 2013, company B is not eligible for tax
refund according to the Circular No. 06/2012/TT-BTC. This
remaining input VAT shall be transferred to 2014, during which tax refund will
be considered, according to Clause 1 Article 18 of this Circular.
Article 89: Company C incurs VAT
in Q3 2013. The input VAT that is not completely deducted in Q4 2013 shall be
transferred to 2014, during which tax refund will be considered, according to
Clause 1 Article 18 of this Circular.
4. Every
taxpayer shall deduct input VAT on fixed assets incurred before January 01,
2014 in accordance with the Circular No. 06/2012/TT-BTC dated
January 11, 2012 and the Circular No. 65/2013/TT-BTC dated
May 17, 2013 of the Ministry of Finance; the input VAT on fixed assets incurred
from January 01, 2014 onwards shall be deducted in accordance with this
Circular.
5. The input
VAT on unprocessed or preprocessed farming, breeding, fishery products incurred
before January 01, 2014 must be enumerated in the manifest of purchases on the
VAT declaration of December 2013 or Q4 2013.
Article
22. VAT collection
1. Tax
authorities shall organize the collection of VAT and refund of VAT incurred by
business establishments.
2. Customs authorities
shall organize the collection of VAT on imported goods.
The difficulties that arise during
the implementation of this Circular should be reported to the Ministry of
Finance for timely settlement./.
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PP THE MINISTER
DEPUTY MINISTER
Do Hoang Anh Tuan
APPENDIX
RATES OF DIRECT VAT APPLIED TO VARIOUS BUSINESS LINES
(Promulgated together with the Circular No. 219/2013/TT-BTC
dated December 31, 2013 of the Ministry of Finance)
1) Goods supply and distribution:
1%
- Wholesaling and retailing
goods (except for goods sold by agents that earn commissions).
2) Services, construction exclusive
of building materials: 5%
- Accommodation, hotel,
motel services;
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- Leases on yards,
machinery, vehicles; material handling, and other services related to transport
such as parking, ticket selling;
- Postal services and
mailing;
- Commissions for running
agents, auction and brokerage services;
- Legal counseling, audit,
accounting, and financial counseling; tax brokerage and customs brokerage;
- Data processing services, lease
on information portals, IT and telecommunications equipment;
- Office assistance services and
other business assistance services;
- Steambath, massage, karaoke,
nightclub, billards, Internet, and video game services;
- Tailoring, laundry services;
hairdressing services;
- Other repair services
including: computer repairs and domestic appliance repairs;
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- Other services;
- Construction and
installation exclusive of building materials (including installation of
industrial machinery and equipment).
3) Manufacturing,
transport, services attached to goods, construction
inclusive of building materials: 3%
- Manufacturing, processing
goods;
- Mineral extraction and
processing;
- Cargo and passenger
transport;
- Services attached to goods
such as training, maintenance, technology transfers attached to goods sale;
- Food and drink services;
- Repairs and maintenance of
machinery, equipment, means of transport, other motor vehicles;
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4) Other lines of business: 2%
- Production of products
subject to 5% VAT under credit-invoice method;
- Provision of services
subject to 5% VAT under credit-invoice method;
- Other lines of business
not mentioned above.