MÔN TAXION - ketoan ď Chapter.5 VAT

Chapter Value Added Tax (VAT) Issued the first time in 1997, applied from 1/1/1999 Amended and supplemented in 2003, VAT Documents - Law No.21/2012/QH13 dated November 20, 2006 amending and supplementing articles of Law 78/2006/QH11 - Decree 83/2013/ND-CP dated 22/07/2013 - Circular 156/2013/TT-BTC dated 6/11/2013 - Decree No.209/2013/ND-CP dated 18/12/2013 guiding the implementing of articles of the VAT Law - Circular No.219/201/TT-BTC dated 31/12/2013 - Circular No.119/2014/TT-BTC dated 25/08/2014 - Decree No.91/2014/ND-CP dated October 2014 amending and supplementing Articles of the Tax Decree - Circular No.151 /TT-BTCdated 10/10/2014 guiding the implementing of Decree 91/2014 / ND-CP dated 1/10/2014 VAT Documents - Decree No.12/2015/ND-CP dated 12/02/2015 - Circular No.26/2015/TT-BTC dated 27/02/2015 - Consolidated document 13/VBHN-BTC dated 26/05/2015 - Consolidated document 16/VBHN-BTC dated 17/6/2015 - Law No.106/2016/QH13 dated 06/04/2016, amending and supplementing articles of Law No.71/2014/ QH13 dated 26/11/2014, Law No.31 dated 19/06/2013 and Law No 13/2008/QH12 on 03/06/2008 - Decree No.100/2016/ND-CP dated July 2016 guiding the implementing of Law No.106/QH13 - Circular No.130/2016 dated 12/08/2016 guiding the implementing of Decree No.100/2016/ND-CP Legal Documents for VAT Document  E-Transaction Law No.51/2005/QH11 dated 29 November 2005;  Decree No.51/2010/ND-CP dated 14 May 2010;  Circular 39/2014/TT-BTC dated 31/03/2014  Decree No.04/2014/ND-CP dated January 17, 2014 amending and supplementing articles of the Government's Decree No.51/2010/ND-CP dated May 14, 2010 Outline  Definition;  Taxable Subjects;  Non-taxable Subjects;  Taxpayers;  Tax Calculation Methods;  Tax Declaration;  Tax Refund  Accounting for VAT Definition Value-added tax (VAT) is an indirect tax, levied on the value of goods/services in the process of production, trading and consumption Taxable Subjects Goods and services subject to VAT are those in production, trading, and consumption in Vietnam (including those purchased from overseas organizations and individuals), except for in Article Circular 219/2013, Article Circular 151/2014, Article Law 71/2014, Article Law 106/2016 and Article Circular 26/2015 (next slides) Non-taxable Subjects Farming products (including agroforestry products), breeding, and aquaculture (in kind of processing or finish products) Breeds of livestock, plant varieties; Irrigation services, plowing services, canals dredging services to support agriculture Fertilizers; machinery, special equipment to support agriculture; offshore-fish-catching; and feeds of cattle, poultry and other animals; Salt from seawater, natural-mine-salt, refined salt, iodized salt composed primarily of sodium chloride (NaCl); State-owned houses sold to tenants; Transfer of right-to-use land; Certain insurance services (including life insurance, health insurance, agricultural insurance and re-insurance); Non-taxable Subjects (cont.) Financial services including credit service; loans; security trading services; capital transfer; debts selling; foreign currency trading; derivative financial services; collateral-assets services; Medical services, veterinary services; 10.Public postal, telecommunications services, public Internet services accessed by the government programs, postal and telecommunications services from abroad to Vietnam (in arrival way); 11.Maintenance services of zoos, flower gardens, parks, street greeneries, public lighting, funeral services; 12.Repairs, maintenance, and construction funded by the public funds, humanitarian aid fund for cultural and artistic works, public works, infrastructure, and housing for social-subject; 13.Teaching and training; 14.Audio and video broadcasting funded by government budget; Non-taxable Subjects (cont.) 15 Printing and publishing of newspapers, magazines and certain types of books; 16 Public transport by bus and electronic-vehical through provinces and cities ; 17 Imported machinery, equipment and tools which not yet be produced in Vietnam to directly support for science research, technology development, petroleum exploration and extraction; 18 Weapons and specialized equipment which support for national defense and security; 19 Imported products, goods/services which sale to organizations and individuals as humanitarian/non-refundable aid; gifts; belongings of foreign entities, individuals according to for diplomatic standards; carry-tax–free-luggage; 20 Goods go through Vietnam’s territory; goods temporarily imported/exported and re-exported/re-imported, raw materials imported for manufacturing or export processing Goods/ services traded between foreign parties, non-tariff-zones, or among non-tariffzones; Tax Rates 0% This rate applies to exported goods/services including goods/services sold to overseas/non-tariff-zone and consumed outside Vietnam/in the non-tariff-zone, goods processed for export or export-at-right-site (according to regulation), goods sold to duty free shops, certain exported services, construction and installation of processing-andexporting enterprises, aviation, marine and international transportation services 5% This rate applies to the enterprises that provide essential goods and services, including: clean water; teaching tools; books; unprocessed foods; medicine and medical equipment; husbandry-feed; agricultural products and services; technical/scientific services; rubber latex; sugar and its-related-material; certain cultural, artistic, sport services/products and social housing 10% This "standard" rate applies to enterprise’s activities not specified as exemption, or 0%, or 5% Tax Rates (con’t.) 0% VAT => Services performance and goods selling directly to foreign companies, including companies in non-tariff-zone, are subject to 0% VAT if they are consumed outside Vietnam or in non-tariffzone ⇒Various supporting documents are required in order to apply 0% VAT (except for international transportation services): e.g contracts, evidence of non-cash payment and customs declarations (for exported goods) ⇒If a product can not be identified under the prescribed tariff, the enterprise must pay at the highest VAT tax rate for that product Calculation Methods There are two VAT calculation methods: Deduction method; Direct method Deduction Method This method applies to enterprises maintaining accounting books, invoices and documents in accordance with the relevant regulations, including: Business establishments with annual revenue subject to VAT of VND (one) billion or more; Certain cases voluntarily registering for VAT declaration under the deduction method Deduction Method (con’t.) Calculation of input VAT: If special invoices on which selling prices are VATinclusive, taxpayers may calculate VAT-exclusive prices and input VAT by:  VAT invoices can be declared and claimed any time before the company receives notice of tax audit by the tax authorities  Input VAT on goods and services valued at VND 20 million or more can only be deducted where evidence of electronic fund transfer is available Deduction Method Example Thanh Thai Company bought 200kg of nylon for packaging products Sum of input VAT of 200kg nylon was VND million The nylon was used to package two products including sugar and salt Accountants of Thanh Thai separately recorded: 150kg used for Sugar and 50kg for Salt Thanh Thai Company had input VAT for telephone fees of VND10 million in the factory These fees were used for manufacturing both sugar and salt Accountants of Thanh Thai did not separately record deductible input VAT and non-deductible input VAT of telephone service Sales of sugar was VND 100 billion and salt was VND 200 million (exclusive of VAT) Direct Method This method applies to: Gold, silver and precious stones trading businesses; Businesses with annual revenue less than VND1 billion; Individuals and business households; Businesses not maintain proper books of account, foreign organizations, or individuals with business activities not regulated in the Law on Investment Direct Method For enterprises engaging in trading in gold, silver and precious stones: Value added of gold, silver and gemstones = Selling prices of gold, silver, and gemstones - Cost prices of gold, silver, and gemstones Direct Method (cont.) For other cases:  Taxable revenue is total revenue from selling goods and services, which is written on the sale invoice for taxable goods and services, including any charges to which the seller is entitled  VAT payable = Rate (%) x Revenues: - 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%; - Other lines of business: 2% Tax Declaration  All organizations and individuals producing or trading value added taxable goods and services in Vietnam must register for VAT In certain cases, branches of an enterprise must register and declare VAT separately for their own activities  Taxpayers must file VAT return monthly, the latest date is the 20th date of the subsequent month, or the 30th date of the subsequent quarter for taxpayers file VAT return quarterly (companies with prior year annual revenue of VND 50 billion or less) Tax Declaration (cont.) Declaring VAT using deduction method: VAT declaration (form 01/GTGT); Declaring VAT using direct method: Monthly/quarterly declaration (form 03/GTGT) Declaring VAT on revenue using direct method: Monthly/quarterly declaration (form 03/GTGT) and/or (form 041/GTGT) Unscheduled declaration of VAT on revenue using direct method (form 04/GTGT) Declaring VAT on extra-provincial business including construction, installation, sales, real estate transfer: (form 05/GTGT) Tax Refund  When the taxpayer’s input VAT for a period exceeds its output VAT, it will have to carry the excess forward for the subsequent period  In certain cases (e.g exporters where input VAT exceed output VAT of VND 300 million), a refund may be granted on a monthly/quarterly basis  Newly established entities in the pre-operation investment phase may claim VAT refunds on a yearly basis, or when the accumulated VAT credits exceed VND300 million  Newly established entities and certain investment projects which are in the pre-operation stage may be entitled to refunds for VAT paid on imported fixed assets based on shorter timelines than normal, subject to certain conditions Accounting for VAT - VAT đầu vào: Khi mua tài sản, hàng hóa & dịch vụ…: Nợ TK 156, 152,153, 211, 642, 142, 242 Nợ TK 1331 (Thuế GTGT mua hàng nội địa) Nợ 333312: (Thuế GTGT hàng NK) Có TK 111, 112, 331 - VAT đầu ra: Khi cung cấp hàng hóa & dịch vụ: Nợ TK 111, 112, 131 Có TK 3331   Có TK 511 - Khấu trừ Thuế GTGT hàng NK: Nợ 1331 (Thuế GTGT mua hàng nội địa) Có 33312 (Thuế GTGT hàng NK) Accounting for VAT - Cuối kỳ, xác định số thuế VAT khấu trừ: Nợ TK 3331 - Thuế GTGT phải nộp  Có TK 1331 - Thuế GTGT khấu trừ - Khi nộp tiền thuế vào NSNN: Nợ TK 3331 - Thuế GTGT phải nộp Có TK 111, 112 Chapter – Value Added Tax (VAT) END OF CHAPTER ... value of materials - If contract is as percentage-of-completion-contract: The taxable price is as percentage-of-completion-collection from customer (excluding VAT)  For real-estate business activities:... Documents - Decree No.12/2015/ND-CP dated 12/02/2015 - Circular No.26/2015/TT-BTC dated 27/02/2015 - Consolidated document 13/VBHN-BTC dated 26/05/2015 - Consolidated document 16/VBHN-BTC dated... 6/11/2013 - Decree No.209/2013/ND-CP dated 18/12/2013 guiding the implementing of articles of the VAT Law - Circular No.219/201/TT-BTC dated 31/12/2013 - Circular No.119/2014/TT-BTC dated 25/08/2014 -