Are goods subject to excise tax eligible for VAT reduction in Vietnam?

Are goods subject to excise tax eligible for VAT reduction in Vietnam?

According to the provisions of Clause 1, Article 1 of Decree 15/2022/ND-CP:

VAT reduction

1. VAT on goods and services currently subject to 10% VAT shall be reduced, except the following goods and services:

a) Telecommunication, financial activities, banking activities, securities, insurance, trading of real estate, metal and precast metal products, mining products (excluding coal mining), coke mining, refined oil, chemical products. Further details are provided in Appendix I enclosed herewith.

b) Goods and services subject to excise tax. Further details are provided in Appendix II enclosed herewith.

c) Information technology as prescribed in the Law on information technology. Further details are provided in Appendix III enclosed herewith.

d) Reduction of VAT for each type of goods and services specified in Clause 1 of this Article shall be applied consistently in all stages, including import, production, processing and trading.  Coal mined for sale (including coal mined and then washed, sieved and classified under a closed process) shall be eligible for VAT reduction. VAT on coal products in Appendix I enclosed herewith in stages other than the stage of mining and sale shall not be reduced.

In case goods and services in Appendixes I, II and III enclosed herewith are not subject to VAT or are subject to 5% VAT in accordance with the Law on VAT, regulations of the Law on VAT shall prevail and VAT on such goods and services shall not be reduced.

Thus, according to the above provisions, goods and services subject to excise tax are not eligible for VAT reduction.

Are goods subject to excise tax eligible for VAT reduction in Vietnam? (Image from the Internet)

Where do household businesses in Vietnam submit their VAT declaration dossiers?

According to the provisions of Clause 2, Article 11 of Circular 40/2021/TT-BTC:

Tax administration of household businesses and individual businesses under periodic declarations

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2. Receiving authorities

Household businesses and individual businesses paying tax under periodic declarations as prescribed in Clause 1 Article 45 of the Law on Tax Administration shall submit tax declaration dossiers to their supervisory sub-department of taxation.

3. Deadlines for submission of tax declaration dossiers

Household businesses and individual businesses paying tax under periodic declarations shall submit tax declaration dossiers by the deadlines specified in Clause 1 Article 44 of the Law on Tax Administration. To be specific:

a) Household businesses and individual businesses paying tax under monthly periodic declarations shall submit their tax declaration dossiers by the 20th of the month succeeding the month in which tax is incurred.

b) Household businesses and individual businesses paying tax under quarterly periodic declarations shall submit their tax declaration dossiers by the last day of the first month of the quarter succeeding the quarter in which tax is incurred.

...

Thus, household businesses submit VAT declaration dossiers to their supervisory sub-department of taxation.

Which entities are VAT payers in Vietnam?

Under Article 3 of the Law on VAT 2008 on VAT payers:

Taxable objects

Goods and services used for production, trading or consumption in Vietnam are subject to value-added tax, except those specified in Article 5 of this Law.

Thus, goods and services used for production, trading or consumption in Vietnam are subject to value-added tax (including goods and services purchased from organizations and individuals abroad), except for the non-taxable objects as follows:

- Cultivation and husbandry products, and reared and fished aquatic products which have not yet been processed into other products or have been just preliminarily processed and sold by producing and fishing organizations and individuals, and products at the stage of importation.

- Products which are animal breeds and plant varieties, including breeding eggs, breeding animals, seedlings, seeds, sperms, embryos and genetic materials.

- Irrigation and drainage; soil ploughing and harrowing; dredging of intra-field canals and ditches for agricultural production; services of harvesting farm produce.

- Salt products made of seawater, natural rock salt, refined salt and iodized salt.

- State-owned residential houses sold by the State to current tenants.

- Transfer of land use rights;

- Life insurance, student insurance, insurance on domestic animals, insurance on plants and reinsurance.

- Credit provision services; securities trading; capital transfer; derivative financial services, including interest-rate swap contracts, forward contracts, futures contracts, call or put options, foreign currency sales, and other derivative financial services as prescribed by law.

- Healthcare and animal health services, including medical examination and treatment and preventive services for humans and domestic animals.

- Public post and telecommunications and universal Internet services under the Governments programs.

- Public services on sanitation and water drainage in streets and residential areas; maintenance of zoos, flower gardens, parks, street greeneries and public lighting; funeral services;

- Renovation, repair and construction of cultural, artistic, public service and infrastructure works and residential houses for social policy beneficiaries, which are funded with peoples contributions or humanitarian aid.

- Teaching and vocational training as provided for by law.

- State budget-funded radio and television broadcasting.

- Publication, import and distribution of newspapers, journals, specialized bulletins, political books, textbooks, teaching materials, law books, scientific-technical books, books printed in ethnic minority languages as well as propaganda postcards, pictures and posters, including those in the form of audio or visual tapes or discs or electronic data; money printing.

- Mass transit by bus and tramcar.

- Machinery, equipment and supplies which cannot be manufactured at home and need to be imported for direct use in scientific research and technological development activities; machinery, equipment, spare parts, special-purpose means of transport and supplies which cannot be manufactured at home and need to be imported for prospecting, exploring and developing oil and gas fields; aircraft, drilling platforms and ships which cannot be manufactured at home and need to be imported for the formation of enterprises fixed assets or which are hired from foreign parties for production and business activities or for lease.

- Special-purpose weapons and military equipment for security and defense purposes.

- Goods imported as humanitarian aid or non-refundable aid; gifts for state agencies, political organizations, socio-political organizations, socio-political-professional organizations, social organizations, socio-professional organizations or peoples armed forces units; donations or gifts for Vietnam-based individuals within the Government-prescribed quotas; belongings of foreign organizations and individuals within diplomatic immunity quotas; and personal effects within duty-free luggage quotas.

Goods and services sold to foreign organizations or individuals or international organizations for use as humanitarian aid, and non-refundable aid to Vietnam.

- Goods transferred out of border gate or transited via the Vietnamese territory; goods temporarily imported for re-export; goods temporarily exported for re-import; raw materials imported for the production or processing of goods for export under contracts signed with foreign parties; goods and services traded between foreign countries and non-tariff areas and between non-tariff areas.

- Technology transfer under the Law on Technology Transfer; transfer of intellectual property rights under the Law on Intellectual Property; computer software.

- Gold imported in the form of bars or ingots which have not yet been processed into fine-art articles, jewelries or other products.

- Exported products which are unprocessed mined resources or minerals as prescribed by the Government.

- Artificial products used for the substitution of diseased peoples organs; crutches, wheelchairs and other tools used exclusively for the disabled.

- Goods and services of business individuals who have a monthly income lower than the common minimum salary level applicable to domestic organizations and enterprises.

Establishments trading in non-taxable goods or services specified in  Article 5, Law on VAT 2008 are not entitled to input value-added tax credit or refund, except the cases subject to the tax rate of 0% specified in Clause 1, Article 8 of the Law on VAT 2008.