Are promotional goods given away in "buy 1, get 1" deals on Black Friday subject to value-added tax in Vietnam?

Are promotional goods given away in "buy 1, get 1" deals on Black Friday subject to value-added tax in Vietnam?

Pursuant to Clause 5, Article 7 of Circular 219/2013/TT-BTC, it is stipulated as follows:

Taxable Price

...

5. For products, goods, and services used for promotions according to the provisions of commercial law, the taxable price is determined to be zero (0); in cases where goods and services are used for promotions but not in accordance with the provisions of commercial law, they must be declared and taxed as if they were goods and services used for internal consumption, gifts, or donations.

Some specific types of promotions are implemented as follows:

a) In the promotion form of providing sample goods, offering sample services for customers to try for free, gifting goods to customers, or providing services free of charge, the taxable price for sample goods and services is determined to be zero.

Example 29: Company TNHH P produces carbonated drinks. In 2014, the company ran a promotion in May 2014 and December 2014 in the form of buy 10, get 1 free. The promotion in May 2014 was conducted in accordance with the correct procedures and legal promotional regulations. For the products given away during May 2014, Company TNHH P determined the taxable price to be zero (0).

In cases where the promotion in December 2014 was not conducted following the correct procedures and legal promotional regulations, Company TNHH P must declare and pay VAT for the products given away during December 2014.

b) For forms of selling goods or providing services at prices lower than previous sale prices, the VAT taxable price is the reduced sale price applied during the registered or notified promotion period.

Example 30: Company N operates in the telecommunications field, specializing in selling mobile recharge cards. The company registers a promotion according to the regulations of the commercial law in the form of selling goods at prices lower than the previous sale prices for the period from April 1, 2014, to April 20, 2014. During the promotion period, the sale price of a 100,000 dong recharge card (including VAT) is reduced to 90,000 dong.

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Firstly, for products, goods, and services used for promotions according to the provisions of commercial law, the taxable price is determined to be zero (0); in cases where goods and services are used for promotions but not in accordance with commercial law, they must be declared and taxed like goods and services for internal consumption, gifts, or donations.

For the promotional form of buying 1 old product and giving 1 new product for trial, if carried out in compliance with commercial law, the taxable price is determined to be zero (0). This means no fee will be charged. Conversely, if not compliant, VAT will be applied.

Thus, according to the above regulations, promotional goods given away in a "buy 1, get 1" deal on Black Friday may not be subject to value-added tax.

Are promotional goods given away in "buy 1, get 1" deals on Black Friday subject to value-added tax in Vietnam? (Image from Internet)

What are regulations on the deadline for paying value-added tax for enterprises after the extension in 2024 in Vietnam?

According to Clause 1, Article 4 of Decree 64/2024/ND-CP regarding the extension of the deadline for paying value-added tax (excluding VAT at the import stage) for enterprises and organizations, as follows:

The deadline for paying value-added tax for monthly, quarterly tax periods is extended as follows:

The deadline for paying value-added tax for the tax period of May 2024 is no later than November 20, 2024.

The deadline for paying value-added tax for the tax period of June 2024 is no later than December 20, 2024.

The deadline for paying value-added tax for the tax period of July 2024 is no later than December 20, 2024.

The deadline for paying value-added tax for the tax period of August 2024 is no later than December 20, 2024.

The deadline for paying value-added tax for the tax period of September 2024 is no later than December 20, 2024.

The deadline for paying value-added tax for the tax period of the second quarter of 2024 is no later than December 31, 2024.

The deadline for paying value-added tax for the tax period of the third quarter of 2024 is no later than December 31, 2024.

Note: Decree 64/2024/ND-CP is effective until December 31, 2024.

What entities are value-added taxpayers in Vietnam?

According to Article 4 of the Value-Added Tax Law 2008:

Entities subject to value-added tax include organizations and individuals that produce or trade goods and services subject to VAT (hereinafter referred to as business establishments) and organizations and individuals that import goods subject to VAT (hereinafter referred to as importers).

However, in practice, the nature of value-added tax (VAT) is an indirect tax that is added to the sale price of goods and services and paid by consumers when using the products.

Thus, while value-added tax (VAT) is indeed paid by consumers, it is the business establishments that collect and remits the VAT.