If the business establishment in Vietnam cannot determine VAT rates, shall the highest VAT rate be declared under the Law on Value Added Tax?

If the business establishment in Vietnam cannot determine VAT rates, shall the highest VAT rate be declared under the Law on Value Added Tax?

Based on Clause 4, Article 9 of the Law on Value Added Tax 2024 (effective from July 1, 2025), the provision on VAT tax rates clearly states as follows:

Tax Rate

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4. Business establishments engaged in multiple types of goods and services with different value-added tax rates (including those not subject to value-added tax) must declare value-added tax according to the specific tax rate prescribed for each type of goods, services; if the business establishment cannot determine according to each tax rate, they must calculate and pay tax according to the highest tax rate applicable to the goods and services produced or traded by the establishment.

Thus, in cases where a business establishment handles multiple types of goods and services with different VAT rates, it must declare value-added tax according to the tax rate specified for each type of goods and services.

If the business establishment in Vietnam cannot determine VAT rates, shall the highest VAT rate be declared under the Law on Value Added Tax? (Image from the Internet)

What are requirements to receive VAT refund for new investment projects in Vietnam from July 1, 2025?

Based on Clause 9, Article 15 of the Law on Value Added Tax 2024 regarding the requirements to receive VAT refund for investment projects as follows:

- Comply with the provisions on input VAT deduction as stipulated in Clause 2, Article 14 of the Law on Value Added Tax 2024; not falling under cases stipulated in Clause 3, Article 14 of the Law on Value Added Tax 2024;

- The seller must have declared and paid VAT for invoices issued to the business establishment requesting the refund;

- Business establishments eligible for VAT refund must be those that apply VAT using the deduction method, maintaining and preserving accounting records, and having a bank account under the business tax identification number.

Note: Business establishments eligible for VAT refund, with input VAT fulfilling all refund conditions and complying with the legal provisions on tax declaration, must compile a VAT refund dossier for each refund case and submit it to the competent tax authority.

The tax authority classifies the VAT refund dossiers as entitled to prior refund or prior inspection and resolves the VAT refund application according to the legal provisions on tax administration.

When is the time for determining value-added tax in Vietnam according to the Law on Value Added Tax 2024?

Based on Article 8 of the Law on Value Added Tax 2024, the guidelines for timing the determination of value-added tax are stipulated as follows:

- For goods, it is the point in time when ownership or usage rights of the goods are transferred to the buyer or when the invoice is issued, regardless of whether payment has been received or not.

- For services, it is the point in time when the service provision is completed or when the invoice for the service provision is issued, regardless of whether payment has been received or not.

- The timing for determining value-added tax for the following goods and services shall be specified by the Government of Vietnam:

+ Exported goods, imported goods;

+ Telecommunications services;

+ Insurance business services;

+ Electricity supply operations, production of electricity, clean water;

+ Business real estate operations;

+ Construction, installation, and petroleum operations.

What are prohibited acts in VAT deduction and refund in Vietnam under the new regulations?

According to Article 13 of the Law on Value Added Tax 2024, effective from July 1, 2024, the following acts are strictly prohibited in VAT deduction, refund:

- Buying, giving, selling, organizing advertising, mediating buying, selling invoices.

- Creating transactions for purchasing, selling goods, providing services that do not exist or transactions not conformable with the law.

- Issuing invoices for selling goods, providing services during the suspension of business operations, except for issuing invoices to customers to perform contracts signed before the business suspension notification date.

- Illegally using invoices, documents, unlawfully using invoices, documents according to the regulations of the Government of Vietnam.

- Failing to transmit electronic invoice data to the tax authority as required.

- Altering, misusing, unauthorized access, destroying the information system of invoices, documents.

- Offering, accepting, mediating bribes, or committing other acts related to invoices, documents to obtain tax deductions, refunds, misappropriate tax refunds, evade value added tax.

- Colluding, covering up; connecting between tax management officials, tax authorities, and business establishments, importers, between business establishments, importers in using unlawful invoices, documents to obtain tax deductions, refunds, misappropriate tax, evade value added tax.