Is newsprint subject to VAT in Vietnam?

Is newsprint subject to VAT in Vietnam?

Based on the provisions in Clause 9, Article 10 of Circular 219/2013/TT-BTC which stipulates a 5% tax rate applied to goods and services as follows:

5% Tax Rate

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9. Products made from jute, sedge, bamboo, rattan, cane, coconut leaf, straw, coconut shell, water hyacinth, and other handicraft products produced using agricultural by-product materials are types of products manufactured and processed from the main raw materials like jute, sedge, bamboo, rattan, cane, coconut leaf, such as: jute carpets, jute fiber, jute sacks, coir mats, jute-made, sedge-made mats; chít brooms, ropes, ties made from bamboo, coconut fiber; bamboo, rattan curtains, mats; conical hats; bamboo chopsticks, luong chopsticks; unprocessed cotton fibers; newsprint*.*

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Additionally, based on Article 11 of Circular 219/2013/TT-BTC which provides a 10% tax rate as follows:

10% Tax Rate

The 10% tax rate applies to goods and services not regulated in Articles 4, 9, and 10 of this Circular.

The VAT rates stated in Articles 10 and 11 are uniformly applied to each type of goods, services in the stages of import, production, processing, or commercial trading.

Example 50: If the apparel goods are subject to a 10% tax rate, then this item at the stage of import, production, processing, or commercial trading applies the 10% tax rate.

Scrap and waste collected for recycling or re-use are subject to the VAT rate according to the tax rate of the scrap, waste being sold.

Business establishments dealing with multiple types of goods and services having different VAT rates must declare VAT according to each tax rate for each type of goods and service; if the business establishment does not determine according to each tax rate, it must calculate and pay tax at the highest tax rate of the goods and services that the establishment produces and trades.

In the implementation process, if there is a case where the VAT rate in the VAT rate table by the Preferential Import Tariff Schedule does not match the guidance in this Circular, then follow the guidance in this Circular. In case the applicable VAT rate is inconsistent for the same type of imported and domestically produced goods, the local tax authority and the local customs authority should report to the Ministry of Finance for prompt guidance for uniform implementation.

From the above regulations, the case where a Company trades in products like newsprint: if the newsprint is produced, processed from the main materials such as jute, sedge, bamboo, rattan, cane, etc., then a 5% VAT rate is applied.

Is newsprint subject to VAT in Vietnam? (Image from the Internet)

When is the time of VAT calculation for newsprint in Vietnam?

Pursuant to Clause 1, Article 8 of Circular 219/2013/TT-BTC, the time of VAT calculation for trading in newsprint is the time of selling to the buyer, regardless of whether money has been collected or not.

Where does a company trading in newsprint pay VAT in Vietnam?

According to the provisions of Article 20 of Circular 219/2013/TT-BTC regarding where VAT is paid:

Place of Tax Payment

1. Taxpayers declare and pay VAT at the local area where they produce and do business.

2. Taxpayers declare and pay VAT by the deduction method with dependent accounting production establishments located in a province, centrally-run city different from where the head office is located, must pay VAT at the local area where the production establishment is and at the local area where the head office is located.

3. In case an enterprise, cooperative applies the direct method with a production establishment in a province, city different from where the head office is located or has out-of-province itinerant sales activities, then the enterprise, cooperative shall declare and pay VAT at a % rate on the revenue arising in the other province at the local area where the production establishment is, where itinerant sales occur. Enterprises, cooperatives do not have to pay VAT at a % rate on revenue at the head office for revenue arising in the other province that has been declared and paid tax.

4. In the case of a telecommunications service establishment having postpaid telecommunications services in a province, city different from where the head office is and has established dependent accounting branches paying VAT by the deduction method and also doing postpaid telecommunications services in that local area, then the telecommunications service establishment shall declare and pay VAT for postpaid telecommunications services as follows:

- Declare VAT on the revenue of postpaid telecommunications services of the entire business establishment with the tax authority directly managing the head office.

- Pay VAT at the local area where the head office is and at the local area where the dependent accounting branches are.

The amount of VAT payable at the local area where the dependent accounting branches are located is determined at a rate of 2% (for postpaid telecommunications services subject to a 10% VAT rate) on the revenue (excluding VAT) from postpaid telecommunications services at the local area where the dependent accounting branches are located.

5. The declaration and payment of VAT are conducted according to the provisions in the Law on Tax Administration and the guiding documents implementing the Tax Administration Law.

A Company trading in newsprint will declare and pay VAT at the local area where they produce and do business.