Is refined salt subject to value-added tax in Vietnam? What is the method for calculating VAT in Vietnam?

Is refined salt subject to value-added tax in Vietnam?

Based on Clause 3, Article 4 of Circular 219/2013/TT-BTC, amended and supplemented by Circular 26/2015/TT-BTC, the regulations on subjects not subject to value-added tax are as follows:

Subjects Exempt from VAT

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3a. Fertilizers including organic fertilizers and inorganic fertilizers such as: phosphate fertilizers, urea fertilizers, NPK fertilizers, compound fertilizers, phosphate fertilizers, potassium; microbial fertilizers and other types of fertilizers;

Animal feed for livestock, poultry, aquatic products, and other animal feeds, including products processed or unprocessed such as bran, meals, various oils, fish meal, bone meal, shrimp meal, and other feed for livestock, poultry, aquatic products, and other animals, feed additives (such as premix, active ingredients, and carriers) in accordance with Clause 1, Article 3 of Decree No. 08/2010/ND-CP, February 5, 2010, by the Government of Vietnam on the management of animal feed and Clauses 2, 3, Article 1 of Circular No. 50/2014/TT-BNNPTNT, December 24, 2014, by the Ministry of Agriculture and Rural Development;

Offshore fishing vessels are those with a main engine capacity of 90 horsepower (CV) or more engaged in seafood exploitation or logistics services for seafood exploitation; specialized machinery and equipment serving the exploitation and preservation of products for fishing vessels with a total main engine capacity of 90 CV or more engaged in seafood exploitation or logistics services for seafood exploitation;

Specialized machinery and equipment serving agricultural production, including: tractors; harrows; ploughs; row markers; root graders; land leveling equipment; seeders; transplanters; sugar cane planters; turf planting systems; cultivators, ridge creators, spreaders, fertilizers, sprayers for plant protection products; harvesters for rice, maize, sugar cane, coffee, cotton; root and fruit harvesters; tea pruning machines, tea picking machines; threshers; corn shellers; soybean threshers; peanut shellers; coffee husking; machines and equipment for preliminary processing of wet rice and coffee; agricultural dryers (rice, maize, coffee, pepper, cashew,...), seafood; collecting, loading machines for sugarcane, rice, straw in fields; egg incubators, hatchers; grass harvesters, hay bales; milkers and other specialized machines.

4. Salt products made from seawater, natural mineral salt, refined salt, iodized salt with the main component being sodium chloride (NaCl).

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

6. Transfer of land use rights.

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Based on the above regulations, it can be seen that refined salt is one of the items not subject to value-added tax.

Is refined salt subject to value-added tax in Vietnam? What is the method for calculating VAT in Vietnam? (Image from the Internet)

What is the method for calculating value-added tax in Vietnam?

According to the provisions in Article 9 of the Value-Added Tax Law 2008, there are two methods for calculating value-added tax: the deduction method and the direct calculation method on added value.

The applicable subjects for the deduction method and the direct calculation method on added value are prescribed as follows:

- The deduction method applies to business establishments that fully implement policies on accounting, invoices, and documents as stipulated by law on accounting, invoices, documents, and register to pay tax using the deduction method (Clause 2, Article 10 of the Value-Added Tax Law 2008).

- The direct calculation method applies to the following cases: (i) Business establishments and foreign organizations, individuals doing business without a permanent establishment in Vietnam but having income arising in Vietnam not fully implementing policies on accounting, invoices, documents; (ii) Trading of gold, silver, gemstones (Clause 2, Article 11 of the Value-Added Tax Law 2008).

When is the determination of value-added tax in Vietnam?

According to the provisions in Article 8 of Circular 219/2013/TT-BTC, the determination time of value-added tax is as follows:

- For the sale of goods, it is the time of transfer of ownership or right to use the goods to the buyer, regardless of whether the money has been collected or not.

- For service provision, it is the time the service is completed or the service invoice is issued, regardless of whether the money has been collected or not.

For telecommunication services, it is the time to finalize data on telecommunication connection charges according to the economic contract between telecommunications service business establishments, but no later than 2 months from the month in which the telecommunication connection charges arise.

- For electricity and clean water supply activities, it is the date of recording the consumption index on the meter to be recorded on the invoice.

- For real estate business, infrastructure construction, housing construction for sale, transfer, or lease, it is the time of money collection according to project implementation progress or money collection progress stated in the contract. Based on the collected amount, the business establishment declares the output value-added tax incurred.

- For construction and installation, including shipbuilding, it is the time of acceptance, handover of works, work items, construction volume, installation completed, regardless of whether the money has been collected or not.

- For imported goods, it is the time of customs declaration registration.