Is the income from maintenance of zoos subject to VAT in Vietnam?
Is the income from maintenance of zoos subject to VAT in Vietnam?
Based on Clause 11, Article 5 of the Law on Value-Added Tax 2008, supplemented by Clause 1, Article 3 of the Law Amending Tax Laws 2014 and amended by Clause 1, Article 1 of the Amended Value-Added Tax Law 2013, it specifically provides for subjects not subject to tax as follows:
Subjects not subject to tax
...
- Public postal, telecommunications services, and popular Internet services according to the program of the Government of Vietnam.
- maintenance of zoos, flower gardens, parks, street trees, public lighting; funeral services.
- Upkeep, repair, construction funded by public contributions and humanitarian aid for cultural, artistic works, public service works, infrastructure and housing for social policy beneficiaries.
....
Thus, according to the aforementioned regulation, income from maintenance of zoos is not subject to value-added tax (VAT) because maintenance of zoos fall under the category of subjects not subject to value-added tax.
Is the income from maintenance of zoos subject to VAT in Vietnam? (Image from the Internet)
What is the reverse VAT calculation formula in Vietnam?
Forward VAT Calculation (excluding VAT):
The formula for calculating VAT using the forward method is:
| VAT = VAT taxable price x tax rate |
In which:
The VAT taxable price is the selling price of goods or services excluding VAT.
The tax rate is the VAT rate applied to goods or services (e.g., 5%, 10%,...).
Reverse VAT Calculation (when the selling price includes VAT):
When the selling price includes VAT, you will need to calculate the reverse VAT to determine the amount of tax payable. The reverse VAT calculation formula is as follows:
Amount before tax = Amount after tax / (1 + VAT rate)
Tax amount = Amount before tax x VAT rate
The tax rate is the VAT rate applied to goods or services.
- Cases applying reverse VAT:
+ Pawn services.
+ All-inclusive travel services (including accommodation, meals, transportation).
+ Types of books subject to VAT sold at the cover price.
+ Types of lottery tickets, transport tickets, stamps with prices already including VAT.
What are regulations on taxable price in Vietnam?
According to Article 7 of the Law on Value-Added Tax 2008, amended by Clause 2, Article 1 of the Amended Value-Added Tax Law 2013, and regulations regarding exchange rates for determining taxable prices abolished by Point c, Clause 2, Article 6 of the Law Amending Tax Laws 2014, specific provisions on the taxable price are as follows:
- For goods, services sold by production and business establishments, it is the selling price excluding VAT; for goods, services subject to special consumption tax, it is the selling price including special consumption tax but excluding VAT; for goods subject to environmental protection tax, it is the selling price including environmental protection tax but excluding VAT; for goods subject to both special consumption tax and environmental protection tax, it is the selling price including both taxes but excluding VAT;
- For imported goods, it is the import price at the border gate plus import duty (if any), plus special consumption tax (if any) and plus environmental protection tax (if any). The import price at the border gate is determined in accordance with regulations on the taxable price of imports;
- For goods, services for exchange, internal consumption, gift, donation, it is the VAT taxable price of goods, services of the same type or equivalent at the time these activities arise;
- For rental activities, the taxable price is the rental payment excluding VAT.
- In case of rental payment per period or advance payment for the rental period, the taxable price is the periodic rent or pre-paid amount excluding VAT;
- In case of renting machinery, equipment, means of transportation from abroad, which cannot be produced domestically for sublease, the taxable price is reduced by the rental fees payable to foreign entities.
- For goods sold under installment or deferred payment, it is based on the one-time payment price excluding VAT of those goods, not including installment interest, deferred payment interest;
- For goods processing, it is the processing price excluding VAT;
- For construction, installation activities, it is the value of the work, work item, or portion not yet handed over excluding VAT. In cases of construction, installation without the supply of materials, machinery, equipment, the taxable price is the value of construction, installation excluding the value of materials and equipment;
- For real estate business activities, it is the real estate selling price excluding VAT, excluding the land use right transfer price or land rent payable to the state budget;
- For agency, brokerage activities of buying and selling goods and services receiving commission, it is the commission received from these activities excluding VAT;
- For goods, services using payment documents indicating payment price including VAT, the taxable price is determined by the following formula:
Tax exclusive price = Payment price / 1 + tax rate of goods, services (%)
- The taxable price for goods, services as prescribed in Clause 1, Article 7 of the Law on Value-Added Tax 2008 includes extra charges and additional fees that the business establishment is entitled to.
