Shall the deductible VAT be determined at the start or end of the accounting period in Vietnam?

What are regulations on accounting period in Vietnam?

* General Regulations on Accounting Periods (According to Clause 1, Article 12 of the Law on Accounting 2015)

The accounting period includes the annual accounting period, quarterly accounting period, and monthly accounting period as stipulated below:

- The annual accounting period is 12 months, calculated from the beginning of January 1 to the end of December 31 of the calendar year.

Accounting entities with specific organizational and operational characteristics may select the annual accounting period as a full 12 months according to the calendar year, beginning from the start of the first day of the first month of this quarter to the end of the last day of the last month of the previous quarter of the following year and must notify the financial authority and tax authority;

- The quarterly accounting period is 03 months, calculated from the beginning of the first day of the first month of the quarter to the end of the last day of the third month of the quarter;

- The monthly accounting period is 01 month, calculated from the beginning of the first day to the end of the last day of the month.

* Regulations on Accounting Periods in Special Cases (According to Clauses 2, 3, and 4, Article 12 of the Law on Accounting 2015)

- The accounting period of newly established accounting entities is regulated as follows:

+ The first accounting period of a newly established enterprise is calculated from the start of the day the business registration certificate is issued to the end of the last day of the annual accounting period, quarterly accounting period, or monthly accounting period as per general regulations;

+ The first accounting period of another accounting entity is calculated from the start of the day the decision to establish the accounting unit becomes effective to the end of the last day of the annual accounting period, quarterly accounting period, or monthly accounting period as per general regulations.

- In the event of an accounting entity being divided, amalgamated, merged, converted in form or ownership, dissolved, terminating operations, or bankrupt, the final accounting period is calculated from the beginning of the annual accounting period, quarterly accounting period, or monthly accounting period as per general regulations to the day before the decision to divide, amalgamate, merge, convert in form or ownership, dissolve, terminate operations, or bankrupt the accounting unit becomes effective.

- If the first or last annual accounting period is shorter than 90 days, it can be combined with the next annual accounting period or the previous annual accounting period to constitute an annual accounting period; the first or last annual accounting period must be less than 15 months.

Shall the deductible VAT be determined at the start or end of the accounting period in Vietnam? (Image sourced from the Internet)

Shall the deductible VAT be determined at the start or end of the accounting period in Vietnam?

Pursuant to the provisions in Article 19 of Circular 200/2014/TT-BTC on Account 133 – Deductible Value Added Tax:

Article 19. Account 133 – Deductible Value Added Tax

1. Accounting Principles

a) This account is used to reflect the deductible input VAT, already deducted and remaining deductible for the enterprise.

b) Accounting must separately account for deductible and non-deductible input VAT. If separate accounting is not feasible, the input VAT is accounted into account 133. At the end of the period, accounting must determine the deductible and non-deductible VAT in accordance with the law on VAT.

c) Non-deductible input VAT is charged to the asset's value being purchased, sales cost, or production cost, depending on each specific case.

d) The determination of deductible input VAT, declaration, settlement, and tax payment must comply with the provisions of the VAT law.

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Thus, at the end of the accounting period, accounting must determine the deductible VAT in accordance with VAT laws.

Note: The determination of deductible input VAT, declaration, settlement, and tax payment must comply with the provisions of VAT laws.

What is the structure and content of Account 133 - Deductible VAT in Vietnam?

The structure and content reflection of Account 133 - Deductible VAT is regulated in Clause 2, Article 19 of Circular 200/2014/TT-BTC as follows:

Debit Side:

Input VAT that can be deducted.

Credit Side:

- Deductible input VAT;

- Transfer of non-deductible input VAT;

- Input VAT of returned or reduced goods purchased;

- Input VAT already refunded.

Debit Balance:

Indicative of remaining deductible input VAT, input VAT awaiting refund from the State budget.

Account 133 - Deductible VAT consists of 2 sub-accounts:

- Account 1331 - Deductible VAT of goods and services: Reflects deductible input VAT of materials, goods, services purchased externally for production, trading goods, services subject to VAT computed by the deduction method.

- Account 1332 - Deductible VAT of fixed assets: Reflects the input VAT of the process of investing, purchasing fixed assets for business production, trading goods, services subject to VAT calculated using the deduction method, during the process of purchasing real estate investments.