What are 08 prohibited acts in tax deduction and tax refund in Vietnam from July 01, 2025?

What are 08 prohibited acts in tax deduction and tax refund in Vietnam from July 01, 2025?

Pursuant to Article 13 of the Value Added Tax Law 2024, specific regulations on prohibited acts in tax deduction and tax refund are as follows:

[1] Buying, giving, selling, advertising, acting as an intermediary in buying or selling invoices.

[2] Creating fictitious transactions of buying or selling goods, providing services, or unlawful transactions.

[3] Issuing invoices for selling goods, providing services during a temporary business suspension period, except in cases where invoices are issued to customers to fulfill contracts signed before the business suspension notice.

[4] Using illegal invoices and documents or misusing invoices and documents in accordance with the regulations of the Government of Vietnam.

[5] Failing to transfer electronic invoice data to the tax authority as prescribed.

[6] Altering, misusing, unauthorized access, or destroying information systems related to invoices and documents.

[7] Offering, accepting, or acting as an intermediary in bribery, or conducting other acts related to invoices and documents to obtain tax deductions, tax refunds, embezzle tax funds, or evade value-added tax.

[8] Colluding, covering up; liaising between tax management officials, tax authorities, and businesses, importers, or among businesses and importers in using illegal invoices and documents, or misusing invoices and documents to obtain tax deductions, tax refunds, embezzle tax funds, or evade value-added tax.

What are 08 prohibited acts in tax deduction and tax refund in Vietnam from July 01, 2025? (Image from Internet)

How will the tax deduction method be applied in Vietnam from July 01, 2025?

Pursuant to Clauses 1 and 2 of Article 11 of the Value Added Tax Law 2024, specific regulations on the tax deduction method are as follows:

- The value-added tax to be paid under the tax deduction method is the output value-added tax minus the input value-added tax that is deductible;

- Output value-added tax is the total value-added tax on goods and services sold as recorded on the value-added tax invoice.

+ The value-added tax on goods and services sold as recorded on the value-added tax invoice is calculated by multiplying the taxable value of goods and services sold by the applicable value-added tax rate.

+ In cases where invoices show the price including value-added tax, the output value-added tax is determined by subtracting the taxable value-added tax calculated as prescribed in point k, clause 1, Article 7 of the Value Added Tax Law 2024;

- The input value-added tax that is deductible is the total value-added tax recorded on invoices for purchasing goods and services, tax payment vouchers for imported goods, or tax payment vouchers for purchasing services as prescribed in Clauses 3 and 4, Article 4 of this Law and meeting the conditions stipulated in Article 14 of the Value Added Tax Law 2024.

- The tax deduction method applies to businesses that fully implement accounting, invoicing, and documentation policies in accordance with the legal regulations on accounting, invoicing, and documentation, including:

+ Businesses with an annual revenue of 1 billion VND or more from goods sales, service provision, excluding households and individuals engaged in production and business;

+ Businesses voluntarily applying the tax deduction method, excluding households and individuals engaged in production and business;

+ Foreign organizations and individuals providing goods and services in the exploration, development, and exploitation activities of oil and gas fields, paying tax under the tax deduction method declared, deducted, and paid on their behalf by Vietnamese entities.

What are regulations on direct value-added tax calculation method in Vietnam from July 01, 2025?

Pursuant to Article 12 of the Value Added Tax Law 2024, specific regulations on the direct calculation method for value-added tax are as follows:

- The value-added tax payable under the direct calculation method on added value is determined by multiplying the added value by the applicable value-added tax rate for activities of buying, selling, and processing gold, silver, and gemstones.

+ The added value of buying, selling, and processing gold, silver, and gemstones is determined by subtracting the purchasing price from the selling price of the respective gold, silver, and gemstones.

+ In cases where the business has activities of buying, selling, and processing gold, silver, and gemstones, the business must account separately for this activity to pay tax under the direct calculation method on added value.

- The value-added tax payable under the direct calculation method based on revenue is determined by multiplying the revenue by the applicable percentage rate as follows:

+ Applicable entities include:

++ Enterprises, cooperatives, and cooperative alliances with annual revenues below the 1 billion VND threshold, except those voluntarily applying the tax deduction method prescribed in Clause 2, Article 11 of the Value Added Tax Law 2024;

++ Households and individuals engaged in production and business, except as provided in Clause 3, Article 12 of the Value Added Tax Law 2024;

++ Foreign organizations without a permanent establishment in Vietnam, non-resident individuals with revenue arising in Vietnam that have not fully implemented accounting, invoicing, and documentation policies, excluding foreign suppliers as defined in Clause 4, Article 4 of the Value Added Tax Law 2024;

++ Other organizations, except those paying tax under the tax deduction method as prescribed in Clause 2, Article 11 of the Value Added Tax Law 2024;

+ Percentage rates for calculating value-added tax are determined as follows:

++ Distribution, supply of goods: 1%;

++ Services, construction without material supply: 5%;

++ Production, transportation, services associated with goods, construction with material supply: 3%;

++ Other business activities: 2%;

+ Revenue for calculating value-added tax is the total amount for selling goods and services as recorded on the sales invoice, including surcharges and additional fees that the business is entitled to receive.

- Households and individuals engaged in production and business activities that do not implement or do not fully implement accounting, invoicing, and documentation policies as prescribed by law shall pay value-added tax by the presumptive tax method as stipulated in the Tax Administration Law 2019.