What is the latest EVN power purchase agreement template in Vietnam? What is the current VAT rate for domestic electricity?
What is the latest EVN power purchase agreement template in Vietnam?
The power purchase agreement template with EVN (Standard Wholesale power purchase agreement) is stipulated in the annex issued with Circular 26/2024/TT-BCT.
The power purchase agreement template with EVN is as follows:
Download the latest power purchase agreement template with EVN in Word format download
What is the latest EVN power purchase agreement template in Vietnam? What is the current VAT rate for domestic electricity? (Image from the Internet)
What is the current VAT rate for domestic electricity in Vietnam?
Based on Article 3 of the Law on Value Added Tax 2008, which stipulates that goods and services used for production, business, and consumption in Vietnam are subject to value-added tax, except for cases specified in Article 5 of the Law on Value Added Tax 2008.
According to the above regulations, electricity (whether household or business electricity) is subject to VAT.
Additionally, based on Article 8 of the Law on Value Added Tax 2008 (as amended by clause 3, Article 1 of the Amended Law on Value Added Tax 2013, clause 2, Article 3 of the Law Amending Several Tax Laws 2014, and clause 2, Article 1 of the Law on Value Added Tax, Special Consumption Tax, and Tax Administration Amendments 2016), the current VAT rates are stipulated at 3 levels as follows:
- A VAT rate of 0% applies to exported goods and services (according to international practice).
- A VAT rate of 5% applies to essential goods and services for daily life and inputs used for agricultural production.
- A VAT rate of 10% applies to all other regular goods and services.
Thus, electricity (whether household or business) is subject to a VAT rate of 10%.
Furthermore, according to Article 1 of Decree 180/2024/ND-CP, the VAT reduction is regulated as follows:
Reduction of Value Added Tax
1. Reduction in value-added tax for groups of goods and services currently subject to a 10% VAT rate, except for the following goods and services groups:
a) Telecommunications, financial activities, banking, securities, insurance, real estate business, metals and metal products excluding finished products, mineral products excluding coal mining, coke, refined petroleum, chemical products. Details in Appendix I issued with this Decree.
b) Products and services subject to special consumption tax. Details in Appendix II issued with this Decree.
c) Information technology according to information technology law. Details in Appendix III issued with this Decree.
d) The VAT reduction is uniformly applied at the import, production, processing, and commercial stages for each type of goods and service specified in clause 1 of this Article. Coal extracted and sold (including cases where coal is extracted, then sieved, classified in a closed process before being sold) is subject to a VAT reduction. Coal items listed in Appendix I issued with this Decree are not eligible for VAT reduction at stages other than extraction and sale.
Economic corporations or groups applying closed processes to extract and sell coal are also subjects for VAT reduction for extracted and sold coal.
For goods and services listed in Appendices I, II, and III issued with this Decree, if they are not subject to VAT or are subject to a 5% VAT rate according to the Law on Value Added Tax, they must comply with the Law on Value Added Tax and are not eligible for VAT reduction.
- VAT reduction levels
a) Business establishments calculating VAT by deduction method can apply a VAT rate of 8% for goods and services specified in clause 1 of this Article.
b) Business establishments (including business households, individuals) calculating VAT by the percentage method on revenue may reduce the percentage rate for VAT calculation by 20% when invoicing goods and services eligible for VAT reduction specified in clause 1 of this Article.
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Therefore, according to the above regulations, electricity is eligible for a VAT reduction, making the VAT rate for domestic electricity 8%.
What are cases of VAT refund in Vietnam?
Based on Article 13 of the Law on Value Added Tax 2008 (as amended by clause 7, Article 1 of the Amended Law on Value Added Tax 2013 and clause 3, Article 1 of the Law on Value Added Tax, Special Consumption Tax, and Tax Administration Amendments 2016), VAT refunds are authorized in the following cases:
- Business entities applying the VAT deduction method with uncredited input VAT in a month or quarter may carry over to the next period.
Business entities registered for VAT deduction with new investment projects in the investment phase with uncredited input VAT for purchases used in investment and remaining VAT of 300 million VND or more are eligible for a VAT refund.
Business entities not eligible for VAT refunds can carry forward uncredited VAT amounts of the investment project to the subsequent period according to investment laws in cases of:
+ Investment projects failing to contribute sufficient charter capital as registered; engaging in conditional business sectors without meeting the conditions specified in the Investment Law or not maintaining the necessary business conditions during operations;
+ Resource extraction investment projects licensed from July 1, 2016, or manufacturing goods with resource costs and energy expenses accounting for over 51% of production cost according to the investment project.
- Business entities during a month or quarter exporting goods and services with uncredited input VAT of 300 million VND or more are eligible for monthly or quarterly VAT refunds, except imported goods for export, or exported goods not fulfilling customs export criteria specified by the Customs Law 2014.
Implement refund first, audit later for exporters with no tax or customs law violations for two consecutive years; taxpayers not classified as high-risk according to the Tax Administration Law 2019.
- Business entities applying VAT deduction eligible for VAT refunds upon ownership change, business transformation, merger, consolidation, splitting, dissolution, bankruptcy, or cessation of operation with excessive VAT payment or input VAT not fully credited.
- Foreigners, overseas Vietnamese with a passport or entry document issued by foreign authorities can receive VAT refunds on goods purchased in Vietnam taken upon exit.
- VAT refunds for programs, projects using non-refundable official development assistance (ODA) or non-refundable aid, humanitarian aid are regulated as follows:
+ Program/project owners or primary contractors, organizations designated by foreign donor authorities managing programs/projects using non-refundable ODA are refunded VAT paid for goods/services purchased in Vietnam for these programs/projects;
+ Organizations in Vietnam using non-refundable aid from individuals, foreign organizations for goods/services for non-refundable aid, humanitarian aid programs/projects in Vietnam can claim refunded VAT paid for these goods/services.
- Diplomatic privilege objects as per diplomatic immunity laws purchasing goods/services in Vietnam for use can claim VAT refunds on VAT-stated invoices or payment documents calculated with VAT included.
- Business entities or companies receiving VAT refund decisions from competent authorities in accordance with the law and cases of VAT refund under international treaties where the Socialist Republic of Vietnam is a member.
