What is the reverse VAT calculation formula in Vietnam? Where to submit VAT tax returns?

What is the reverse VAT calculation formula in Vietnam?

Calculating Forward VAT (when VAT is not included):

The formula for calculating VAT using the forward method is:

Where:

The VAT taxable price is the selling price of goods or services before VAT is added.

The VAT rate is the VAT percentage applicable to the goods or services (e.g., 5%, 10%,...).

Calculating Reverse VAT (when the selling price includes VAT):

When the selling price already includes VAT, you will need to calculate the reverse VAT to determine the tax amount to be paid. The formula for reverse VAT calculation is as follows:

Amount before tax = Amount after tax / (1 + VAT rate)

Tax amount = Amount before tax x VAT rate

The VAT rate is the percentage applicable to the goods or services.

- Cases where reverse VAT applies:

+ Pawn services.

+ All-in-one travel services (including meals, accommodation, transportation).

+ Books subject to VAT sold at face cover prices.

+ Lottery tickets, transportation tickets, stamps priced with VAT included.

What is the reverse VAT calculation formula in Vietnam? Where to submit VAT tax returns? (Image from the Internet)

What are procedures for VAT deferral in Vietnam?

According to Article 5 of Decree 64/2024/ND-CP, the specific procedure for extending the personal income tax (PIT) payment deadline is as follows:

- Taxpayers who declare and directly pay tax to the tax agency eligible for an extension should submit a Request for Extension of Taxes and Land Rent (hereinafter referred to as the Extension Request) initially or as a replacement if errors are detected (via electronic means; directly to the tax agency by paper; or through postal services) using the Form prescribed in the Appendix attached to this Decree to the directly managing tax agency for the entire tax, land rent due dates being extended following the tax return submission schedule monthly (or quarterly) as stipulated by tax management law. If the Extension Request is not submitted at the same time as the monthly (or quarterly) tax return, the latest submission deadline is September 30, 2024. The tax agency still processes the extension for taxes and land rent for periods prior to the Extension Request submission.

- If taxpayers have eligible extension amounts managed by various tax agencies, the directly managing tax agency must communicate the Extension Request to the relevant tax agencies.

- Taxpayers must determine and bear responsibility for requesting the extension, ensuring it applies to the eligible entities as per this Decree. If taxpayers submit the Extension Request to the tax agency after September 30, 2024, they are not eligible for the tax and land rent extension according to this Decree. If taxpayers supplement tax return files within the extended period resulting in higher payable amounts and submit them before the extended payment deadline, the extension includes the additional amount due to the supplementary report. If supplementation occurs after the extended payment period, the extension does not cover the additionally payable amount.

- Tax agencies are not required to notify taxpayers about accepting the tax and land rent extension. If during the extension period, the tax agency identifies that the taxpayer is not eligible for the extension, a notice will be sent to the taxpayer specifying the non-extension status, and the taxpayer must pay the full amount of tax, land rent, and late fee to the state budget. If post-extension inspections by authorized enforcement agencies reveal ineligibility for extension as per this Decree, the taxpayer must pay the remaining tax, fines, and late fees to the state budget.

- No late fee is imposed for the tax and land rent extended during the extended period (including cases where taxpayers submit an Extension Request after submitting the tax return as outlined in Clause 1 of this Article, and instances where authorized agencies determine increased payables for periods concurrently extended). If a late fee was initially calculated by the tax agency for taxes eligible for extension as per this Decree, adjustments should be made to exclude the late fee.

- Investors in projects or construction items funded by the state budget, payments from the state budget for ODA-funded projects, subject to VAT must submit a notice from the tax agency confirming receipt of the Extension Request or a certified submission by the contractor to the tax agency during payment procedures with the State Treasury. The State Treasury will defer VAT deduction during the extension period, based on the investor's submitted files. Upon the conclusion of the extension period, contractors must settle the extended tax amounts as stipulated.

Where to submit VAT tax returns in Vietnam?

According to Article 45 of Law on Tax Administration 2019, specific provisions on the location of filing tax returns are as follows:

- Taxpayers should submit their tax returns to the directly managing tax agency.

- In cases where tax returns are submitted through a one-stop-shop mechanism, the filing location follows the provisions of that mechanism.

- The filing location for export and import goods' tax returns follows the Customs Law.

- The Government of Vietnam specifies the filing locations for the following cases:

+ Taxpayers with multiple production and business activities;

+ Taxpayers with business activities in various locations; taxpayers with liable tax obligations for types declared and paid per occurrence;

+ Taxpayers with liable tax obligations related to land; licensing for water resource and mineral resource extraction;

+ Taxpayers with obligations for personal income tax finalization;

+ Taxpayers filing taxes through electronic transactions and other necessary cases.