What is the tax rate for roasted coffee in Vietnam?

What is the tax rate for roasted coffee in Vietnam?

Based on Clause 1, Article 4 of Circular 219/2013/TT-BTC amended by Clause 1, Article 1 of Circular 26/2015/TT-BTC which regulates the subjects not subject to VAT as follows:

Subjects not subject to VAT

1. Products from cultivation (including planted forest products), livestock, aquaculture, and seafood that have not been processed into other products or have only undergone ordinary preliminary treatment by organizations, individuals who self-produce, catch for sale, and at the import stage.

Products that have only undergone ordinary preliminary treatment are products merely cleaned, dried, shelled, milled, shelled, peeled, seed removal, branch removal, cut, salted, cold preserved (chilled, frozen), preserved with sulfur dioxide, chemical preservation to avoid spoilage, soaked in sulfur solution or other preservation solutions and other conventional forms of preservation.

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Based on Clause 5, Article 10 of Circular 219/2013/TT-BTC which regulates the tax rate of 5% as follows:

5% Tax Rate

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5. Cultivation, livestock, and aquatic products that have not undergone processing or are only preliminarily processed, preserved (according to guidelines in Clause 1, Article 4 of this Circular), at the commercial trading stage, except for cases guided in Clause 5, Article 5 of this Circular.

Unprocessed cultivation products guided in this clause include paddy, rice, corn, sweet potatoes, cassava, and wheat.

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And based on Article 11 of Circular 219/2013/TT-BTC which regulates the tax rate of 10% as follows:

10% Tax Rate

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The 10% tax rate applies to goods and services not stipulated in Articles 4, 9, and 10 of this Circular.

The VAT tax rates mentioned in Articles 10 and 11 are uniformly applied to each type of goods and services at the import, production, processing, or commercial trading stages.

However, based on Clause 5, Article 5 of Circular 219/2013/TT-BTC which provides:

Cases Not Required to Declare, Calculate VAT

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5. Enterprises, cooperatives paying VAT by the deduction method when selling unprocessed cultivation, livestock, aquatic products to enterprises, cooperatives at the commercial trading stage are not required to declare, calculate VAT. On the VAT invoice, the selling price is the price excluding VAT, the tax rate and VAT lines are not filled in, and are crossed out.

In cases where enterprises, cooperatives paying VAT by the deduction method sell unprocessed cultivation, livestock, aquatic products to other subjects such as households, business individuals, and other organizations or individuals, they must declare, calculate, and pay VAT at the tax rate of 5% as guided in Clause 5, Article 10 of this Circular.

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Therefore, the VAT rate for roasted coffee depends on the specific cases as follows:

- If roasted coffee has not been processed into other products or only undergoes ordinary preliminary treatment and is sold by enterprises, cooperatives paying VAT by the deduction method to enterprises, cooperatives at the commercial trading stage, it is not required to declare, calculate VAT.

- In the case of roasted coffee that has not been processed into other products or only undergoes ordinary preliminary treatment and is sold by enterprises, cooperatives paying VAT by the deduction method to other subjects such as households, individual businesses, and other organizations or individuals, it must be declared, calculated, and paid VAT at the rate of 5%.

What is the tax rate for roasted coffee in Vietnam? (Image from the Internet)

When is the time to determine the VAT rate in Vietnam?

Based on Article 8 of Circular 219/2013/TT-BTC which regulates the time to determine VAT as follows:

- For sales of goods, it is the time when ownership or right to use the goods is transferred to the buyer, regardless of whether payment has been received or not.

- For supply of services, it is the time the service is completed or the time the service provision invoice is issued, regardless of whether payment has been received or not.

For telecommunications services, it is the time to complete the reconciliation of service charges data according to contracts between telecommunications service businesses, but no later than 2 months from the month the service charges arise.

- For electricity and clean water supply, it is the recording date of consumption on the meter to be listed on the invoice for billing.

- For real estate business activities, infrastructure construction, house construction for sale, transfer, or lease, it is the time of receipt of payment according to project progress or payment schedule in contracts. Depending on the amount collected, the business entity declares the output VAT generated during the period.

- For construction and installation, including shipbuilding, it is the time the project, project component, construction or installation volume is accepted and delivered, regardless of whether payment has been received or not.

- For imported goods, it is the time the customs declaration is registered.

Whast goods and services are the subjects of VAT in Vietnam?

According to Article 2 of Circular 219/2013/TT-BTC, the subjects subject to VAT are as follows:

Tax Subjects

The subjects of value-added tax (VAT) are goods and services used for production, business, and consumption in Vietnam (including goods and services purchased from organizations, individuals abroad), except for the subjects not subject to VAT guided in Article 4 of this Circular.

Accordingly, the subjects of VAT are goods and services used for production, business, and consumption in Vietnam (including goods and services purchased from organizations and individuals abroad).