What is the use purpose of account 133 - Deductible VAT in Vietnam? How many sub-accounts are there?

What is the use purpose of Account 133 - Deductible VAT in Vietnam?

Pursuant to the provisions of Clause 1, Article 19 of Circular 200/2014/TT-BTC regarding Account 133 – Deductible Value Added Tax as follows:

Account 133 – Deductible Value Added Tax

1. Accounting Principles

a) This account is used to reflect the input VAT that is deductible, has been deducted, and is still deductible for the enterprise.

b) Accountants must separately account for deductible input VAT and non-deductible input VAT. If it is not possible to account for them separately, the input VAT shall be accounted under account 133. At the end of the period, accountants must determine the amount of VAT that is deductible and non-deductible in accordance with VAT regulations.

c) Non-deductible input VAT is calculated into the value of purchased assets, cost of goods sold, or production and business expenses depending on specific cases.

d) The determination of deductible input VAT, declaration, finalization, and payment of taxes must comply with VAT law.

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Therefore, Account 133 - Deductible VAT is used to reflect the input VAT that is deductible, has been deducted, and is still deductible for the enterprise.

What is the use purpose of account 133 - Deductible VAT in Vietnam? How many sub-accounts are there? (Image from Internet)

Vietnam: How many sub-accounts does Account 133 - Deductible VAT have?

The structure and contents of Account 133 – Deductible Value Added Tax are stipulated in Clause 2, Article 19 of Circular 200/2014/TT-BTC as follows:

Account 133 – Deductible Value Added Tax

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2. Structure and Contents of Account 133 - Deductible VAT

Debit Side:

- Deductible input VAT.

Credit Side:

- Deducted input VAT;

- Transfer of non-deductible input VAT;

- Input VAT on purchased goods returned or discounted;

- Refunded input VAT.

Debit Balance:

- Deductible input VAT, refunded input VAT not yet reimbursed by the state budget.

Account 133 - Deductible VAT has 2 sub-accounts:

- Account 1331 - Deductible VAT on goods and services: Reflects deductible input VAT on external purchases of materials, goods, services used for the production and business of goods and services subject to VAT by the deduction method.

- Account 1332 - Deductible VAT on fixed assets: Reflects input VAT during the investment and procurement of fixed assets used in production and business of goods and services subject to VAT by the deduction method, including the procurement of investment real estate.

Therefore, Account 133 - Deductible VAT has 2 sub-accounts:

- Account 1331 - Deductible VAT on goods and services: Reflects deductible input VAT on external purchases of materials, goods, services used for the production and business of goods and services subject to VAT by the deduction method.

- Account 1332 - Deductible VAT on fixed assets: Reflects input VAT during the investment and procurement of fixed assets used in production and business of goods and services subject to VAT by the deduction method, including the procurement of investment real estate.

Which entities apply the VAT deduction method in Vietnam?

Based on the provisions of Clause 1, Article 12 of Circular 219/2013/TT-BTC, the VAT deduction method is applied to business entities that fully implement accounting policies, invoices, and documentation as prescribed by law regarding accounting, invoices, and documentation, which include:

- Business entities currently operating with annual revenue from the sale of goods and provision of services from one billion dong or more and fully implementing accounting policies, invoices, and documentation as prescribed by law regarding accounting, invoices, and documentation, except households, individual businesses paying tax by the direct method guided in Article 13 of Circular 219/2013/TT-BTC (Clause 1 of this Article is amended by Clause 4, Article 3 of Circular 119/2014/TT-BTC);

- Business entities that voluntarily register to apply the VAT deduction method, except households, individual businesses paying tax by the direct method guided in Article 13 of Circular 219/2013/TT-BTC (Clause 1 of this Article is amended by Clause 4, Article 3 of Circular 119/2014/TT-BTC)

- Foreign organizations, individuals supplying goods, services to conduct exploration, development, and exploitation of oil and gas shall pay tax by the deduction method with the Vietnamese party declaring and paying on their behalf.