What is the VAT rate for clean water serving everyday life in Vietnam?

What is the VAT rate for clean water serving everyday life in Vietnam?

Based on Clause 1, Article 10 of Circular 219/2013/TT-BTC as amended by Article 1 of Circular 26/2015/TT-BTC, which regulates goods and services subject to a 5% VAT rate, the following is provided:

5% VAT Rate

1. Clean water used for production and domestic purposes, excluding bottled or canned water and other beverages subject to a 10% VAT rate.

2. Ores for fertilizer production; pesticides and growth stimulants for livestock and crops include:

a) Ores for fertilizer production are raw materials for producing fertilizers, such as Apatite ores for producing phosphate fertilizers and mud for producing bio-fertilizers;

b) Pesticides including plant protection products as per the list issued by the Ministry of Agriculture and Rural Development and other pesticides;

c) Growth stimulants for livestock and crops

3. (abolished)

4. Services for digging, dredging canals, ditches, ponds for agricultural production; cultivation, care, pest control for crops; preliminary processing, preservation of agricultural products (excluding dredging canals and ditches as mentioned in Clause 3, Article 4 of this Circular).

Preliminary processing and preservation of agricultural products include drying, peeling, dehulling, cutting, milling, cold storage, salting, and other usual forms of preservation as guided in Clause 1, Article 4 of this Circular.

Therefore, according to the above regulations, the VAT rate for clean water serving everyday life is 5%.

What is the VAT rate for clean water serving everyday life in Vietnam? (Image from Internet)

When is time to calculating VAT for clean water serving everyday life in Vietnam?

According to Clause 3, Article 8 of Circular 219/2013/TT-BTC on the point of time for determining VAT, it is stipulated as follows:

Time for Determining VAT

1. For goods sales, the time is when ownership or usage rights of goods are transferred to the buyer, irrespective of whether payment has been received.

2. For service provision, it is when the service is completed or when the service invoice is issued, irrespective of whether payment has been received.

For telecommunications services, it is when the data reconciliation of connection service charges is completed according to the economic contract between telecommunications business facilities, but no later than 2 months from the month of occurrence of service charges.

3. For electricity and clean water supply, it is the day when the consumption index on the meter is recorded to be noted on the billing invoice.

4. For real estate business, construction of infrastructure, sale, transfer, or lease of houses, it depends on the collection schedule according to the project implementation progress or the payment schedule recorded in the contract. Based on the money received, the business facility declares the arising output VAT in the period.

5. For construction and installation, including shipbuilding, it is the time of inspection, handover of works, work items, construction volumes completed, irrespective of whether payment has been received.

6. For imported goods, it is the time of customs declaration registration.

Therefore, the time for determining VAT for clean water serving everyday life is the day when the consumption index on the meter is recorded to be noted on the billing invoice.

When is VAT refunded in Vietnam?

According to regulations in Article 13 of the Value Added Tax Law 2008, as amended by Clause 3, Article 1 of the Law on Amendments and Supplements to a Number of Articles of the Law on Value Added Tax, the Law on Special Consumption Tax, and the Law on Tax Administration 2016, VAT is refunded under the following circumstances:

- Business establishments paying VAT by the credit method with uncredited input VAT in the month or quarter can carry it forward to the next period.

+ If a business establishment registered to pay VAT by the credit method has a new investment project in the investing phase and has input VAT for goods and services purchased for investment that hasn't been credited, and the remaining VAT is equal to or higher than three hundred million dong, VAT will be refunded.

+ Business establishments not eligible for VAT refund will carry forward the uncredited tax amount of the investment project to the next period as per legal regulations on investment, applicable in the following cases:

(i) The investment project does not fulfill registered charter capital contributions; business in conditional sectors or industries without meeting the business conditions as per the Investment Law, or fails to maintain adequate business conditions during operation;

(ii) Investment projects for resource and mineral extraction permitted from July 1, 2016, or production projects of goods having total resource and mineral value plus energy costs of at least 51% of the product cost as per the investment project.

- Business establishments with exports in the month or quarter that have uncredited input VAT from three hundred million dong or more will be refunded VAT monthly or quarterly, except for imported goods for exportation, exported goods without exportation within the customs operation area as per the Customs Law 2014. VAT will be refunded before inspecting for taxpayers producing exported goods without violating tax, customs laws in two consecutive years, and taxpayers not considered high-risk under the Tax Administration Law 2019.

- Business establishments paying VAT by the credit method are entitled to a VAT refund when changing ownership, business conversion, merger, consolidation, division, separation, dissolution, bankruptcy, or termination with surplus VAT or uncredited input VAT.

- Business establishments receive VAT refunds according to decisions of competent authorities as provided by law and VAT refunds according to international treaties that the Socialist Republic of Vietnam is a member of.