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?

Pursuant to the provisions in Clause 1, Article 10 of Circular 219/2013/TT-BTC amended by Clause 6, Article 1 of Circular 26/2015/TT-BTC regarding a 5% tax rate as follows:

Tax Rate 5%

1. Clean water used for production and daily activities, excluding bottled, canned, and other beverage waters subject to the 10% tax rate.

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

a) Ores for fertilizer production are raw materials like Apatite ore used for producing phosphate fertilizers, or peat used for biological fertilizers;

b) Pesticides include plant protection drugs as listed by the Ministry of Agriculture and Rural Development and other pest control drugs;

c) Growth stimulants for livestock and crops.

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Additionally, as per the guidance in Official Dispatch 72571/CTHN-TTHT in 2023 on VAT rates as follows:

According to the above regulations, clean water used for production and daily activities is subject to a 5% VAT rate as per Clause 1, Article 10 of Circular 219/2013/TT-BTC and is not eligible for VAT reduction under Decree 44/2023/ND-CP. Clean water used for production and daily activities subject to environmental protection tax will have its VAT calculated based on the selling price, which includes the environmental protection tax but excludes VAT as per Clause 1, Article 7 of Circular 219/2013/TT-BTC.

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Therefore, the clean water serving everyday life is still subject to a 5% VAT rate.

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

When is the time for determining VAT when providing clean water serving everyday life in Vietnam?

The time for determining VAT when providing clean water serving everyday life is stipulated in Clause 3, Article 8 of Circular 219/2013/TT-BTC as follows:

Time for Determining VAT

1. For goods sale, it is the time of transferring ownership or use rights of goods to the buyer, regardless of whether the money is collected.

2. For service supply, it is the time of service completion or when the service invoice is issued, regardless of whether the money is collected.

For telecommunications services, it's the time of data reconciliation for telecommunication service charges as per economic contracts among telecommunication service enterprises but no later than two months from the month the service charges arise.

3. For electricity and clean water supply activities, it is the date when electricity and water consumption is recorded on the meter to be billed.

4. For real estate business, infrastructure construction, and residential building to sell, transfer, or lease, it is the time money is collected according to the project's progress or payment schedule in the contract. Based on collected amounts, the enterprise declares VAT arising in the period.

5. For construction, installation, including shipbuilding, it is the time of acceptance and handover of work, item, or completed construction volume, regardless of whether the money is collected.

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

Thus, the time for determining VAT when providing clean water serving everyday life is the date when electricity and water usage is recorded on the meter for billing.

Where to submit VAT when providing clean water serving everyday life in Vietnam?

Where to submit VAT when providing clean water serving everyday life is regulated in Article 20 of Circular 219/2013/TT-BTC as follows:

- Taxpayers declare and submit VAT at the location of production or business.

- Taxpayers declaring and submitting VAT using the deduction method with dependent production establishments located in provinces or cities under central authority different from where the head office is located must submit VAT at both the location of the establishment and the location of the headquarters.

- In cases where enterprises or cooperatives apply the direct method and have production facilities in provinces or cities other than where the headquarters is located, or have mobile sales outside the province, they must declare and submit VAT based on a percentage of revenue for out-of-province revenue at the location of the production facility or the place of mobile sales.

Enterprises and cooperatives are not required to submit VAT based on a percentage of revenue at the headquarters for out-of-province revenue already declared and submitted.