What is the VAT rate on cane sugar in Vietnam?
What is the VAT rate on cane sugar in Vietnam?
The 5% tax rate applies to goods and services specified in Clause 2, Article 8 of the Law on Value Added Tax 2008 (supplemented by Clause 3, Article 1 of the Law on Amendments to Law on Value Added Tax 2013 and amended by Clause 2, Clause 3, Article 3 of the Law on Amendments to Various Tax Laws 2014) as follows:
Tax Rates
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2. The 5% tax rate applies to the following goods and services:
a) Clean water for production and domestic use;
b) Ore for fertilizer production; pesticides and growth stimulants for animals and plants;
c) [Repealed];
d) Services of earthwork, dredging canals, ditches, ponds, lakes for agricultural production; planting, caring for, and pest control for crops; preliminary processing, preservation of agricultural products;
đ) Unprocessed crop, livestock, and aquatic products, except for products specified in Clause 1, Article 5 of this Law;
e) Raw natural rubber; raw rosin; nets, net ropes, and yarn for weaving fishing nets;
g) Fresh food; unprocessed forest products, except wood, bamboo, and products specified in Clause 1, Article 5 of this Law;
h) Sugar*; by-products in sugar production, including molasses, bagasse, filter mud;*
i) Products made from jute, rush, bamboo, nứa, leaves, straw, coconut shells, and other handcrafted products made from agricultural resource remnants; processed cotton; newsprint paper;
k) [Repealed];
l) Medical equipment, sanitary medical pads; medicines for disease prevention and treatment; chemical and herbal products as raw materials for the production of preventive and curative medicines;
m) Teaching aids for instruction and study, including models, drawings, boards, chalk, rulers, compasses, and specialized teaching, research, and scientific experiment equipment;
n) Cultural, exhibition, sports activities; art performances, film productions; importation, distribution, and screening of films;
o) Children's toys; books of all types, except books specified in Clause 15, Article 5 of this Law;
p) Science and technology services as stipulated by the Law on Science and Technology.
According to the above regulations, cane sugar is subject to a 5% VAT rate.
What is the VAT rate on cane sugar in Vietnam? (Image from the Internet)
How to determine the taxable price for VAT on cane sugar in Vietnam?
The method for determining the taxable price for VAT on cane sugar is based on Clause 1, Article 7 of Circular 219/2013/TT-BTC as follows:
Taxable Price
1. For goods and services provided by production and business establishments, the taxable price is the sale price excluding VAT. For goods and services subject to special consumption tax, the taxable price is the sale price inclusive of special consumption tax but exclusive of VAT.
For goods subject to environmental protection tax, the taxable price is the sale price inclusive of environmental protection tax but exclusive of VAT; for goods subject to both special consumption tax and environmental protection tax, the taxable price is the sale price inclusive of special consumption tax and environmental protection tax but exclusive of VAT.
2. For imported goods, the taxable price is the import price at the border plus (+) import tax (if any), plus (+) special consumption tax (if any), plus (+) environmental protection tax (if any). The import price at the border is determined according to regulations on the taxable price of imported goods.
If the imported goods are exempted or reduced from import tax, then the taxable price for VAT is the import price plus (+) the import tax determined based on the tax amount payable after exemption or reduction.
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Hence, the taxable price for VAT on cane sugar sold by production and business establishments is the sale price excluding VAT.
When is the time for calculating VAT for cane sugar in Vietnam?
The timing for the VAT taxable event for cane sugar sold by production and business establishments is determined according to Clause 1, Article 8 of Circular 219/2013/TT-BTC as follows:
Determining the Time for VAT Liability
1. For goods sales, the time for transferring ownership or the right to use goods to the buyer is the determining time, regardless of whether the payment has been made or not.
2. For services provided, the time of service completion or the time of issuing service provision invoices is the determining time, regardless of whether the payment has been made or not.
For telecommunication services, the time for finalizing service connection charges based on the economic contract between telecommunication service providers is the determining time but must not exceed 2 months from the month in which the service connection charges arise.
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Thus, the time for VAT liability on cane sugar sold by production and business establishments is when the ownership or use rights are transferred to the buyer, regardless of whether payment has been received.
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