What method does a foreign supplier use to pay value-added tax in Vietnam?
What method does a foreign supplier use to pay value-added tax in Vietnam?
Based on point c, clause 1, Article 77 of Circular 80/2021/TT-BTC, the regulations are as follows:
Direct tax declaration and calculation by foreign suppliers
- Foreign suppliers shall directly declare tax through the General Department of Taxation's electronic portal using the electronic transaction authentication code provided by the tax authorities through the General Department of Taxation's portal and submit the electronic tax declaration dossiers to their managing tax authority, as follows:
a) Tax declaration for foreign suppliers follows quarterly declaration and payment procedures.
b) The electronic tax declaration form is in accordance with form No. 02/NCCNN issued with Appendix I of this Circular.
c) Foreign suppliers pay value-added tax and corporate income tax according to a percentage method calculated on revenue.
c.1) The revenue for value-added tax calculation is the revenue received by the foreign supplier.
c.2) The revenue for corporate income tax calculation is the revenue received by the foreign supplier.
d) The percentage for calculating value-added tax on revenue is stipulated at point b, clause 2, Article 8 of Decree No. 209/2013/ND-CP dated December 18, 2013, by the Government of Vietnam detailing and guiding the implementation of a number of articles of the Value-Added Tax Law.
đ) The percentage for calculating corporate income tax on revenue is stipulated at clause 3, Article 11 of Decree No. 218/2013/ND-CP dated December 26, 2013, by the Government of Vietnam detailing and guiding the implementation of the Corporate Income Tax Law.
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Thus, foreign suppliers pay value-added tax according to the percentage method calculated on revenue.
In which, the revenue for value-added tax calculation is the revenue received by the foreign supplier; the percentage for calculating the value-added tax on revenue is the rate as prescribed at point b, clause 2, Article 8 of Decree 209/2013/ND-CP. Specifically:
The percentage to calculate value-added tax on revenue is determined according to the following activities:
- Distribution, supply of goods: 1%;
- Services, construction without the provision of materials: 5%;
- Manufacturing, transportation, services associated with goods, construction with the provision of materials: 3%;
- Other business activities: 2%.
What method does a foreign supplier use to pay value-added tax in Vietnam? (Image from Internet)
Vietnam: What does the application for change of taxpayer registration information for foreign suppliers include?
According to clause 2, Article 76 of Circular 80/2021/TT-BTC, the regulations on the application for change of taxpayer registration information of foreign suppliers are as follows:
Direct tax registration of foreign suppliers
- Initial taxpayer registration dossier:
Foreign suppliers shall directly perform the taxpayer registration according to form No. 01/NCCNN issued with Appendix I of this Circular on the General Department of Taxation's electronic portal.
- Dossier for changing taxpayer registration information:
Foreign suppliers shall submit the dossier for changing taxpayer registration information in accordance with form No. 01-1/NCCNN issued with Appendix I of this Circular to their managing tax authority through the General Department of Taxation's electronic portal.
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Thus, the dossier for changing taxpayer registration information of foreign suppliers is the adjustment and supplementation of taxpayer registration information form No. 01/NCCNN issued with Appendix I of Circular 80/2021/TT-BTC.
Download form 01/NCCNN: Adjustment, supplementation of taxpayer registration information
What responsibilities do tax authorities have regarding the services provided by overseas suppliers in Vietnam?
According to Article 80 of Circular 80/2021/TT-BTC, the responsibilities of tax authorities in managing taxes on the services provided by overseas suppliers are as follows:
- The General Department of Taxation directly manages taxes on foreign suppliers, is responsible for assigning tax codes to foreign suppliers as prescribed, receiving tax declarations, and carrying out tasks related to tax declaration and payment by foreign suppliers.
- Update a list of foreign suppliers who directly or by proxy taxpayer registration, tax declaration on the General Department of Taxation's electronic portal.
- Coordinate with related agencies to determine and publish the names and website addresses of foreign suppliers who have not registered, declared, or paid taxes whereas goods or services transactions involve customers in Vietnam.
- Tax authorities in Vietnam have the right to cooperate with foreign tax authorities to exchange, urge foreign suppliers to declare and pay taxes; recover taxes from foreign suppliers if it can be proven that foreign suppliers declare and submit taxes incorrectly; cooperate with competent agencies to implement and apply measures in accordance with the law against foreign suppliers failing to comply with taxation obligations in Vietnam.
