When buying inventory in Vietnam, if the input VAT is deductible, which accounts should be recorded?

When buying inventory in Vietnam, if the input VAT is deductible, which accounts should be recorded?

Based on Clause 3 Article 19 of Circular 200/2014/TT-BTC which regulates on 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 deductible input VAT, already deducted VAT, and VAT that can still be deducted by the enterprise.

b) Accountants must separately account deductible input VAT and non-deductible input VAT. If it is not possible to account separately, then the input VAT is entered into account 133. By the end of the period, the accountant must determine the deductible and non-deductible VAT according to the law on VAT.

c) Non-deductible input VAT is included in the value of the buyd asset, the cost of goods sold, or the operating, business costs depending on specific cases.

d) Determining deductible input VAT, declaration, finalization, and tax payment must comply with the legal provisions on VAT.

2. Structure and content reflected in account 133 - Deductible VAT

Debit side:

Deductible input VAT.

Credit side:

- Deducted input VAT;
- Transfer of non-deductible input VAT;
- The input VAT of buyd goods returned, discounted;
- Refund of input VAT.

Debit balance:

Input VAT that can still be deducted, input VAT that has been refunded but not yet returned by the state budget.

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

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

- Account 1332 - Deductible VAT of fixed assets: Reflects input VAT of the process of investment, procurement of fixed assets used in production, business activities of goods, services subject to VAT calculated by the deduction method, of the process of buying investment real estate.

3. Accounting methods for some major economic transactions

3.1. When buying inventory, fixed assets, investment real estate, if the input VAT is deductible, record:

Debit to accounts 152, 153, 156, 211, 213, 217, 611 (cost excluding VAT)

Debit to Account 133 - Deductible VAT (1331, 1332)

Credit to accounts 111, 112, 331,... (total payment amount).

...

Therefore, according to the above regulation, when buying inventory, if the input VAT is deductible, debit accounts such as 152, 153, 156, 211, 213, 217, 611 (cost excluding VAT).

Also, debit Account 133 - Deductible VAT (1331, 1332). Credit to accounts 111, 112, 331,... (total payment amount).

When buying inventory in Vietnam, if the input VAT is deductible, which accounts should be recorded? (Image from the Internet)

In the annual Balance Sheet, what is the code number for deductible VAT in Vietnam?

Based on Article 112 of Circular 200/2014/TT-BTC which regulates guiding the preparation and presentation of the annual Balance Sheet as follows:

Guiding the preparation and presentation of the annual Balance Sheet

1. Preparing and presenting the Balance Sheet of an enterprise that meets the assumption of continuous operation

1.1. The purpose of the Balance Sheet

The Balance Sheet is a consolidated financial statement, reflecting the overall value of existing assets and the sources forming those assets of the enterprise at a specific time. The figures on the Balance Sheet indicate the overall asset value of the enterprise according to the structure of assets and the capital structure forming those assets. Based on the Balance Sheet, one can generally comment on and evaluate the financial situation of the enterprise.

1.2. Principles for preparing and presenting the Balance Sheet

...

1.4. Content and method of preparing indicators in the Balance Sheet of an enterprise meeting the assumption of continuous operation (Form B01-DN)

a) Short-term assets (Code 100)

...

- Short-term receivables (Code 130)

...

+ Deductible Value Added Tax (Code 152)

This indicator reflects the VAT still deductible and the VAT still refundable until the end of the fiscal year. The data for this "Deductible Value Added Tax" indicator is based on the debit balance of Account 133 "Deductible VAT".

...

Thus, according to the above regulation, in the annual Balance Sheet, the deductible VAT is under (Code 152).

What are regulations on the method of deducting VAT in Vietnam?

Based on Article 10 of the Value Added Tax Law 2008, amended by Clause 4 Article 1 of the Amended Value Added Tax Law 2013 regulated as follows:

- The deduction method for value added tax is regulated as follows:

+ The payable VAT according to the deduction method is the output VAT minus the deductible input VAT;

+ The output VAT is the total VAT of goods, services sold recorded on the VAT invoice.

VAT of goods, services sold recorded on the VAT invoice is the taxable price of goods, services subject to tax sold multiplied by the VAT rate of those goods, services.

In case of using payment documents with prices including VAT, the output VAT is determined by subtracting the taxable price from the payment price determined pursuant to point k Clause 1 Article 7 of the Value Added Tax Law 2008;

+ The deductible input VAT is the total VAT recorded on the VAT invoice for buyd goods, services, tax payment documents for imported goods meeting the conditions specified in Article 12 of the Value Added Tax Law 2008.

- The deduction method applies to business establishments that fully comply with the policies on accounting, invoices, documents according to the law on accounting, invoices, documents including:

+ Business establishments with annual revenue from selling goods, providing services from one billion or more, excluding households, individual businesses;

+ Business establishments volunteering to apply the deduction method, excluding households, individual businesses.

- the Government of Vietnam shall detail this Article.