When is the time for calculating VAT for imports in Vietnam?

When is the time for calculating VAT for imports in Vietnam?

Pursuant to Clause 6, Article 8 of Circular 219/2013/TT-BTC, the determination of value-added tax is stipulated as follows:

Time for calculating VAT

1. For the sale of goods, it is the time of transfer of ownership or right to use the goods to the buyer, regardless of whether the payment has been received.

2. For service provision, it is the time of completion of service provision or time of issuance of the service provision invoice, regardless of whether the payment has been received.

For telecommunications services, it is the time of finalizing data on telecommunications connection charges as per the economic contract between telecommunication service businesses, but not later than 2 months from the month the connection charge arises.

3. For electricity and clean water supply activities, it is the date of recording the consumption indices on the meters for invoicing.

4. For real estate business activities, infrastructure construction, and house construction for sale, transfer, or lease, it is the time of collecting money according to the project implementation progress or payment progress in the contract. Based on the collected amount, the business conducts the declaration of output VAT arising in the period.

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

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

Thus, the time to determine the value-added tax for imports is from the time of customs declaration registration.

When is the time for calculating VAT for imports in Vietnam? (Image from the Internet)

What are regulations on the taxable value of value-added tax for imports in Vietnam?

Based on Clause 2, Article 7 of Circular 219/2013/TT-BTC, the taxable value of value-added tax for imports is determined by the formula as follows:

Taxable value for imports = Import price at the border checkpoint + Import duties (if any) + Excise tax (if any) + Environmental protection tax (if any)

Additionally, in cases where imports are exempted or reduced from import duties:

Taxable value for imports = Import price + Import duties determined according to the payable tax rate after exemption or reduction

What imports are exempted to value-added tax in Vietnam?

According to Article 4 of Circular 219/2013/TT-BTC, the following imports are not subject to value-added tax:

- Breeding livestock and crop seeds are not subject to VAT if imported and traded by entities with a business registration certificate for breeding livestock and seeds issued by state management agencies.

- Newspapers, magazines, specialized bulletins, political books, textbooks, curricula, legal documents, scientific-technical books, books printed in minority languages, and propaganda pictures, including tapes or discs with recorded sound, images, electronic data; money, printing money.

- imports that cannot be domestically produced:

+ Machinery, equipment, parts, and materials imported for direct use in scientific research and technological development activities;

+ Machinery, equipment, spare parts, specific transportation means, and materials that need to be imported for oil and gas exploration, development activities;

+ Aircraft (including aircraft engines), drilling rigs, ships that are not domestically producible, imported for creating fixed assets for enterprises or rented from abroad for production, business, leasing, or subleasing.

- Weapons and military gear (including materials, machinery, equipment, spare parts) specifically used for defense and security purposes, exempted from import duties as per the Export and Import Duties Law or imported according to annual quotas approved by the Prime Minister of the Government of Vietnam.

- Goods provided as humanitarian aid, non-refundable aid confirmed by the Ministry of Finance or a financial department.

- imports as gifts to government agencies, political organizations, political-socio organizations, political professional organizations, social organizations, social-professional organizations, and people's armed units, following the legal provisions on gifts.

- imports as gifts to individuals in Vietnam, complying with the legal provisions on gifts.

- imports as belongings of foreign organizations or individuals according to diplomatic immunity according to the law on diplomatic immunities.

- imports as belongings of overseas Vietnamese returning to the country.

- imports as personal belongings within duty-free baggage allowances.

- Goods sold to foreign organizations, individuals, international organizations for humanitarian aid, non-refundable aid to Vietnam.

- Goods in transit through Vietnam's territory; temporary imports for re-export; temporary exports for re-import; imported raw materials, materials for manufacturing, processing exported goods according to production, processing contracts signed with foreign parties.

- Gold imported in the form of bars and ingots not yet processed into handicrafts, jewelry, or other products.