Which entities are VAT payers in Vietnam? Where is the place to submit VAT declarations in Vietnam?

Where is the place to submit VAT declarations in Vietnam?

VAT is also known as Value Added Tax

According to Article 45 of the Law on Tax Administration 2019, the places to submit VAT declarations are regulated as follows:

- Taxpayers shall submit tax declaration dossiers to their directly managing tax authorities.

- In case tax declarations are submitted under the one-stop shop mechanism, the place to submit the tax declarations shall follow the regulations of that mechanism.

- The place to submit tax declarations for exported or imported goods shall be as prescribed by the Law on Customs.

- The Government of Vietnam regulates the places for submitting tax declarations for the following cases:

+ Taxpayers with multiple production and business activities;

+ Taxpayers conducting production and business activities in multiple locations; taxpayers with tax obligations for types of taxes declared and paid each occurrence;

+ Taxpayers with arising tax obligations for revenues from land; granting rights to exploit water resources, mineral resources;

+ Taxpayers with arising obligations for personal income tax finalization;

+ Taxpayers declaring tax through electronic transactions and other necessary cases.

Which entities are VAT payers in Vietnam? Where is the place to submit VAT declarations in Vietnam? (Image from the Internet)

Which entities are VAT payers in Vietnam?

According to Article 4 of the Law on Value Added Tax 2008, the detailed regulations are as follows:

Taxpayers

Value Added Tax taxpayers are organizations and individuals producing, trading goods, and providing services subject to Value Added Tax (hereinafter referred to as business establishments) and organizations and individuals importing goods subject to Value Added Tax (hereinafter referred to as importers).

Through the above regulations, consumers are the ones who ultimately bear the actual VAT because they are the final payers of this tax when purchasing goods or services. However, business establishments are the ones remitting VAT to the state. They collect the tax from consumers and subsequently submit it to the tax authorities.

Vietnam: What is the reverse VAT calculation formula (when the selling price includes VAT)?

When the selling price already includes VAT, reverse VAT calculation is required to determine the amount of tax payable. The reverse VAT calculation formula is as follows:

Pre-tax amount = Post-tax amount / (1 + VAT rate)

Tax amount = Pre-tax amount x VAT rate

The tax rate is the VAT rate applied to goods or services.

- Cases of applying reverse VAT include:

+ Pawn services.

+ Package tourism services (including meals, accommodations, transportation).

+ Various taxable books sold at printed cover prices.

+ Various lottery tickets, transportation tickets, and stamps with prices that include VAT.

Note: The reverse VAT calculation formula above is for reference only.

Procedure for Extending the Deadline for VAT Payment?

According to Article 5 of Decree 64/2024/ND-CP, the specific procedures for extending the deadline for VAT payment are as follows:

- Taxpayers directly declaring, paying taxes with tax authorities are eligible for extension, must submit a Request for Tax Payment Extension and land rent (hereinafter referred to as Request for Extension) initially or as a replacement when errors are detected (electronically; direct submission of paper documents to the tax authority, or by postal service) according to the form in the appendix promulgated with this Decree to the directly managing tax authority once for the total tax, land rent arising in the taxable periods extended at the same time as submitting monthly (or quarterly) tax declarations as per tax administration laws. If the Request for Extension is not submitted concurrently with the tax declaration filing time of the month (or quarter), the latest deadline is September 30, 2024, the tax agency will still extend the tax and land rent for the periods arising before submitting the Request for Extension.

- In cases where taxpayers have extended items in various locations managed by different tax authorities, the directly managing tax office is responsible for communicating the Request for Extension information with relevant managing tax authorities.

- Taxpayers must self-determine and assume responsibility for correctly requesting extensions in accordance with this Decree. If taxpayers submit the Request for Extension to the tax authority after September 30, 2024, they will not qualify for a tax and land rent extension according to the provisions of this Decree. In cases where taxpayers amend their tax declaration for the period entitled to extension, resulting in an increased amount owed, and they submit it to the tax agency before the extended deadline, the extended tax includes the additional amount owed due to declaration amendment. If taxpayers amend tax declarations for the period entitled to extension after the extended tax deadline, the additional amount owed from such amendment will not be extended.

- Tax authorities do not need to notify taxpayers about accepting tax and land rent extensions. In instances where during the extension period, tax authorities ascertain taxpayers do not fall under extension categories, they will issue a notice to taxpayers about non-extension, requiring them to remit full required tax, land rent and late payment amounts for the intervening period into the state treasury. Post-extension periods found through audits or inspections, where authoritative bodies recognize taxpayers not within the extent of the extension under this Decree, require taxpayers to deposit the shortfall taxes, fines, and late fees into the state budget.

- No late payment fees are calculated for tax, land rent amounts extended within the authorized extension period (including cases where taxpayers submit Requests for Extension post submitting tax declaration dossiers as per clause 1 of this Article, or cases where authorized bodies identify taxpayers eligible for extension with an increased amount owed for extended taxable periods). If tax authorities have calculated late payment fees (if any) for tax dossiers subject to extension under this Decree’s provisions, the tax authority will adjust and not calculate late payment fees.

- Contractors of basic construction works funded with state budget capital, payment from the state budget for basic construction of projects using ODA capital subject to VAT when processing payments with the State Treasury must enclose notification of the tax authority having received the Request for Extension or the Request for Extension with confirmation of submission to the contractor’s tax authority. The State Treasury bases itself on the documentation submitted by the investors to postpone VAT deduction during the extension period. At the expiry of the extension, contractors must remit the entire VAT amount extended as prescribed.