Which fixed assets are not required to declare, calculate, and pay value-added tax in Vietnam?

What types of fixed assets are there in Vietnam?

According to Article 2 of Circular 45/2013/TT-BTC, the following types of fixed assets are stipulated:

(1) Tangible fixed assets: These are the primary means of labor with a physical form that satisfy the criteria of tangible fixed assets, involved in numerous business cycles but retaining their original physical form.

Examples:

- Buildings and structures: Warehouses, production workshops.

- Machinery and equipment: Printers, processing equipment.

- Transport and transmission means: Trucks, cars, oil pipelines.

- Management equipment and tools: Office computers, file cabinets.

(2) Intangible fixed assets: These are assets without a specific physical form but carry economic value, invested in and meeting the criteria of intangible fixed assets, involved in numerous business cycles.

Examples:

- Costs directly related to land use;

- Costs for publishing rights, patents, copyrights...

(3) Fixed assets of financial leasing: These are fixed assets that enterprises lease from finance leasing companies. At the end of the lease term, the lessee has the option to purchase the leased asset or continue renting under conditions agreed in the finance lease agreement.

The total leasing payment for an asset as stipulated in the finance lease contract must be at least equivalent to the value of that asset at the time of signing the contract.

Any leased fixed assets that do not meet the above regulations are considered operating lease fixed assets.

(4) Similar fixed assets: These are fixed assets with similar functions in the same business field and have equivalent value.

Which fixed assets are not required to declare, calculate, and pay value-added tax in Vietnam? (Image from the Internet)

Which fixed assets are not required to declare, calculate, and pay value-added tax in Vietnam?

According to Article 5 of Circular 219/2013/TT-BTC, fixed assets are not required to declare, calculate, and pay value-added tax (VAT) in the following cases:

- Fixed assets transferred between member units with 100% capital ownership.

Fixed assets in use, having undergone depreciation when transferred according to the book value between a business establishment and member units owned by a 100% capital business establishment, or between member units owned by a 100% capital business establishment, for production, business activities subject to VAT, do not require invoicing and VAT declaration, payment.

The business establishment with transferred fixed assets must have a Decision or Order of asset transfer accompanied by asset origin documents.

In cases where fixed assets, upon transfer, have been re-evaluated for asset value or transferred to non-VAT business establishments, VAT invoices must be issued, and VAT must be declared and paid as required.

- Fixed assets used as capital contributions to establish an enterprise.

Note that assets contributed to a business must have: minutes of business capital contribution, joint venture contracts, minutes of asset valuation by the Capital Contribution Receiving Board of all contributing parties (or a valuation document from a legally assigned valuation organization), and asset origin documents.

Example: Contributing cars or production equipment to establish a new company.

- Fixed assets transferred between dependent accounting units within an enterprise; assets transferred due to division, separation, merger, consolidation, change of enterprise form.

Assets transferred between dependent accounting units of the business establishment; assets transferred due to division, separation, merger, consolidation, change of enterprise form must have an asset transfer order and asset origin documents and are not required to issue invoices.

In cases where assets are transferred between independent accounting units or between member units with full legal entities within the same business establishment, the business establishment with the transferred assets must issue VAT invoices and declare, pay VAT as regulated, except for fixed assets transferred between member units with 100% capital ownership.

What are taxable prices for fixed assets manufactured by enterprises in Vietnam?

As per Clause 4, Article 7 of Circular 219/2013/TT-BTC (Amended by Clause 2, Article 3 of Circular 119/2014/TT-BTC), it states:

Tax base

...

4. The tax base for internal consumption products, goods, services.

Internally circulating goods, such as goods dispatched for internal warehousing, materials, semi-finished products for continued production within a manufacturing, business establishment or goods, services utilized for business activity by a business establishment are not subject to VAT calculation and payment.

In cases where a business establishment self-produces, constructs fixed assets (self-made fixed assets) for goods, services subject to VAT, upon completion, acceptance, and handover, the business establishment does not need to issue invoices. Input VAT for self-made fixed assets is declared and deducted as per regulations.

In cases of dispatching machinery, equipment, materials, goods in forms of lending, borrowing, or returning, if there are contracts and relevant documents pertinent to the transaction, the business establishment does not need to issue invoices, calculate, and pay VAT.

Therefore, for fixed assets created by the business establishment for use in the production, business of goods, services subject to value-added tax, upon completion, acceptance, and transfer, the business establishment is not required to issue an invoice.

Input value-added tax that forms the self-made fixed assets is declared and deducted in accordance with regulations.