Vietnam: Value-added tax to be reduced for travel agents serving food service due to Covid-19 epidemic?
Value-added tax to be reduced for travel agents serving food service due to Covid-19 epidemic in Vietnam?
According to Clause 1, Article 3 of Decree 92/2021/ND-CP stipulates as follows:
Article 3. VAT reduction
1. VAT on the following goods and services shall be reduced from November 01, 2021 to the end of December 31, 2021:
a) Transport services (railway transport, waterway transport, air transport, other road transport); lodging services; food and beverage services; services of travel agencies, tourism agencies, ancillary services relevant to tour advertising and organization.
b) Publishing products and services; cinematography services, TV show production, music recording and publishing; artworks, composing, art, recreation services; services of libraries, archives, museums, other cultural activities; sport and entertainment services.
c) The detailed list of goods and services eligible for VAT reduction mentioned in Point a and Point b of this Clause is provided in Appendix 1 of this Decree. The goods and services mentioned in Point b of this Clause do not include software, goods and services that are sold online."
Vietnam: Value-added tax to be reduced for travel agents serving food service due to Covid-19 epidemic? (Image from the internet)
What are the rates of VAT reduction for travel agents serving food service in Vietnam?
According to Clause 2, Article 3 of Decree 92/2021/ND-CP stipulates as follows:
"Article 3. VAT reduction
...
2. VAT reduction rates
a) Enterprises and organizations that apply credit-invoice method to calculate VAT shall be eligible for 30% reduction in VAT rates on the goods and services specified in Clause 1 of this Article.
b) Enterprises and organizations that calculate VAT using the direct method (as a percentage (%) on revenue) shall be eligible for 30% reduction in the tax rate (%) as the basis for calculating VAT on the goods and services specified in Clause 1 of this Article."
What are the procedures of VAT reduction for travel agents serving food service in Vietnam?
According to Clause 2, Article 3 of Decree 92/2021/ND-CP stipulates as follows:
"Article 3. VAT reduction
...
3. Procedures
a) When the enterprise or organization specified in Point a Clause 2 of this Article prepares the VAT invoice for goods and services that are eligible for VAT reduction, write "mức thuế suất theo quy định (5% hoặc 10%) x 70%" ("regulatory VAT rate (5% or 10%) x 70"); the VAT amount; the total amount payable by the buyer. The seller shall declare output VAT and the buyer shall declare deduction of input VAT according to the reduced VAT written on the VAT invoice.
b) When enterprise or organization specified in Point b Clause 2 of this Article prepares the invoice for goods and services that are eligible for VAT reduction, write the amount before reduction in "Thành tiền" ("Amount") column; write 30% reduction on "Cộng tiền hàng hóa, dịch vụ" ("Total amount") line; and write "đã giảm... (số tiền) tương ứng 30% mức tỷ lệ để tính thuế giá trị gia tăng theo Nghị quyết số 406/NQ-UBTVQH15" ("reduced by ... (30%) according to Resolution No. 406/NQ-UBTVQH15").”
Note: In case an enterprise or organization sells multiple goods and services, separate VAT invoices shall be issued for goods and services that are eligible for VAT reduction.
- In case the enterprise or organization has issued an invoice and declared tax at the unreduced rate, the buyer and the seller shall prepare a record or enter a written agreement specifying the errors. The seller shall also issue a remedial invoice and provide it for the buyer. The seller shall adjust output VAT and the buyer shall adjust input VAT (if any) according to the remedial invoice.
- In case the enterprise or organization sells goods or services that are eligible for VAT reduction, have issued invoices in the form of tickets with printed prices, and wish to keep using these invoices, the enterprise or organization shall stamp the reduced prices (by 30%) beside the pre-printed prices.
- The enterprises and organizations specified in this Article shall declare goods and services that are eligible for VAT reduction according to the Appendix of Resolution No. 406/NQ-UBTVQH15 and Appendix II of this Decree together with the VAT declaration form.
Thus, value-added tax will be reduced for travel agents serving food service due to Covid-19 epidemic according to the above regulations.
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