Does the company providing computer warranty services applying the deduction method fall under the subject of value-added tax reduction?
Regulations on subjects and tax rates eligible for value-added tax reduction
According to Official Dispatch 32314/CTHN-TTHT in 2022 on tax policy according to Decree 15/2022/ND-CP issued by the Hanoi Tax Department, the guidelines are as follows:
Based on Decree 15/2022/ND-CP, dated January 28, 2022, of the Government of Vietnam, prescribing tax exemption and reduction policies in accordance with Resolution 43/2022/QH15 of the National Assembly on fiscal and monetary policies supporting the program of socio-economic recovery and development:
+ Article 1 stipulates the reduction of value-added tax:
"Article 1. Reduction of value-added tax
“1. Value-added tax reduction for groups of goods and services currently applying the tax rate of 10%, except for the following groups of goods and services:
a) Telecommunications, financial, banking, securities, insurance activities, real estate business, metals and products from pre-fabricated metal, mineral products (excluding coal mining), coke, refined petroleum, chemical products. Details are in Appendix I issued together with this Decree.
b) Products and services subject to special consumption tax. Details are in Appendix II issued together with this Decree.
c) Information technology as prescribed by information technology law. Details are in Appendix III issued together with this Decree.
d) The reduction of value-added tax for each type of goods and services specified in Clause 1 of this Article is uniformly applied at the import, production, processing, and commercial business stages. For extracted coal products sold (including cases where coal is extracted, then screened and classified according to a closed process, then sold), which are subject to value-added tax reduction. Other stages other than extraction and sale are not eligible for value-added tax reduction for coal products as per Appendix I of this Decree.
Goods and services listed in Appendices I, II, and III issued together with this Decree that are not subject to value-added tax or subject to the 5% value-added tax according to the Law on Value-Added Tax should comply with the Law on Value-Added Tax and are not eligible for value-added tax reduction.
2. Value-added tax reduction rate
a) Businesses calculating value-added tax by the credit method will apply an 8% value-added tax rate for goods and services specified in Clause 1 of this Article.
b) Businesses (including business households and individuals) calculating value-added tax by the percentage method on revenue will apply a 20% reduction of the percentage for calculating value-added tax when issuing invoices for goods and services subject to value-added tax reduction specified in Clause 1 of this Article.
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4. Businesses must issue separate invoices for goods and services eligible for value-added tax reduction. If businesses do not issue separate invoices for goods and services eligible for value-added tax reduction, they will not be entitled to the value-added tax reduction... ”
Does a computer warranty service provider qualify for value-added tax reduction under the credit method? (Image from the internet)
Regulations on invoicing for companies providing services with different tax rates
According to Official Dispatch 32314/CTHN-TTHT in 2022 on tax policy according to Decree 15/2022/ND-CP issued by the Hanoi Tax Department, the guidelines are as follows:
Based on Decree 41/2022/ND-CP amending and supplementing some articles of Decree 123/2020/ND-CP dated October 19, 2020, of the Government of Vietnam on invoices and documents, and Decree 15/2022/ND-CP dated January 28, 2022, of the Government of Vietnam prescribing tax exemption and reduction policies in accordance with Resolution 43/2022/QH15 of the National Assembly on fiscal and monetary policies supporting the program of socio-economic recovery and development:
- Article 2 Amendments and supplements Clause 4 Article 1 of Decree 15/2022/ND-CP dated January 28, 2022, of the Government of Vietnam on policies of tax exemption and reduction according to Resolution 43/2022/QH15 of the National Assembly on fiscal and monetary policies supporting the program of socio-economic recovery and development:
+ In case a business entity as specified in Point a Clause 2 of this Article sells goods or provides services at different tax rates, the value-added tax invoice must specify the tax rate of each goods or service as required in Clause 3 of this Article.
+ In case a business entity as specified in Point b Clause 2 of this Article sells goods or provides services, the sales invoice must clearly state the reduced amount according to the provision in Clause 3 of this Article.
Does a company providing warranty services for computers and applying value-added tax using the credit method qualify for tax reduction?
According to Official Dispatch 32314/CTHN-TTHT in 2022 on tax policy according to Decree 15/2022/ND-CP issued by the Hanoi Tax Department, the guidelines are as follows:
- Based on the above regulations, in the case where a Company calculates VAT using the credit method and provides warranty services for computers, servers, storage devices, and switching equipment (applying the 10% VAT rate) not stated in Appendices I, II, and III issued with Decree 15/2022/ND-CP dated January 28, 2022, of the Government of Vietnam, such company is eligible to apply the 8% VAT rate from February 1, 2022, to December 31, 2022, per Article 1 of Decree 15/2022/ND-CP.
- Goods and services listed in Appendices I, II, and III attached to Decree 15/2022/ND-CP are not eligible for VAT reduction. If such a company provides services with different tax rates, the value-added tax invoice must specify the tax rates of each goods or service under Article 2 of Decree 41/2022/ND-CP.
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