How is the VAT rate for electronic invoices in 2023 implemented according to Resolution 43 and Decree 15?
Value Added Tax Rates for the Year 2023 on Electronic Invoices as per Resolution 43 and Decree 15: How to Implement?
On December 22, 2022, the General Department of Taxation issued Notification 620/TB-TCT of 2022 regarding the application of VAT rates on electronic invoices as per the provisions of Decree 15/2022/ND-CP based on Resolution 43/2022/QH15.
The General Department of Taxation requests organizations providing electronic invoice services (Organizations receiving, transmitting, and storing electronic invoice data and Organizations providing electronic invoice solutions) to study and upgrade their electronic invoice solutions in compliance with the VAT rate regulations for goods and services effective as per Decree 15/2022/ND-CP.
The General Department of Taxation also requests the organizations providing electronic invoice services to notify their customers of the changes to be implemented accordingly.
Hence, according to the above guidance, the VAT rate for goods and services as stipulated in Decree 15/2022/ND-CP will revert to the previously applicable rates after December 31, 2022, following existing regulations.
New Guidance on VAT Rates for 2023 on Electronic Invoices as per Resolution 43 and Decree 15?
What are the Value Added Tax Rates for the Year 2023?
Previously, to implement the regulation on reducing VAT rates as per Resolution 43/2022/QH15 of the National Assembly on fiscal and monetary policies supporting the Economic and Social Recovery and Development Program, on January 28, 2022, the Government of Vietnam issued Decree 15/2022/ND-CP guiding the reduction of VAT on certain groups of goods and services applicable from February 1, 2022, until December 31, 2022.
- The VAT rate reduction was specifically 8% for businesses calculating VAT by the deduction method.
- For businesses (including household businesses and individual businesses) calculating VAT by the percentage method on revenue, a 20% reduction in the percentage rate used to calculate VAT was applied when issuing invoices.
However, after December 31, 2022, the VAT rate is expected to return to normal until the Government of Vietnam makes a new decision on extending VAT reductions or not.
The anticipated VAT rates for 2023:
- A 0% VAT rate applies to exported goods and services, international transportation, and goods and services not subject to VAT as specified in Article 5 of the 2008 VAT Law when exported, except for cases where it is not applicable as per Clause 3, Article 1 of the 2013 amended VAT Law.
- A 5% VAT rate applies to goods and services specified in Clause 2, Article 8 of the 2008 VAT Law (as amended by Clause 3, Article 1 of the 2013 amended VAT Law, Clause 2, Article 3 of the 2014 Law amending various Tax Laws)
- A 10% VAT rate applies to goods and services not subject to the 0% and 5% rates.
Who is required to pay Value Added Tax?
According to Clause 1, Article 2 of Decree 209/2013/ND-CP and Clause 2, Article 2 of Decree 209/2013/ND-CP, taxpayers subject to VAT are defined as follows:
- VAT taxpayers are organizations and individuals producing, trading goods and services subject to VAT (hereinafter referred to as business establishments) and organizations and individuals importing goods subject to VAT.
- Organizations and individuals producing and trading in Vietnam purchasing services (including cases where services are associated with goods) from foreign organizations without a permanent establishment in Vietnam, and non-resident foreigners, are the taxpayers, except for cases not required to declare, calculate, and pay VAT as stipulated in Point b, Clause 3 of this Article.
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