Vietnam: How does the hotel issue VAT invoices to customers staying from the end of 2022 to 2023?
When is the time for calculating VAT for hotel service provision?
Pursuant to the provisions of Clause 2, Article 8 of Circular 219/2013/TT-BTC on the time for calculating VAT as follows:
Time for calculating VAT
1. For goods sale, VAT shall be calculated when the ownership or the right to use goods is transferred to the buyer, whether the payment is made or not.
2. For service provision, VAT shall be calculated when service provision is completed or when the invoice for service provision is made, whether the payment is made or not.
For telecommunications services, VAT shall be calculated when comparing the data about telecommunications charge according to the contracts between telecommunications service providers, but not later than 2 months from the month in which the charge is incurred.
3. For electricity and water supply, VAT shall be calculated when the electricity or water consumption is recorded.
4. For real estate trading, construction of infrastructural works, houses for sale or for lease, VAT shall be calculated when money is collected according to the project schedule or the contract. The taxpayer shall declare output VAT incurred in the tax period according to the collected amount.
5. For construction and installation, including shipbuilding, VAT shall be calculated when the construction or a work is completed and put into use, whether the payment is made or not.
6. For imported goods, VAT shall be calculated when the customs declaration is registered.
Thus, for service provision, VAT shall be calculated when service provision is completed or when the invoice for service provision is made.
For example, if a company provides hotel services from December 20, 2022 to January 3, 2023, the time for calculating VAT is the time when the invoice for service provision is made or can be understood as the time when service provision is completed i.e. January 3, 2022.
Vietnam: How does the hotel issue VAT invoices to customers staying from the end of 2022 to 2023?
What are the regulations on the invoicing time for hotel services in Vietnam?
Pursuant to the provisions of Clause 2, Article 9 of Decree 123/2020/ND-CP on the invoicing time for service provision as follows:
Invoicing time
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2. Invoices for provision of services shall be issued upon completion of the provision of services, whether the payment of the invoiced amount is made or not. In case a service is provided with payments collected in advanced or during the provision of that service, an invoice shall be issued when each payment is collected (excluding payments of deposited amounts or advance payments which are made to ensure the execution of contracts for provision of accounting, audit, financial consulting or taxation services; valuation services; technical survey and design services; supervision consulting services; investment construction project formulation services).
Thus, the time of invoicing for the provision of hotel services is the time of completing the provision of hotel services.
For example, if a company provides hotel services from December 20, 2022 to January 3, 2023, the time of invoicing is the time to complete the provision of hotel services, which is January 3, 2022.
In case the hotel collects a deposit before or during service provision, the time of invoice is still the time of completion of the provision of hotel services.
How does the hotel issue VAT invoices to customers staying from the end of 2022 to 2023?
Pursuant to Article 1 of Decree 15/2022/ND-CP and Article 3 of Decree 15/2022/ND-CP as follows:
VAT reduction in Vietnam
1. VAT on goods and services currently subject to 10% VAT shall be reduced, except the following goods and services:
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2. VAT reduction rates
a) Business establishments that pay VAT using the credit-invoice method shall pay 8% VAT on the goods and services specified in Clause 1 of this Article.
Effect and implementation
1. This Decree comes into force from February 01, 2022.
The provisions in Article 1 of this Decree shall take effect from February 01, 2022 to December 31, 2022 inclusively.
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Pursuant to Clause 2, Article 9 of Decree 123/2020/ND-CP stipulating the time of issuing invoices for service provision and Official Dispatch 2688/BTC-TCT in 2022 guiding VAT in Decree 15/2022/ND-CP, the hotel will issue a VAT invoice in case the customer stays from the end of 2022 to 2023 as follows:
In case the company provides hotel services and the time of making tax invoices as prescribed in Clause 2, Article 9 of Decree No. 123/2020/ND-CP occurs before December 31, 2022, they are subject to tax. VAT rate of 8% as prescribed in Article 1 of Decree 15/2022/ND-CP of the Government.
In case the provision of hotel services is invoiced after December 31, 2022, it is not eligible for VAT reduction as prescribed in Article 1 of Decree 15/2022/ND-CP of the Government.
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