Latest guidance on invoicing for VAT reduction of 8% between 02 periods of VAT reduction in Vietnam in 2022 and 2023?
Latest guidance on invoicing for VAT reduction of 8% between 02 periods of VAT reduction in Vietnam in 2022 and 2023?
Recently, the General Department of Taxation of Vietnam issued Official Dispatch No. 2121/TCT-CS in 2023 guiding a number of cases on invoicing for VAT reduction of 8% as follows:
- In case goods and services are eligible for VAT reduction under Decree No. 15/2022/ND-CP, after December 31, 2022, errors are detected, they must issue invoices for adjustment or replacement without affecting affecting the amount of goods and VAT payable or adjustment of the tax calculation price, the adjusted or replaced invoice shall apply the VAT rate of 8%; Where errors in quantity of goods lead to errors in goods and VAT, the adjusted or replaced invoice shall apply the VAT rate prescribed at the time of making the adjusted or replaced invoice.
- In case the goods were purchased before January 1, 2023 at the tax rate of 8%, after December 31, 2022, the buyer returns the goods due to improper specifications and quality, the seller shall issue an invoice to return the goods to reduce or replace the invoice already made with the VAT rate of 8%, the seller and the buyer have an agreement to clearly state the returned goods.
- In case the business establishment applies the form of commercial discount for customers and for the commercial discount of goods eligible for VAT reduction at the rate of 8%, sold in 2022 but from January 1, 2023, when an invoice showing the content of commercial discount is issued, then:
+ In case the discount amount is made on the last purchase or the next period after December 31, 2022, the discount amount of the sold goods is calculated and adjusted at the taxable price content, the tax rate shall comply with the current law at the time of making the invoice.
+ In case the discount amount is made at the end of the discount program (period) after December 31, 2022, the seller shall issue an adjusted invoice and apply the VAT rate of 8% at the time of sale.
- In case a business establishment sells goods or provides services (subject to VAT reduction according to Decree No. 15/2022/ND-CP) but after December 31, 2022, the business establishment will issue an invoice for with sales of goods and services arising from February 1, 2022 to December 31, 2022 and construction and installation activities with the time of acceptance, handover of works, work items, completed construction and installation volumes, regardless of whether money has been collected or not, is determined from February 1, 2022 to the end of December 31, 2022 but after December 31, 2022, new business establishments that issue invoices for revenue from construction and installation that have been tested, accepted, and handed over will fall into the case of making invoices at the wrong time and are entitled to VAT reduction according to Decree No. 15/2022/ND-CP and be administratively sanctioned for the act of making invoices at the wrong time.
Latest guidance on invoicing for VAT reduction of 8% between 02 periods of VAT reduction in Vietnam in 2022 and 2023?
When is the time to issue invoices for sale of goods and provision of services?
According to the provisions of Article 9 of Decree No. 123/2020/ND-CP, the invoicing time is prescribed as follows:
- Time for issue invoices for sale of goods
Invoices for sale of goods (including the sale of state-owned property, property confiscated and put into state fund, and the sale of national reserve goods) shall be issued when the right to own or use goods is transferred to buys, whether the payment of the invoiced amount is made or not.
- Time for issue invoices for provision of services
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).
Note: In case where multiple deliveries are required, or each goods item or service phase is accepted, it shall be mandatory to issue an invoice showing quantity, value of goods or service for each respective delivery or acceptance.
When is the time for calculating VAT in Vietnam?
The time for calculating VAT in Vietnam is specified in Article 8 of Circular No. 219/2013/TT-BTC as follows:
- 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.
- 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.
- For electricity and water supply, VAT shall be calculated when the electricity or water consumption is recorded.
- 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.
- 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.
- For imported goods, VAT shall be calculated when the customs declaration is registered.
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