Vietnam: What is the VAT rate for the transfer of the right to use Internet domain names?
What is the VAT rate for the transfer of the right to use Internet domain names?
Pursuant to Official Dispatch No. 14845/CTHN-TTHT in 2023 as follows:
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Based on the above provisions, in case Economic & Urban Newspaper transfers the right to use Internet domain names according to the provisions of law, it must make an invoice and declare and pay VAT at the VAT rate of 10% as prescribed in Article 4 of Decree No. 123/2020/ND-CP of the Government, Article 11 of Circular No. 219/2013/TT-BTC of the Ministry of Finance.
Request the unit to study the tax laws and the actual basis arising at the unit to comply with the regulations.
In the process of implementing tax policy, in case there are still problems, the unit can refer to the guiding documents of the Hanoi Tax Department posted on the website http://hanoi.gdt.gov.vn or contact the Department of Inspection - Checking No. 4 for assistance in solving.
Pursuant to Article 11 of Circular No. 219/2013/TT-BTC stipulating as follows:
Tax rate of 10%
10% tax shall be levied on the goods and services that are not mentioned in Article 4, Article 9 and Article 10 of this Circular.
The rates of VAT mentioned in Article 10 and Article 11 shall be uniformly applied to each type of goods and services, whether they are imported, manufactured, processed, or traded.
Example 50: 10% tax is levied on apparel. That means the tax rate is always 10% whether such apparel is imported, manufactured, processed, or traded.
VAT on the products made of recycled wastes and scrap is the same as VAT on the wastes and scrap when they are sold.
If a taxpayer sells various goods and services that are subject to various rates of VAT, they must be sorted by VAT rates. Otherwise, the highest rate of VAT among which shall apply.
If the rate of VAT in the preferential import tariff schedule is found not conformable with this Circular, this Circular shall apply. If different rates of VAT are applied to the same kind of goods that are imported or manufactured in Vietnam, the local tax authority and customs authority must send a report to the Ministry of Finance for guidance.
Thus, according to the above regulations, the VAT rate of 10% applies to the transfer of the right to use Internet domain names.
Vietnam: What is the VAT rate for the transfer of the right to use Internet domain names? (Image from the Internet)
What are the conditions and procedures for VAT refund in Vietnam?
Pursuant to Article 19 of Circular No. 219/2013/TT-BTC stipulating the conditions and procedures for VAT refund in Vietnam as follows:
- To be eligible for tax refund according to Points 1, 2, 3, 4, 5 Article 18 of Circular No. 219/2013/TT-BTC, the taxpayer must pay tax using credit-invoice method, be issued with a Certificate of Business registration or investment license or practice certificate, or a decision on establishment issued by a competent authority, have a legal seal, keep accounting records in accordance with accounting laws, and have deposit accounts at banks according to the taxpayer’s TIN.
- Input VAT that has been claimed on the VAT declaration must not be aggregated with the deductible tax of the next month.
- VAT shall be refunded in accordance with the procedures in the Law on Tax administration and its guiding documents.
When is the time for calculating value added tax in Vietnam?
Pursuant to Article 8 of Circular No. 219/2013/TT-BTC stipulating the time for calculating value added tax in Vietnam 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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