Are Facebook advertising invoices subject to VAT deduction in Vietnam?

Are Facebook advertising invoices subject to VAT deduction in Vietnam?

In Official Dispatch 44297/CTHN-TTHT of 2022, there are instructions on tax declaration for advertising activities on Facebook as follows:

Based on the above regulations, Hanoi Tax Department has the following opinions:

In case Meta Company - an overseas supplier has performed tax registration, tax declaration, and direct tax payment in Vietnam according to the provisions of Article 76, Article 77, Article 78, Article 79 of Circular No. 80/2021 /TT-BTC, the organization purchasing services from an overseas supplier (Northern Dat Xanh Real Estate and Services Joint Stock Company) does not have to declare, deduct and pay taxes on behalf of the overseas supplier. foreign.

In principle, input VAT on goods and services used for production and trading of goods and services subject to VAT is fully deductible if it meets the VAT deduction conditions specified in Article 15 of the Circular 219/2013/TT-BTC is amended and supplemented in Clause 10, Article 1 of Circular No. 26/2015/TT-BTC, Article 1 of Circular No. 173/2016/TT-BTC.

Pursuant to Official Dispatch 36815/CTHN-TTHT of 2022 guiding tax policies for online advertising services on Facebook as follows:

Pursuant to the above regulations:

In case the overseas supplier (Meta Company) has performed tax registration, tax declaration, and tax payment in Vietnam according to the provisions of Article 76, Article 77, Article 78, Article 79 of Circular 80/2021/TT -BTC mentioned above, organizations purchasing services from overseas suppliers do not have to declare, deduct and pay taxes on behalf of the overseas supplier.

In principle, input VAT on goods and services used for the production and sale of goods and services subject to VAT is fully deductible if the conditions for input VAT deduction specified in Article 15 of Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance (amended and supplemented according to the provisions of Clause 10, Article 1 of Circular No. 26/2015/TT-BTC, Article 1 of the Circular No. 173/2016/TT-BTC).

The company is included in deductible expenses when determining income subject to corporate income tax if it meets the conditions specified in Article 4 of Circular No. 96/2015/TT-BTC dated June 22, 2015 of the Ministry of Finance.

Thus, if an overseas service provider has registered tax, declared tax and paid tax in Vietnam, the organization purchasing Facebook advertising services from the overseas provider does not have to declare, deduct and pay taxes on behalf of overseas suppliers.

On the other hand, input VAT on Facebook advertising services subject to VAT in Vietnam will be fully deductible if the following conditions are met:

- Have a legal value-added invoice of purchased goods or services or a document of payment of value-added tax at the import stage or a document of payment of VAT on behalf of the foreign party according to the applicable guidance of the Ministry of Finance. for foreign organizations without Vietnamese legal status and foreign individuals doing business or having income arising in Vietnam.

- Have non-cash payment documents for 20 million VND or more,

However, the overseas service provider, Meta company, provides invoices to organizations hiring Facebook ads as sales invoices, so the organization's Facebook advertising invoices are not deductible for input VAT in Vietnam.

Are Facebook advertising invoices subject to VAT deduction in Vietnam? (Image from the Internet)

When are invoices not deducted input VAT in Vietnam?

In Clause 15, Article 14, Circular 219/2013/TT-BTC stipulates that input VAT must not be deducted in the following cases:

15. Input VAT must not be deducted in the following cases:

- The VAT invoice is not legitimate, such as VAT is not written (except for special invoices on which selling prices are VAT-inclusive);

- The invoice does not contain or does not contain the correct name, address or TIN of the seller, thus rendering the seller unidentifiable;

- The name, address, or tax code of the buyer on the invoice is incorrect (except for the case in Clause 12 of this Article);

- The VAT invoice or the receipt for VAT payment is fake; the invoice is changed or fictitious (made without actual sale);

- The invoice does not reflect the actual value of goods and services.

What are conditions for deducting input VAT in 2024 in Vietnam?

In Article 12 of the 2008 Value Added Tax Law, amended by Clause 6, Article 1 of the 2013 revised Value Added Tax Law, input value-added tax credit is specified as follows:

2. Conditions on a business establishment to be entitled to input value-added tax credit are specified as follows:

a/ Having an added-value invoice on goods or service purchase or a document proving the payment of value-added tax at the stage of importation;

b/ Having proof of payment by bank transfer for the purchased goods or services, except goods or services valued at under twenty million Vietnam dong upon each time of purchase;

c/ For exported goods and services, apart from the conditions specified at Points a and b of this Clause, the business establishment must also have a contract signed with a foreign party on goods sale or processing or service provision, a goods or service sale invoice, a proof of payment by bank transfer and a customs declaration.

Payment for exported goods or services by clearing between exported goods or services and imported goods or services or paying debts on behalf of the State is considered payment by bank transfer.

Best regards!