What is the time for calculating VAT in Vietnam? What are VAT deduction methods in Vietnam?

What is the time for calculating VAT in Vietnam?

Pursuant to Article 8 of the Circular 219/2013/TT-BTC stipulating time for calculating VAT:

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.

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As regulated above, the time for calculating VAT in Vietnam is stipulated 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 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.

What is the time for calculating VAT in Vietnam? What are VAT deduction method in Vietnam?  - image from internet

What are VAT deduction methods in Vietnam?

Pursuant to Clause 1 Article 10 of the Law on Value-Added Tax in 2008 (amended by Clause 4 Article 1 of the Law on amendments to the Law on Value-added Tax in 2013), VAT shall be deducted as follows:

- The amount of VAT payable by deduction method is equal to the amount of output VAT minus the deductible input VAT;

- The amount of output VAT is equal to the total VAT on sold goods and services, which is written on the VAT invoice.

VAT on sold goods and services written on the VAT invoice is equal to the taxable prices of goods and services multiplied by the rate of VAT on such goods and services.

If the paid price written on the invoice is inclusive of VAT, the output VAT shall equal the paid price minus VAT defined in Point k Clause 1 Article 7 of the Law on Value-Added Tax in 2008;

- The amount of deductible input VAT is equal to the total amount of VAT written on the VAT invoice, the VAT bill of imported goods, and must satisfy the conditions in Article 12 of the Law on Value-Added Tax in 2008 (amended by Clause 6 Article 1 of the Law on amendments to the Law on Value-added Tax in 2013).

What are rates of VAT in Vietnam?

Pursuant to Article 8 of the Law on Value-Added Tax in 2008 (amended by Clause 3, Article 1 of the Law on amendments to the Law on Value-added Tax in 2013; Clause 2, Article 1 of the Law on amendments to the Law on Value-added tax, the Law on special excise duty, the Law on Tax administration in 2016; Clauses 2 and 3, Article 3 of the Law on amendments to Tax Laws in 2014) stipulating rates of VAT:

There are 3 rates of VAT in Vietnam, including:

- The tax rate of 0%;

- The tax rate of 5%

- The tax rate of 10%

Note: Different tax rates will be applied to different types of goods and services.

Best regards!