Guidance on Assessment of selling prices and payable VAT amounts using tax imposition method in Vietnam

Guidance on Assessment of selling prices and payable VAT amounts using tax imposition method in Vietnam (Internet image)

Article 6 of Circular 71/2010/TT-BTC of Vietnam stipulates as follows:

1. The payable VAT amount shall be assessed based on the assessed selling price; the quantity automobiles or motorbikes sold at prices lower than normal market prices (referred to as quantity of violating vehicles): the added value percentage and the VAT rate

2. The payable VAT amount shall be assessed as follows:

In which:

• The percentage of the added value used for tax assessment is 10%

• The assessed selling price is the normal market price (converted into VAT-exclusive price).

- The VAT amount already declared for the quantity of violating vehicles shall be determined as follows:

+ For automobile and motorbike traders paying VAT by the method of tax credit:

In which:

• The output VAT and input VAT amounts of the quantity of violating vehicles shall be determined based on value-added sale invoices, value-added purchase invoices or documents on VAT payment in the stage of importation of violating vehicles and do not include input VAT amounts on oilier expenses related to the sale of these vehicles such as management cost and fixed asset depreciation.

• Automobile and motorbike traders paying VAT by the credit method are not allowed to subtract the VAT amount payable for the quantity of violating vehicles which is determined through assessment from the credited VAT amount in the inspection period.

+ For automobile and motorbike traders paying VAT by the method of direct calculation:

More details can be found in Circular 71/2010/TT-BTC, which comes into force from June 21, 2010.

Nguyen Phu

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