Recently, the General Department of Taxation of Vietnam has issued the Official Dispatch No. 5189/TCT-CS on introduction of new points of the Decree No. 126/2020/NĐ-CP elaborating the Law on Tax Administration. This Official Dispatch has introduced 08 new points on VAT declaration that taxpayers should pay attention to from December 05.
Article table of contents
Official Dispatch No. 5189/TCT-CS of the General Department of Taxation of Vietnam has clarified 08 new points on VAT declaration (except for VAT on lottery business, electricity generation, business of household businesses and individuals for property tax) specified in Article 7, Article 9 and Article 11 of the Decree No. 126/2020/NĐ-CP elaborating the Law on Tax Administration of Vietnam as follows:
New point 1: Supplement the regulation that if the taxpayer is authorized by the state to collect certain amounts, in which case VAT on such amounts shall be separately declared and if the taxpayer is authorized to manage business cooperation contracts without establishment of separate juridical persons, in which case tax on each contract shall be separately declared under these contracts. (There was no such regulation before)
New point 2: Amend the regulation that if the taxpayer has operational investment projects eligible for VAT refund, in which case a VAT declaration dossier shall be separately prepared for each project and VAT on purchases of each project shall be offset against VAT payable (if any) in the same tax period.
New point 3: Amend the regulation that a taxpayer is not required to declare tax if the taxpayer only has business operations that are not subject to any tax as prescribed in law on VAT or the taxpayer is an export processing enterprise that only exports.
(Previously, according to Circular No. 156/2013/TT-BTC, if the taxpayer only has business operations that are not subject to VAT, it is not required to declare and pay VAT. If the taxpayer sells any goods or services subject to VAT, the taxpayer shall use the invoice of the tax authority and pay VAT as required.)
New point 4: Amend the regulation related to quarterly declaration of VAT on revenue from sale of ancillary industry products on the list of ancillary industry products prioritized for development of more than VND 50 billion per year.
(Previously, it is regulated that a taxpayer shall declare value-added tax (VAT) on a quarterly basis for revenue from ancillary industry products on the list of ancillary industry products prioritized for development regardless of whether such revenue is over or under VND 50 billion per year)
New point 5: Amend the regulation that VAT is a tax declared monthly, quarterly and every time the tax is incurred. A taxpayer who declares tax monthly may, at their option, declare tax quarterly if all requirements for quarterly declaration are fulfilled or keep declaring tax monthly. In a monthly or quarterly declaration period throughout the calendar year, in case a taxpayer who is declaring tax monthly fulfills the requirements for quarterly declaration and wishes to declare tax quarterly, the taxpayer shall submit a written request to the supervisory tax authority; in case a taxpayer finds that the requirements for quarterly declaration are not fulfilled, the taxpayer is not required to submit tax declaration dossiers of the previous quarters; however, the taxpayer shall submit a document specifying the difference between monthly declared tax and quarterly declared tax and pay the late payment interest as per regulations.
(Previous regulations only stipulated the rule that declarations shall be made quarterly by the taxpayers whose revenue in the previous year is 50 billion VND or lower. VAT shall be declared monthly or quarterly throughout the calendar year and the 3-year period, in case a taxpayer fulfills the requirements for quarterly declaration but wishes to declare tax monthly, the taxpayer shall submit a written request to the supervisory tax authority; in case a taxpayer, during declaring quarterly, finds that the requirements for quarterly declaration are not fulfilled, the taxpayer shall specify the difference between monthly declared tax and quarterly declared tax from the year succeeding the year in which the revenue is discovered to the end of stable period.)
New point 6: Amend the regulation that a taxpayer that does accounting mainly at the headquarters and has dependent units or places of business in other provinces shall declare tax in the province in which the headquarters are based and apportion tax incurred in each province.
(Previous regulations stipulated that a manufacturing division situated in another province than that of the headquarter that does not directly sell goods and thus does not earn any revenue, does not keep accounting records at the headquarters but it is required to apportion the amount of tax payable among the manufacturing divisions. Concurrently, VAT declaration in areas where the businesses take place: extra provincial construction, installation, sale, real estate transfer (with revenue under VND 1 billion; except for interprovincial works or real estate business projects), owners of ODA projects that are not eligible for VAT refund and foreign contractors that execute ODA projects eligible for VAT refund (except interprovincial projects).)
New point 7: Amend the regulation that the VAT on transfer of real estate or an infrastructure or housing development project for transfer (even if progress payments are collected) in a province other than the province where the taxpayer is headquartered shall be declared at the tax authority where the transfer takes place.
(Previously, it is stipulated that where the taxpayer plans to sell real estate in another province than that of the taxpayer’s headquarter and establishes an affiliate (branch, management board, etc.), then the taxpayer must apply for tax registration and use credit-invoice method to pay the tax on real estate trading to the tax authority of the locality where real estate is sold. If the taxpayer does not establish an affiliate (branch, management board, etc.), the taxpayer must declare and pay tax at the tax authority that manages its headquarter.)
New point 8: Amend the regulation on tax declaration associated with every VAT declaration method, in specific: abolish the table of paid VAT on revenue from extra provincial business form No. 01-5/GTGT and notice of change from quarterly declaration to monthly declaration form No. 07/GTGT. Supplement the request for change from monthly tax period to quarterly tax period form No. 01/DK-TDKTT and the determination of difference between monthly declared tax and quarterly declared tax form No. 02/XD-PNTT (List of tax declaration in Appendix I issued together with Decree No. 126/2020/NĐ-CP).
The above are 8 new points on VAT declaration (except for VAT on lottery business, electricity generation, business of household businesses and individuals for property tax). Customers and Members can see more new points at the Official Dispatch No. 5189/TCT-CS issued by the General Department of Taxation of Vietnam on December 07, 2020.
Ty Na
- Key word:
- Official Dispatch No. 5189/TCT-CS
