Time for calculating VAT in Vietnam

Time for calculating VAT in Vietnam
Lê Trương Quốc Đạt

What are the regulation on the time for calculating VAT in Vietnam? What are the places to pay VAT?- Bao Ngan (Tien Giang, Vietnam)

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Time for calculating VAT in Vietnam (Internet image)

Regarding this issue, LawNet responded as follows:

1. Time for calculating VAT in Vietnam

Time for calculating VAT according to Article 8 of Circular 219/2013/TT-BTC is as follows:

- For the sale of goods, it is the time when the ownership or the right to use the goods is transferred to the buyer, regardless of whether the money has been collected or not.

- 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.

2. Places to pay VAT in Vietnam

Places to pay VAT according to Article 20 of Circular 219/2013/TT-BTC is as follows:

- Taxpayer shall declare and pay VAT in the locality where the business is situated.

- If the taxpayer that pays VAT using credit-invoice method has a financially dependent manufacturing facility in a province other than the province where the headquarter is situated, VAT shall be paid in both provinces.

- If a company or cooperative that uses direct method has a manufacturing facility in a province other than that where the headquarter is situated, or engages in extraprovincial sale, the company or cooperative shall pay direct VAT on the revenue earned from extraprovincial sale in the province where the sale is made.

The company or cooperative is not required to pay direct VAT on such revenue, which has been declared at paid, at the headquarter

- When a provider of telecommunications services provides postpaid telecommunications services in a province other than the province where their headquarter is situated, and establish a financially dependent branch that pays VAT using credit-invoice method and also provides postpaid telecommunications services in that same province, the provider of telecommunications services shall declare and pay VAT on postpaid telecommunications services as follows:

= VAT on the total revenue from provision of postpaid telecommunications services of the provide shall be declared at the supervisory tax authority of the headquarter.

= VAT shall be paid in the provinces where the headquarter and the branch are situated.

Direct VAT shall be paid at 2% of the revenue from telecommunications services provided in the province where the branch is situated (postpaid telecommunications services are subject to 10% tax)

- VAT shall be declared and paid in accordance with the Law on Tax administration and its guiding documents.

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