Basis of Assessment Taxable Price GENERAL PRINCIPLES Goods and services used for exchange , internal consumption , donation , payment in lieu of salary : selling of identical or similar goods at the transaction time and services used for internal movement : non-VAT- able Internal movement : goods moved from one warehouse to another, or materials issued for production Internal consumption : goods issued or services provided for the use of the company
Basis of Assessment Taxable Price 1. For property leasing : lease price IN PARTICULAR 2. 3. 4. For goods sold in installment and on account : up front payment (total price less interest charge) For processing for export : processing fee (labour + indirect materials + other costs) For construction and value of work performed and handed over exclusive of VAT (which may or may not include the cost of materials – depending on case by case)
Basis of Assessment Taxable Price IN PARTICULAR 5. For real estate business activities: (-) minus actual price of land (or land rent) at the date of transfer or standard of People’s Committee in case of improper declaration – See Example 1 a. In case of construction of infra-structure and houses for sales with payments in accordance with a progress billing schedule: the basis for allocation of deductible land price will be the actual of the first payment – See Example 2 b. In case of construction on leased land for lease price exclusive of VAT (-) minus Land rent payable to the State – See Example 3
Basis of Assessment Taxable Price 9. For transportation services : Freight IN PARTICULAR 10. For tourist tours (du l ịch l package price inclusive of VAT (-) minus air-tickets, accommodation and sight seeing expenses incurred overseas and others 11. For pawn shop (ti ệ m c ầ m đồ ): amount receivable including interest receivable and other receipts from sales of pawned objects 12. For books , magazines , publications : cover price (VAT inclusive) or actual selling price
Basis of Assessment Taxable Price IN PARTICULAR 13. For printing services : printing fee (with or without the cost of In cases where the payment price includes the cost of paper, taxable price is the total payment price 14. For services of an assessment agency (đạ i lý nh ), agency of assessment for compensation (đạ i lý xét b ồ i th ườ ng ), agency for party claims (đạ i lý đ òi ng ườ i th ứ 3 b ồ i hoàn ): the fee , the commission received by the insurance company
Credit Method CLAIMING INPUT VAT GENERAL CONDITIONS 4. 5. 6. Purchase payments must be made through banks if the purchase invoice is from VND20 million and above (inclusive of VAT) Note for credit sales Note for collection of debt by compensation Input VAT of any month must be claimed in the same month Late claiming: Not later than 6 months from the month of purchases Alert!
Credit Method CLAIMING INPUT VAT Purchase invoice dated 14/2/09 GENERAL CONDITIONS 1/09 2/09 First month 3/09 Second month 4/09 Third month 5/09 Fourth 6/09 Fifth month 7/09 Sixth 8/09 Deadline for claiming 20/8/09
Credit Method CLAIMING INPUT VAT SPECIAL CASES 8. 9. VAT input of goods, fixed assets purchased that are lost , damaged due to natural calamity, fire or unexpected accident: not creditable VAT input of fixed assets purchased for the following activities are not creditable a. For production of arms and weaponry b. For credit activities, insurance activities, securities activities, hospitals and schools, c. Aircrafts and yachts not for business purposes
Direct Method DETERMINATION OF “VAT ADDED” 1 Business enterprises that are able to keep provide sale invoices and purchase invoices Value Added = Sales Revenue - Cost of Goods Sold Cost of goods sold can be determined as follows: Cost of Beg. Pur- Ending Goods Sold = Stock +
Direct Method DETERMINATION OF “VAT ADDED” For production and trade activities : value added is the difference between sales revenue and cost of goods sold For construction and installation activities : value added is the difference between receipts and cost of materials plus other costs For transportation activities : value added is the difference between receipts and cost of gasoline plus costs For catering activities: value added is the difference between receipts and cost of materials plus other costs
Direct Method DETERMINATION OF “VAT ADDED” For enterprises trading in gold, silver, precious stones and foreign currency : value added is the difference between sales revenue and cost of goods sold For other business activities : value added is the difference between the receipts and cost of goods sold (corresponding cost of purchases of and services)
Invoicing Requirements SPECIFIC (1/17) VAT invoice to be issued, but NO VAT rate and VAT amount to be shown in the following special circumstances: Sales of non-VATable supply to exempt VAT payers Sales of gold , silver , foreign currencies A statement such as “ sale of non-taxable supply or sale to VAT exempt taxpayers ” must be written on invoice
Invoicing Requirements SPECIFIC CASES (6/17) ADJUSTMENT VAT invoice issuance in case of price adjustments : An agreement must be set up between the buyer and the seller regarding the adjusted price for defective goods The seller issue a new VAT invoice at adjusted price Both the seller and the buyer will use the agreement to adjust their output VAT and input VAT when filing Negative invoice is not allowed No adjustment is allowed if customers are not identified
Invoicing Requirements SPECIFIC CASES (8/17) SALES TO AGENTS VAT invoice issuance in case of sales to agents : Step 1: issue Goods-issued Note to Sales Agent u xu ấ t kho hàng g ử i bán đạ i lý) + Director’s Order Step 2: issue VAT invoice after receiving sales report Sales agents for commission are required to: Issue VAT invoice to the buyers Prepare Schedule of Goods Sold (B ả ng kê hàng hóa bán ra)
Invoicing Requirements SPECIFIC CASES (10/17) 1 Goods-Issued Note 2 EXPORT AGENTS - VAT invoice - After verificat - Goods VAT invoice 3 VAT invoice for commission Export Agent of customs officer - Actual amount
Invoicing Requirements SPECIFIC CASES (14/17) Transport services VAT invoice issuance in case of transportation services, tourist services For transportation services : VAT invoice must be issued, showing the amount of transportation revenue after deducting all international freight charge , if any For tourist services (package tour): VAT invoice must be issued, showing the total amount of revenue after deducting all costs incurred overseas, including international air fares
VAT Refund GENERAL PRINCIPLES To be a credit method taxpayer When input VAT is larger than output VAT in 3 consecutive months Month declared 12/2008 01/2009 02/2009 VAT input 200 mil 300 mil 300 mil VAT output 100 mil 350 mil 200 mil Net VAT payable - 100 mil + 50 mil - 100 mil VAT refunded 100 mil 50 mil 150 mil