Chương II Văn bản hợp nhất 31/VBHN-BTC: Căn cứ và phương pháp tính thuế

Chapter II

BASIS AND METHODS OF TAX CALCULATION

Article 4. Taxable prices

The taxable prices shall comply with the provisions of Article 7 of the Law on Value-added tax and Clause 2 Article 1 of the Law on amendments to the Law on Value-added tax.

1. The taxable price of a good or service sold is the selling price exclusive of VAT; the taxable price of a good or service subject to excise tax is the selling price inclusive of excise tax but exclusive of VAT; the taxable price of a good subject to environmental protection tax is the selling price inclusive of environmental protection tax but exclusive of VAT; the taxable price of a good subject to both excise tax and environmental protection tax is the selling price inclusive of environmental protection tax and excise tax but exclusive of VAT.

The taxable price of an imported good is the border-gate import price plus (+) import duty (if any), plus (+) excise tax (if any), and plus (+) environmental protection tax (if any). The border-gate import price shall be determined in accordance with regulations on prices for calculating import duties.

In the case of purchased services prescribed in Clause 2 Article 2 of this Decree, the taxable price is the payment price, exclusive of VAT, specified in the purchase of service contract.

2. The taxable price of a good or service used for exchange, internal consumption or donation is the taxable price of a good or service of the same type or equivalent specifications at the time of exchange, internal consumption or donation. Regarding donated or gifted invitation letters to watch art performance or fashion show or beauty and model contest, or sporting events licensed by competent authorities, the taxable price is zero.

The taxable price of a good or service used for promotion according to regulations of law on commerce is zero. VAT on goods/services used for promotion which do not comply with regulations of law on commerce shall be declared, calculated and paid in the same manner as goods/services used for exchange, internal consumption or donation.

Goods/services used for internal consumption prescribed in this Clause are those produced or supplied by the business establishment for its internal consumption, excluding those used in other production and business operations of the business establishment.

3.^[11] In the case of real estate transfer, the taxable price is the transfer price minus (-) the land price deducted upon VAT calculation.

a) The land price deducted upon VAT calculation is provided for as follows:

a.1) In the case of land allocated by the State to invest in the infrastructure and construct houses for selling, the land price deducted upon VAT calculation is the sum of the land levy payable to state budget according to regulations of law on collection of land levies and the cost of compensation and land clearance (if any).

a.2) In the case of auctions for land use rights, the land price deducted upon VAT calculation is the auction-winning price.

a.3) In the case of rent land used for construction of infrastructure and houses for selling, the land price deducted upon VAT calculation is the sum of the land rents payable to state budget according to regulations of law on collection of land rents and water surface rents and the cost of compensation and land clearance (if any).

The cost of compensation and land clearance stated in Point a.1 and Point a.3 of this Clause is determined according to the plan approved by a competent authority and deducted from the land levy or land rents payable according to regulations of law on collection of land rents and water surface rents.

a.4) In case of transferred land use rights, the land price deducted upon VAT calculation is the land price which is determined at the time of transfer and excludes the value of infrastructure facilities. The business establishment may declare and deduct input VAT on infrastructure facilities (if any). Where the land price at the time of transfer cannot be determined, the land price deducted upon VAT calculation shall be the land price announced by the relevant Provincial People's Committee at the time of conclusion of the transfer contract.

Where a business establishment receives transfer of real estate from another entity and has included the value of infrastructure facilities in the land price as prescribed in Point a Clause 3 Article 4 of the Decree No. 209/2013/ND-CP (as amended in Clause 3 Article 3 of the Decree No. 12/2015/ND-CP dated February 12, 2015), the land price deducted upon VAT calculation shall be the land price determined at the time of transfer, exclusive of the value of infrastructure facilities.

Where the value of infrastructure facilities at the time of transfer cannot be determined separately, the land price deducted upon VAT calculation shall be the land price announced by the relevant Provincial People's Committee at the time of conclusion of the transfer contract.

a.5) In case a business establishment receives capital contribution in the form of land use rights, the land price deducted upon VAT calculation shall be the price written on the capital contribution contract. Where the transfer price of land use right is lower than the price of the land contributed, the land price deducted upon VAT calculation shall be the transfer price.

a.6) In case a real estate company enters into a Build – Transfer (BT) contract and pays with value of land use rights, the land price deducted upon VAT calculation shall be the price determined at the time of conclusion of the BT contract as prescribed by law. If the price is not determined when the BT contract is signed, the land price decided by the relevant Provincial People’s Committee shall apply.

b) In the case of construction and trading of infrastructure facilities, or construction of houses for selling, transfer or lease, the taxable price shall be the payment received according to the project schedule or payment schedule written in the contract minus (-) the land price deducted in proportion to the ratio (%) of the received payment to total value of the contract.

4.^[12]Taxable prices for electricity production of the Vietnam Electricity (EVN) are provided for as follows:

a) Regarding electricity generated by financially dependent hydropower companies of EVN or Power Generation Corporations, the taxable price used for calculating the VAT amount payable in the province where the hydropower plant is located equals 35% of the average retail price of electricity, exclusive of VAT, according to regulations of the law on electricity and the law on pricing.

b) Regarding electricity generated by financially dependent thermal power companies of EVN or Power Generation Corporations, the taxable price used for calculating the VAT amount payable in the province where the thermal power plant is located is the selling price of electricity to customers written on invoices according to the power purchase agreement applied to each thermal power plant.

If the power purchase agreement applied to each thermal power plant is not available, the taxable price shall be the average retail price of electricity, exclusive of VAT, according to regulations of the law on electricity and the law on pricing.

c) Regarding electricity generated by financially dependent electronic generation companies (except hydropower and thermal power companies) of EVN or Power Generation Corporations, the taxable price used for calculating the VAT amount payable in the province where the electronic generation plant is located is the selling price of electricity, exclusive of VAT, applied to each electronic generation type by competent authorities.

If the selling price of electricity applied to each electronic generation type by competent authorities specified in this Point is not available, the taxable price shall be the average retail price of electricity, exclusive of VAT, according to regulations of the law on electricity and the law on pricing.

5. Regarding casino business, prize-winning electronic games or betting entertainment services, the taxable price is excise tax-inclusive earnings from these services, excluding prizes or payouts already paid to customers.

6. Taxable prices of goods and services specified in Clause 1 Article 7 of the Law on Value-added tax and Clause 2 Article 1 of Law on amendments to the Law on Value-added tax include surcharges and additional charges earned by business establishments.

The Ministry of Finance of Vietnam shall provide specific guidelines for taxable prices specified in this Article.

Article 5. Time of VAT determination

1. VAT on goods shall be determined when the ownership or the right to use goods is transferred to the buyer, regardless of whether or not the payment is made.

2. VAT on services shall be determined when the service provision is completed or when the invoice for service provision is issued, regardless of whether or not the payment is made.

3. The Ministry of Finance of Vietnam shall provide specific guidelines for time of VAT determination in specific cases.

Article 6. VAT rates

VAT rates shall comply with the provisions of Article 8 of the Law on Value-added tax and Clause 3 Article 1 of the Law on amendments to the Law on Value-added tax.

1. The 0% VAT applies to exported goods and services, international transportation and goods and services not subject to VAT specified in Article 5 of the Law on Value-added tax and Clause 1 Article 1 of the Law on amendments to the Law on Value-added tax upon exportation, except goods and services specified at Point dd of this Clause.

The exported goods and services are those sold and supplied to overseas entities and consumed outside Vietnam or in free trade zones; goods and services supplied to foreign customers in accordance with regulations of law.

a) Exported goods include: Goods exported to foreign countries or sold into free trade zones; works built and installed abroad or in free trade zones; goods sold and delivered outside Vietnam; supplies, spare parts for repair, maintenance of vehicles, machinery, equipment for foreign parties and consumed outside Vietnam; in-country exports and other cases in which goods are regarded as exports in accordance with regulations of law.

b) Exported services include services provided directly to entities in foreign countries or in free trade zones and consumed outside Vietnam or in free trade zones.

Where a service is provided both in and outside Vietnam under a service contract signed by and between two taxpayers in Vietnam or having permanent establishments in Vietnam, the 0% VAT only applies to the value of service provided outside Vietnam, except the case of insurance service for imported goods where the 0% VAT applies to total value of the contract. If the value of service provided in Vietnam is not separately specified in the contract, the taxable price shall be determined according to the ratio (%) of costs incurred in Vietnam to total costs.

Overseas individuals include foreigners who do not reside in Vietnam and overseas Vietnamese who reside in foreign countries and also stay outside Vietnam during the service provision.

Organizations and individuals in a free trade zone are those having completed business registration procedures and other cases specified by the Prime Minister of Vietnam.

c) International transport prescribed in this Clause includes passenger transport and freight transport along international routes from Vietnam to other countries and vice versa, or any route the point of departure and point of destination of which are both in foreign countries. If the international transport contract includes a domestic segment, the domestic segment is also included in the international transport.

d) In order to be eligible for the 0% rate, exported goods and services in Points a and b of this Clause must satisfy all of the conditions specified in Point c Clause 2 Article 9 of this Decree, and include some cases of goods and services eligible for the 0% VAT under conditions prescribed by the Ministry of Finance of Vietnam.

dd) ^[13] The 0% VAT shall not apply to:

- Transfer of technology, transfer of intellectual property rights to abroad;

- Selling reinsurance to abroad;

- Extension of credit to abroad;

- Transfer of capital to abroad;

- Investment of securities to abroad;

- Derivative financial services;

- Post and telecommunications services;

- Exports specified in Clause 11 Article 3 of this Decree;

- Goods/services provided for an individual who does not do business in a free trade zone.

- Tobacco, alcohol and beer products imported and then exported.

e) The Ministry of Finance of Vietnam shall provide specific regulations on some cases of other goods and services supplied to overseas entities that are eligible for the 0% VAT and goods and services supplied to overseas entities but consumed in Vietnam that are not eligible for the 0% rate.

2. The 5% VAT applies to goods and services specified in Clause 2 Article 8 of the Law on Value-added tax and Clause 3 Article 1 of the Law on amendments to the Law on Value-added tax. The 5% VAT applies to:

a) Clean water used for production and daily activities specified in Point a Clause 2 Article 8 of the Law on Value-added tax, excluding bottled drinking water and other soft drinks which are subject to the 10% rate.

b) ^[14] The products mentioned in Point b Clause 2 Article 8 of the Law on Value-added, including:

- Ores for fertilizer production which are ores used as materials for fertilizer production;

- Pesticides, including plant protection drugs and other pesticides;

- Growth stimulants for animals and plants.

c) ^[15] (abrogated)

d) Product preliminary processing and preservation services specified in Point d Clause 2 Article 8 of the Law on Value-added, including: Drying, peeling, shelling, deseeding, cutting, grinding, cooling, salting and other common methods of preservation.

dd) Fresh and live foods specified in Point g Clause 2 Article 8 of the Law on Value-Added Tax, including foods which are not yet cooked or processed into other products.

Unprocessed forest products specified in Point g Clause 2 Article 8 of the Law on Value-Added Tax include exploited natural forest products of the following groups: rattan, bamboo, mushrooms, Jew's ear, roots, leaves, flowers, medicinal plants, resin and other forest products.

e) Pharmaceutical chemical products and herbal materials used as raw materials for the production of curative and preventive medicines specified in Point 1 Clause 2 Article 8 of the Law on Value-Added Tax.

g) Social houses specified in Point q Clause 2 Article 8 of the Law on Value-Added Tax and Clause 3 Article 1 of Law on amendments to the Law on Value-Added Tax which are houses invested and built by state or entities of all economic sectors and meet the criteria on houses, sale price, rent, lease purchase price, objects, conditions for purchase, rent, lease purchase of social houses as prescribed by the law on housing.

Article 7. Credit-invoice method

The credit-invoice method shall comply with the provisions of Article 10 of the Law on Value-added tax and Clause 4 Article 1 of the Law on amendments to the Law on Value-added tax.

1. The VAT payable calculated using credit-invoice method is the output VAT amount minus (-) the creditable input VAT amount.

2. The output VAT amount is the total amount of VAT on goods sold and services provided as written in the VAT invoice.

The VAT amount written in the VAT invoice equals the taxable price of goods and services multiplied (x) by the VAT rate of such goods and services.

In case the payment price written in the record is inclusive of VAT, the output VAT amount shall be the payment price minus (-) the taxable price determined as prescribed at Point k Clause 1 Article 7 of Law on Value-Added Tax.

3. The creditable input VAT amount is determined based on:

a) The VAT amounts written in the VAT invoices on goods or services purchased and the records of payment of VAT on imported goods or payment of VAT on purchased services as prescribed in Clause 2 Article 2 of this Decree.

In case the payment price of purchased goods or services written in the record is inclusive of VAT, the deductible input VAT amount shall be the payment price minus (-) the taxable price determined as prescribed at Point k Clause 1 Article 7 of Law on Value-Added Tax.

b) Conditions for deduction of input VAT shall comply with the provisions of Clause 2 Article 9 of this Decree.

4. The credit-invoice method applies to:

a) An operating business establishment that earns annual revenue of VND one billion or more from goods sale and service provision and has fulfilled policies on accounting, invoices and records as prescribed by the law on accounting, invoices and records, except for household and individual businesses that pay tax according to the direct calculation method as prescribed in Article 8 of this Decree.

The tax calculation method shall be applied for a stable duration of two consecutive years.

The Ministry of Finance of Vietnam shall provide guidelines for calculation of revenues as the basis for determining business establishments that are eligible to pay VAT using credit-invoice method and stable duration for application of tax calculation method as prescribed in this Point.

b) The following business establishments may register for voluntary application of credit-invoice method:

- Operating enterprises and cooperatives that earn annual revenue of less than VND one billion from goods sale and service provision and have fulfilled policies on accounting, invoices and records as prescribed by the law on accounting, invoices and records;

- New enterprises that are established from investment projects of operating business establishments that pay VAT using credit-invoice method.;

- New enterprises and cooperatives that make investment in and procurement of fixed assets, machinery, equipment; foreign entities conducting business in Vietnam under main contracts or sub-contracts according to guidelines of the Ministry of Finance of Vietnam;

- Other economic organizations that can account the input and output VAT amounts.

c) If a foreign entity supplying goods and services for exploring, developing and exploiting oil and gas pays VAT using credit-invoice method, Vietnamese party shall declare and pay VAT on their behalf.

If a business establishment purchases, sells and processes gold, silver or precious stones, VAT on these activities must be separately declared and paid using direct calculation method as prescribed in Clause 1 Article 8 of this Decree.

5. The Ministry of Finance of Vietnam shall provide specific guidelines for this Article.

Article 8. Direct method

The direct method shall be employed for calculating VAT in accordance with the provisions of Article 11 of the Law on Value-added tax and Clause 5 Article 1 of the Law on amendments to the Law on Value-added tax.

1. The VAT amount payable using the direct method equals the added value multiplied by (x) the 10% rate applied to the purchase, sale and processing of gold, silver or precious stones.

The added value of gold, silver or precious stones is the payment price of gold, silver or precious stones sold minus (-) the payment price of corresponding gold, silver or precious stones purchased.

The payment price of gold, silver or precious stones sold is the actual selling price written in the invoice issued when selling gold, silver or precious stones, including processing costs (if any), VAT and other surcharges or additional charges earned by the seller.

The payment price of gold, silver or precious stones purchased is the value, inclusive of VAT, of gold, silver or precious stones purchased, or imported, and used for trading or processing of corresponding gold, silver or precious stones to be sold.

If the added value of gold, silver or precious stones in a tax period is a negative number, it may be offset against the positive number of the added value of gold, silver or precious stones. If there is no positive number of the added value or the positive number of the added value is not sufficient for offsetting against the negative number of the added value, the latter shall be carried forward to the next period. Upon the end of a calendar year, the remaining negative number of the added value shall not be carried forward to the next year.

2. The VAT amount payable using the direct method is calculated by multiplying the rate (%) by revenue and applied as follows:

a) Subjects of application:

- Operating enterprises and cooperatives that earn annual revenue of less than VND one billion, except for those voluntarily paying VAT using credit-invoice method as prescribed in Clause 4 Article 7 of this Decree;

- New enterprises and cooperatives, except for those voluntarily paying VAT using credit-invoice method as prescribed in Clause 4 Article 7 of this Decree;

- Household and individual businesses;

- The foreign entities doing business in Vietnam without following the Law on Investment and other organizations that fail to implement or partially implement regulations on accounting, invoices and records, except for foreign entities that provide goods and services for exploring, developing and exploiting oil and gas as prescribed in Point c Clause 4 Article 7 of this Decree.

- Other business entities, except for those voluntarily paying VAT using credit-invoice method as prescribed in Point b Clause 4 Article 7 of this Decree.

If a business establishment purchases, sells and processes gold, silver or gems, VAT on these activities must be separately declared and paid using direct calculation method as prescribed in Clause 1 of this Article.

b) The rate (%) used for calculating VAT on revenue is provided for as follows:

- Distribution or supply of goods: 1%;

- Services, construction without supply of materials: 5%;

- Production, transport, services associated with goods, construction with supply of materials: 3%;

- Other business operations: 2%.

c) Revenue means total amounts actually earned from goods sale or service provision and written in the invoice of goods/services, inclusive of surcharges and/or additional charges paid to a business establishment.

3.^[16] Business operations and household businesses that fail to implement or insufficiently implement regulations on accounting, invoices and records as prescribed by law shall pay presumptive VAT as prescribed in Article 51 of the Law on Tax Administration.