Question 1: Is a business providing transportation services eligible for VAT reduction under Resolution 406? And what is the reduction rate?
Answer:
Based on Clause 3, Article 1 of Resolution 406/UBTVQH15 of the Standing Committee of the National Assembly, a VAT reduction is stipulated from November 1, 2021, to the end of December 31, 2021, for the following goods and services:
(i) Transportation services (rail transport, waterway transport, air transport, other road transport); accommodation services; food and beverage services; services of travel agencies, tour operators and support services related to promotion and organization of tours;
(ii) Publishing products and services; film, television program production, sound recording and music publishing services; artistic works and creative, artistic, entertainment services; library, archive, museum services and other cultural activities; sports, amusement and entertainment services. Goods and services in group (ii) do not include publishing software and goods and services produced, traded in online form.
In addition, the determination of the VAT reduction rate depends on the tax calculation method. If a business operating in the transportation service sector calculates VAT using the credit-invoice method, it will receive a 30% reduction in the VAT rate. Accordingly, the reduced tax rate for transportation services will be 7%, applicable from November 1, 2021, to the end of December 31, 2021.
Question 2: What is the correct VAT rate for a company transporting goods and raw materials into an export processing zone when issuing invoices to customers?
Answer:
If the Company’s customer is an export processing enterprise:
- If the above service is consumed in a non-tariff zone and meets the conditions specified in Clause 2, Article 9 of Circular No. 219/2013/TT-BTC dated December 31, 2013, of the Ministry of Finance (Having a service supply contract with an organization or individual in the non-tariff zone; having payment vouchers for export services through a bank and other vouchers as prescribed by law), then it is subject to a VAT rate of 0%.
- If the above service is consumed outside the non-tariff zone, it is subject to a VAT rate of 10%.
The Company shall rely on the actual situation to comply with legal regulations (Based on Article 9, Article 11 of Circular No. 219/2013/TT-BTC dated December 31, 2013, of the Ministry of Finance.)
Question 3: A company operating in the transportation sector recently hired a third party to perform COVID-19 tests for its drivers (this fee is included in the transportation service price for customers). All these costs have legal input invoices and documents. So, when issuing VAT invoices for transportation services to customers, can the company issue an invoice for the COVID-19 test service fee?
Answer:
According to current regulations, during the period from the issuance of Decree No. 123/2020/ND-CP dated October 19, 2020, until June 30, 2022, Decrees No. 51/2010/ND-CP dated May 14, 2010, and No. 04/2014/ND-CP dated January 17, 2014, regulating invoices for goods sales and service provision, are still in effect.
Accordingly: In cases where the Company operating transportation services includes COVID-19 testing costs in the transportation service price, when issuing transportation invoices to customers, the Company must invoice the entire value of the transportation service received (including COVID-19 testing costs) as stipulated in Clause 7, Article 3 of Circular No. 26/2015/TT-BTC dated February 27, 2015, of the Ministry of Finance.
Question 4: A real estate brokerage company has a promotional program where customers buying a house receive gold as a gift (the promotional program has been registered with the Ministry of Industry and Trade). The input invoice for purchasing gold is a sales invoice (the gold selling unit declares VAT using the direct method). The company declares VAT using the credit-invoice method. So, what percentage should be filled in the VAT rate section of the output VAT invoice for gold given as gifts to customers?
Answer:
If the Company, which pays VAT using the credit-invoice method, purchases processed gold products from organizations engaged in the purchase, sale, and processing of gold, silver, and gemstones to award as prizes to customers, the Company must issue a VAT invoice, with a VAT rate of 10%. The invoice must fully state all details and calculate VAT as an invoice for selling goods and services to customers as stipulated in Clause 9, Article 3 amending and supplementing Point 2.4, Appendix 4 of Circular No. 39/2014/TT-BTC dated March 31, 2014, of the Ministry of Finance.
Question 5: When transferring land use rights in cases where the Company is not a real estate business entity, is it required to declare VAT?
Answer:
According to Clause 10, Article 7, Circular 219/2013/TT-BTC dated December 31, 2013, of the Ministry of Finance guiding the implementation of the Law on VAT and Decree No. 209/2013/ND-CP dated December 18, 2013, of the Government detailing and guiding the implementation of some articles of the Law on VAT, real estate transfer activities must declare VAT, regardless of whether the entity specializes in real estate business or not. The taxable price is the real estate transfer price minus (-) the deductible land value for VAT calculation.
Question 6: In goods trading activities, if the buyer receives transportation cost support from the seller, does the buyer have to issue a VAT invoice for this supported cost? Can this amount be offset against purchase debt? Is the offset considered a non-cash payment?
Answer:
According to Clause 1, Article 5, Circular 219/2013/TT-BTC dated December 31, 2013, of the Ministry of Finance, the buyer is not required to declare or calculate VAT. This supported amount only needs to be recorded with a receipt voucher as regulated.
According to Point b, Clause 4, Article 15, Circular 219/2013/TT-BTC, the supported amount received by the buyer can be offset against the debt between the two parties if specifically stipulated in the contract; this form of payment by offset, if clearly stated in the contract, is also considered a non-cash payment method.
Question 7: A company operating in the education and training sector is not subject to output VAT. Is the input VAT on goods and services used for the Company’s operations deductible? Is the Company eligible for a VAT refund for input VAT?
Answer:
If an enterprise has production and business activities for goods and services that are not subject to VAT, the input VAT on goods and services used for the production and business of non-VAT taxable goods and services is not deductible but is accounted for as an expense for corporate income tax calculation or included in the original cost of fixed assets. Except for cases where the input VAT for goods and services purchased each time has a value of twenty million VND or more, without non-cash payment vouchers.
(Based on Clause 13, Article 4, Article 14 of Circular 219/2013/TT-BTC dated December 31, 2013, of the Ministry of Finance; Article 1 of Circular No. 26/2015/TT-BTC dated February 27, 2015, of the Ministry of Finance)
This enterprise is not eligible for VAT refunds as stipulated.
(Based on Clause 3, Article 1 of Circular No. 130/2016/TT-BTC dated August 12, 2016, of the Ministry of Finance; Article 2 of Circular 25/2018/TT-BTC dated March 16, 2018, of the Ministry of Finance).
