VAT RATE ACCORDING TO DECREE 15 FOR SOME SITUATIONS OF INVOICES ISSUED IN 2023 (8% OR 10%)

(Refer to Official Letter No. 2972/CTTPHCM-TTHT of Tax Department of Ho Chi Minh City as follows)

General Department of Taxation

HO CHI MINH CITY TAX DEPARTMENT

SOCIALIST REPUBLIC OF VIETNAM

Independence – Freedom – Happiness

No: 2972/ CTTPHCM – TTHT

Re: Electronic invoices

Ho Chi Minh City, March 15, 2023

Kind attention to : 3A Nutrition (Vietnam) Company Limited

Address: Centec Tower, 72-74 , Nguyen Thi Minh Khai Street,

Vo Thi Sau Ward, District 3, Ho Chi Minh City

Tax code: 0310139770

Responding to the document No. 01-23/CV-DD3A dated January 11, 2023 of 3A Nutrition (Vietnam) Company Limited (the Company) on the value-added tax (VAT) rate, the Ho Chi Minh City Tax Department has the following comments:

Pursuant to the Government’s Decree No. 15/2022/ND-CP dated January 28, 2022 on tax exemption and reduction policies under the National Assembly’s Resolution No. 43/2022/QH15 dated January 11, 2022 on fiscal and monetary policies to support the Program of socio-economic recovery and development, specifically as follows:

Clauses 1 and 2, Article 1 provide for VAT reduction and the Appendixes issued together with the Decree;
Clause 1, Article 3 provides:

“Article 3. Effect and implementation

This Decree comes into force from February 01, 2022.

The provisions in Article 1 of this Decree shall take effect from February 01, 2022 to December 31, 2022 inclusively… ”

Pursuant to the Government’s Decree No. 123/2020/ND-CP dated October 19, 2020, providing for invoices and records as follows:

Clause 1, Article 4 provides:

“Article 4. Rules for issuance, management and use of invoices and records

When selling goods or providing services, the seller shall issue and send invoices to buyers (including goods/services used for sales promotion, advertising or as samples, goods/services gifted, donated, exchanged or used as salary payment to employees and internal use (except goods which are internally rotated in production process), and goods rented, lent or returned). Such invoices shall have adequate contents written according to the provisions in Article 10 hereof, except e-invoices which must follow the standard format prescribed by tax authorities as prescribed in Article 12 hereof…”

Article 9 provides:

“Article 9. Invoicing time

Invoices for sale of goods (including the sale of state-owned property, property confiscated and put into state fund, and the sale of national reserve goods) shall be issued when the right to own or use goods is transferred to buys, whether the payment of the invoiced amount is made or not.
Invoices for provision of services shall be issued upon completion of the provision of services, whether the payment of the invoiced amount is made or not. In case a service is provided with payments collected in advanced or during the provision of that service, an invoice shall be issued when each payment is collected (excluding payments of deposited amounts or advance payments which are made to ensure the execution of contracts for provision of accounting, audit, financial consulting or taxation services; valuation services; technical survey and design services; supervision consulting services; investment construction project formulation services).
In case where multiple deliveries are required, or each goods item or service phase is accepted, it shall be mandatory to issue an invoice showing quantity, value of goods or service for each respective delivery or acceptance… ”

Pursuant to Circular No. 219/2013/TT-BTC of the Ministry of Finance dated December 31, 2013 stipulating the time of determining value-added tax obligations as follows:

In Article 1, Clause 8 provides:

“Article 8. Time for calculating VAT

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…”

Clause 8, Article 14 provides:

“Article 14. Rules for deducting input VAT

….

VAT shall be declared and deducted in the period during which it is incurred, whether the products are used or still in storage.

If the taxpayer finds that the input VAT is incorrectly declared, an adjustment may be made before the tax authority or a competent authority announces the decision on tax inspection at the taxpayer’s premises.

Pursuant to Official Letter No. 3522/TCT-CS dated September 22, 2022 of the General Department of Taxation guiding the VAT policy:

“3. Regarding the reduction of VAT in the case of a specific invoice time

For activities of providing goods and services with a specific invoice time specified in Clause 4, Article 9 of Decree No. 123/2020/ND-CP, business establishments are entitled to VAT reduction according to regulations for invoices made from January 1, 2022 to the end of December 31, 2022.“

Based on the above provisions, in case the Company has problems with the VAT rate after December 31, 2022, in principle, the time to determine the VAT obligation when selling goods is the time of delivery of goods as prescribed in Clause 1, Article 8 of Circular No. 219/2013/TT-BTC. The time of making invoices for sale of goods is the time of transferring ownership according to the provisions of Clause 1, Article 9 of Decree No. 123/2020/ND-CP.

Regarding the VAT rate, the commercial discount invoiced at the end of the program at the end of the period is:

In case the commercial discount is related to the revenue from selling goods or providing services from February 2022 to December 2022 (goods and services subject to VAT reduction, the applicable VAT rate is 8%), this commercial discount the Company applies the corresponding VAT rate of 8%.
In case the commercial discount is related to the revenue from selling goods or providing services in 2022 with the applicable VAT rate of 10%, this commercial discount the Company applies the corresponding VAT rate of 10%.

Regarding e-invoices:

In case the Company uses electronic invoices (e-invoices) according to the provisions of Decree No. 123/2020/ND-CP, the provision of goods and services, if subject to invoice making, has a specific time according to the provisions of Clause 4, Article 9 of Decree No. 123/2020/ND-CP, the Company shall comply with the provisions of Official Dispatch No. 3522/TCT-CS of the General Department of Taxation.

In case the Company has invoices made from February 2022 to December 2022 (goods and services subject to VAT reduction, applicable VAT rate is 8%), there are errors that need to be adjusted in terms of the cost of goods, VAT or return the goods of those invoices, the Company shall make adjustments with the tax rate declared to the tax authority according to Clause 8 Article 14 of Circular No. 219/2013/TT-BTC of the Ministry of Finance.

The Company is requested to base on the actual situation to apply the relevant VAT rate accordingly.

The Tax Department of Ho Chi Minh City shall guide the Company to know and implement./.

Recipients :

– As above;

– Division of Inspectorate 1;

– Division of Professional – Estimation – Legal;

– Save: VT, TTHT (ntnyen – 4b). 2300027

PP. DIRECTOR

DEPUTY DIRECTOR

Nguyen Tien Dung

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