Updated at 10/07/2023 - 08:31 am
On June 30, 06, the Government has just issued Decree No. 2023/44/ND-CP, effective from July 2023, 01 to the end of December 7, 2023, providing for the policy of price tax reduction. Value added (VAT) according to Resolution No. 31/12/QH2023 of the National Assembly. This Decree clarifies issues of reduction, order and procedures and time of application of VAT reduction for groups of goods and services.
1. Group of goods and services not eligible for VAT reduction #
The VAT reduction policy is applied to groups of goods and services currently subject to the 10% tax rate, except for some groups of special goods and services as follows:
- Telecommunications services, financial activities, banking, securities, insurance, real estate trading, metals and prefabricated products, mining products (except coal mining), coke, refined petroleum, chemical products, detailed at Appendix I promulgated together with this Decree;
- Goods and services subject to special consumption tax rates, detailed at Appendix II promulgated together with this Decree;
- Products and services of the information technology industry in accordance with the law on information technology, detailed at Appendix III promulgated together with this Decree;
- Coal products belong to Appendix I promulgated together with this Decree, at stages other than exploitation and sale, value added tax shall not be reduced.
Business establishments eligible for VAT reduction shall declare goods and services eligible for value-added tax reduction according to Form No. 01 in Appendix IV promulgated together with this Decree together with the Value Added Tax Declaration.
For cases where goods and services are not subject to VAT or are only subject to 5% VAT under the Law on Value-Added Tax, they will continue to comply with regulations and not be applied directly. tax reduction book.
2. Regulations on value-added tax reduction #
According to Decree No. 44/2023/ND-CP, the value-added tax reduction for each tax calculation method is specified as follows:
- Business establishments calculate VAT according to the credit method applied to reduce the value-added tax rate of 2% for goods and services.
- Business establishments (including business households and business individuals) calculate VAT according to the percentage method on revenue a 20% reduction of the percentage rate for VAT calculation when issuing invoices for goods and services.
3. Guidance on the order and procedures for implementing the VAT reduction policy #
Based on the value-added tax reduction according to each tax calculation method, the Decree also guides business establishments the process and procedures for implementing the value-added tax reduction policy as prescribed:
For business establishments that calculate tax by the deduction method:
- When selling goods and providing services with different tax rates, the VAT invoices must clearly state the tax rates of each goods or service.
- When making VAT invoices for the provision of goods and services subject to tax reduction, at the value-added tax rate line, write "8%"; value added tax; total amount to be paid by the buyer.
- Based on VAT invoices, business establishments selling goods and services shall declare output VAT and deduct input VAT according to the reduced tax amount recorded on the value-added invoice.
For business establishments that calculate tax as a percentage of turnover:
- When making a sales invoice for the provision of goods and services eligible for tax reduction, in the column "Income money" write the full amount of goods and services before the reduction, in the line "Add money for goods and services" write according to the number, 20% of the percentage of revenue has been reduced, and at the same time, noting: "reduced the corresponding amount of 20% of the percentage rate for VAT calculation".
- When selling goods or providing services, the sales invoice must clearly state the amount of the reduction as prescribed.
In case the business establishment has issued an invoice and declared at the tax rate or percentage for calculating VAT that has not been reduced as prescribed in this Decree, the seller and the buyer shall handle the invoice made according to the provisions of this Decree. regulations on invoices and vouchers. Based on the invoice after processing, the seller declares adjustment of output tax, and the buyer declares adjustment of input tax.
- For VAT invoices: Processing VAT invoices applying VAT reduction according to Resolution No. 101/2023/QH15 has the same error as processing ordinary VAT invoices.
- For sales invoice: Processing sales invoices applying VAT reduction according to Resolution No. 101/2023/QH15 has the same error as processing ordinary sales invoices with errors. For adjusted/replaced invoices, select to apply VAT reduction according to Resolution No. 101/2023/QH15.
Step 1: Enterprises review and look up the commodity codes corresponding to the names of goods and services that the unit needs to issue invoices in the List and contents of the Vietnamese product industry system (Promulgated with Decision No. 43/2018/QD-TTg November 01, 11 of the Prime Minister).
After the unit has grasped the industry codes of the goods and services that need to be invoiced, then directly perform step 2.
Step 2: Using the searchable industry code of goods and services, review and compare the industry code of the item that needs to be invoiced with the information at Appendix I, II, III issued together with Decree 44/2023.
If the industry code of that item in one of the three appendices above then the item is not eligible for VAT reduction, enterprises issue an invoice with the same tax rate.
If the item's industry code NOT included in any of the appendices then, for that item, the unit is entitled to VAT reduction incentives, enterprises issue tax reduction invoices at the tax rate of 8%.
In case a business establishment has sold goods or provided services (subject to VAT reduction according to Decree No. 44/2023/ND-CP) but after July 01, 07, the business establishment will issue an invoice for the revenue from the sale of goods and services arising from January 2023, 01 to June 01, 2023, in the case of making invoices at the wrong time, the issued invoices are not eligible for VAT reduction and will be fined. administrative violations for the act of making invoices at the wrong time.
- In case the business establishment calculates VAT by the credit method When selling goods or providing services with different tax rates, the value-added invoice must clearly state the tax rate of each goods or service as prescribed.
- In case the business establishment calculates VAT according to the percentage method on revenue When selling goods or providing services, the sales invoice must clearly state the amount of the reduction as prescribed.