7 cases not required to declare and pay VAT 2019
Value added tax is a tax calculated on the added value of goods and services. Business people and importers are obliged to declare and pay tax. In addition, there are also regulations on cases that do not have to declare and pay VAT.
According to Article 5 of Circular 219/2013/TT-BTC (supplemented by Circular 119/2014/TT-BTC and Circular 193/2015/TT-BTC), cases that are not required to declare and pay VAT include:
1 - Organizations and individuals receiving compensation in cash, bonuses, support money, emission right transfer money and other financial revenues
(including compensation for land and assets on land when land is recovered)
- When a business receives compensation, bonuses, support money, emission rights transfer money and other financial income, it must prepare a receipt according to regulations. For a business that pays money, the purpose of the payment must be used to prepare a payment receipt...
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2 - Organizations and individuals producing and doing business in Vietnam purchasing services from foreign organizations that do not have permanent establishments in Vietnam, and individuals abroad who are not residents in Vietnam, including the following cases:
- Repair of means of transport, machinery and equipment (including materials and spare parts);
- Advertising, marketing;
- Investment and trade promotion;
- Brokering the sale of goods and providing services abroad;
- Train...
3 - Organizations and individuals not doing business, not paying VAT on the sale of assets
4 - Organizations and individuals transferring investment projects to produce and trade goods and services subject to value-added tax to enterprises and cooperatives.
5 - Enterprises and cooperatives paying VAT according to the deduction method sell unprocessed or pre-processed agricultural products., specifically:
- Unprocessed agricultural, livestock, aquatic and seafood products or those that have only undergone normal preliminary processing for businesses and cooperatives at the commercial stage are not required to declare and pay VAT.
On the VAT invoice, the selling price line is the price excluding VAT, the tax rate and VAT lines are not written, crossed out.
- In case an enterprise or cooperative pays VAT according to the deduction method and sells unprocessed agricultural, livestock, and aquatic products to other entities such as households, business individuals, and other organizations and individuals, it must declare and pay VAT at a tax rate of 5%.
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6 - Fixed assets in use, have been depreciated when transferred according to the value recorded in the accounting books
- Fixed assets in use, having been depreciated when transferred according to the value recorded in the accounting books between a business establishment and member units 100% owned by a business establishment or between member units 100% owned by a business establishment to serve the production and trading of goods and services subject to VAT:
+ No need to invoice, declare and pay VAT.
+ Business establishments with fixed assets to be transferred must have a Decision or Order to transfer assets with a set of documents on the origin of the assets attached.
7 - Other cases
Business establishments do not have to declare and pay taxes in the following cases:
- Contribute capital in assets to establish a business.
- Transferring assets between dependent accounting units in an enterprise; transferring assets when dividing, separating, merging, consolidating, converting business types...
- Third party claim collection of insurance activities.
- Collections not related to the sale of goods and services of the business establishment.
- Revenue from goods and services sold by agents and commission revenue received from agency activities sold at the correct price prescribed by the party giving the agent commission for the service:
+ Insurance agent;
+ Postal services, telecommunications, lottery ticket sales, airline tickets... which are subject to a 0% tax rate;
- Revenue from goods, services and commission revenue from sales of goods and services are not subject to VAT.
- Business establishments do not have to pay import VAT in case of importing exported goods that are returned by the foreign party. When the business establishments sell these returned goods domestically, they must declare and pay VAT.
- Organizations and enterprises receive remuneration from state agencies for performing collection and payment activities on behalf of state agencies.
