CASES NOT REQUIRED TO DECLARE AND PAY VAT

CASES NOT REQUIRED to declare and pay VAT

Normally, when enterprises start production and business activities, for taxable goods and services, enterprises must declare, pay and calculate VAT. Besides, there are many cases that shall not declare, calculate and pay VAT according to the latest tax law as guided in Article 5 of Circular 219/2013/TT-BTC on 31/12/2013.

1. Organizations and individuals that receive revenues from compensation by cash (including compensation for land and land-attached assets upon land recovery under decisions of competent state agencies), bonus, support, transfer of the emission right, and other financial revenues shall not declare and pay VAT.

⭕ When receiving compensation, bonus, support, transfer of the emission right, or other financial revenues, business establishments shall make receipts under regulations.

⭕ For business establishments that spend money, based on spending purposes shall make money payment vouchers.

⭕ In case of compensation by goods or services, the compensation establishment must make an invoice and declare, calculate and pay VAT as for the sale of goods and services;

⭕ The establishment that receives the compensation shall declare and deduct VAT under regulations.

⭕ In case a business establishment that receives money from an organization or individual to provide services for such organization or individual as repair, warranty, sales promotion, or advertisement, shall declare and pay tax as prescribed.

2. Production and business organizations and individuals in Vietnam that purchase services from foreign organizations without permanent establishments in Vietnam, and overseas individuals who are non-residents in Vietnam, including cases:

📌 Repair of means of transport, machinery, and equipment (including supplies and spare parts);

📌 Advertising and marketing;

📌 Investment and trade promotion;

📌 Brokerage to sell goods and provide services abroad;

📌 Training;

📌 Division of charges for an international post or telecommunications services provided outside Vietnam between Vietnamese and foreign partners, and the lease of transmission lines and satellite frequency bands from foreign countries according to the provisions of law.

3. Non-business organizations and individuals shall not have to pay VAT when selling their assets.

4. Organizations and individuals that transfer investment projects on production or trading of goods or services liable to VAT to enterprises and cooperatives.

5. Enterprises and cooperatives that pay VAT by the deduction method and sell unprocessed or preliminarily processed cultivation, livestock, or aquatic products to other enterprises and cooperatives for commercial business purposes shall not have to declare, calculate and pay VAT.

➡️ In VAT invoices, they shall write selling prices being VAT-exclusive prices and cross out the VAT rate and amount lines.

✅ In case of selling to other objects such as households, business individuals, and other organizations and individuals

➡️ Declare, calculate, and pay VAT under the tax rate of 5% guided in Clause 5, Article 10 of Circular 219.

✅ Business households, individuals, enterprises, cooperatives, and other economic organizations pay VAT according to the method of calculating directly on VAT when selling unprocessed products of cultivation, husbandry, aquaculture, and fishing into other products or preliminary processing at the stage of commercial business.

➡️ Declare, calculate, and pay VAT under the rate of 1% on revenue.

6. In case a fixed asset is currently in use for which depreciation has been made when transferring according to its bookkeeping value between a business establishment and a member unit in which the business establishment owns 100% of the capital or between member units wholly owned by a business establishment to serve the production or business activities of VAT-liable products or services,

⭐ VAT invoices and VAT declaration and payment are not required.

⭐ The business establishment having fixed assets shall make an asset transfer decision or order, enclosed with a dossier on the origin of the asset.

⭐ In case an asset has been re-evaluated before transfer or is transferred to an establishment producing or providing goods or services not liable to VAT

➡️ Make a VAT invoice, declare and pay VAT according to regulations.

7. Other cases:

A business establishment is not required to declare and pay tax in the following cases:

a) Assets contributed as capital to form an enterprise. Assets contributed as capital to the enterprise must have:

• A written record of the contribution of capital for production and business, joint venture and association contracts;
• An asset valuation record made by the contributed capital delivery and receipt Council set up by capital contributors (or a valuation document issued by a functional organization according to law)
• Enclosed with a dossier on the origin of such assets.

b) Assets transferred between its dependent cost-accounting units in the enterprise; assets transferred upon its split, separation, consolidation, merger or transformation.

⚡ Assets transferred between its dependent cost-accounting member units in the business establishment; transferring an asset upon its split, separation, consolidation, merger or transformation, the business establishment must have:

• An asset transfer order,
• Enclosed with a set of dossiers on the origin of such asset, but does not have to issue an invoice.

⚡ In case an asset transferred between its independent cost-accounting units or member units having the legal person status

➡️ The business establishment shall issue a VAT invoice, declare and pay VAT under regulations, except for the cases guided in Clause 6 of this Article.

c) Amounts claimed from third parties in insurance activities;

d) Authorized collections not related to the sale of goods and services by the business establishment;

dd) Revenue of goods and services received that business establishment acts as the agents and commissions earned from acting as a sale agent selling goods at prices fixed by principal establishments for such services:

• Post and telecommunications, selling lottery tickets, air; cars, trains, ships tickets;
• International transport agents;
• Agents of aviation and maritime services that are entitled to the VAT rate of 0%;
• Insurance sales agent.

e) Revenue from goods and services and revenue from agent commissions earned from agency activities selling goods and services are not subject to VAT.

g) Business establishments are not required to pay VAT at the import stage in case they import the exported goods but are returned by foreign parties.

➡️ When business establishments sell these returned goods in the domestic market, they must declare and pay VAT according to regulations.

h. Organizations and enterprises receive remunerations from state agencies for conducting collection and payment activities on behalf of state agencies. Remuneration for collection and payment on behalf of state agencies that are not required to declare, calculate and pay VAT specified at this point are remunerations received from activities:

🍁 Collect voluntary social insurance and voluntary health insurance for the Social Insurance agency;

🍁 Paying preferential allowances for people with meritorious services and other allowances to the Ministry of Labor and Invalids and Social Affairs;

🍁 Collect taxes from individual households to tax authorities and other household incomes and expenditures for state agencies.

🍁 See more here: Circular 219/2013/TT-BTC regulating VAT.

The above is an article by TASCO Tax Agent about cases where organizations and individuals do not have to declare and pay VAT. We hope that the above information can help you in your business operations. If your business has questions that need to be answered, please contact TASCO Tax Agent in the ways below for a free consultation!! Besides, TASCO also specializes in providing tax accounting services, tax finalization for individuals and business organizations. If your business needs it, please contact TASCO Tax Agent immediately to use the service at our company with reasonable cost and perfect service quality.

TASCO - Tax agent responsible for all service

           TASCO - Give trust - get value

Please contact TASCO for a free consultation:

 Hotline: 086.486.2446 - 0975.08.68 (zalo)

 Website: dailythuetasco.com hoặc dichvutuvandoanhnghiep.vn

 Email:  lienhe.dailythuetasco@gmail.com