To:  Provincial Departments of Taxation 

On October 19, 2021, the Standing Committee of National Assembly has promulgated the Resolution No. 406/NQ-UBTVQH15 introducing certain measures for supporting enterprises and individuals affected by Covid-19 pandemic (hereinafter referred to as “Resolution”).

On October 27, 2021, the Government has promulgated the Decree No. 92/2021/ND-CP providing guidelines for implementation of the Resolution.

On October 28, 2021, the Ministry of Finance has sent the Official Dispatch No. 12373/BTC-TCT on implementation of the Resolution No.406/NQ-UBTVQH15 to provincial People’s Committees and some relevant Ministries.

In order to effectively implement the Resolution, following the Official Telegram No. 08/CD-TCT dated October 22, 2021, the General Department of Taxation hereby gives some guidelines as follows:

1. The General Department of Taxation has sent copies of the full text of the Government’s Decree No. 92/2021/ND-CP dated October 27, 2021 to provincial Departments of Taxation for implementation.  During the implementation of the Resolution and Decree, provincial Departments of Taxation should facilitate enterprises, organizations and individuals, and carry out supervision of prices of goods and services (exclusive of VAT) provided by local enterprises and organizations after November 01, 2021 so as to ensure that consumers may benefit from VAT reduction policy as prescribed in Clause 3 Article 1 and Clause 1 Article 2 of the Resolution. If any entities are found to take advantage of the State policies to increase the prices of goods/services on which VAT is reduced, provincial Departments of Taxation shall consult provincial People’s Committees about actions against such cases.

2. Regarding issuance of invoice for goods and services on which VAT is reduced:

Clause 3 Article 3 of the Decree No. 92/2021/ND-CP prescribes procedures for VAT reduction as follows:

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a) When issuing VAT invoices for goods/services on which VAT is reduced, the entities specified in Point a Clause 2 of this Article shall specify the “prescribed VAT rate (5% or 10%) x 70%” in the line of VAT rate, VAT amount payable, and total amounts payable on the issued invoice. The goods seller or service provider shall declare output VAT and the goods buyer or service user shall declare input VAT according to the VAT amount specified in the VAT invoice.

b) When issuing sales invoices for goods/services on which VAT is reduced, the entities specified in Point b Clause 2 of this Article shall specify the full amounts of goods or services before VAT reduction in the column “Amounts”, and total amounts payable after VAT reduction (by 30% of revenue) in the line "Total amounts of goods or services", and the note "an amount of......., equivalent to 30% of total VAT amount payable, is reduced according to Resolution No. 406/NQ-UBTVQH15” on the issued invoice.”

Examples:

Example 1:

Company A that pays VAT adopting the credit-invoice method provides transport service for Company B under a service contract signed by and between two parties, and the taxable price is VND 20.000.000. The transport service is subject to 10% VAT rate and eligible for VAT reduction by 30% from November 01, 2021 to December 31, 2021. On November 15, 2021, Company A provides transport service for Company B, so Company A shall issue a VAT invoice to Company as follows:

In column “Goods or services”: “transport service”

Price: VND 20.000.000

VAT rate: “10% x 70%”

VAT payable:  “VND 1.400.000”

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Based on the issued VAT invoice, Company A declares output VAT and Company B declares input VAT according to the VAT amount payable, which has been reduced, specified in the issued invoice, i.e. VND 1.400.000.

Example 2:

The organization X that pays VAT on its revenue provides accommodation service for client Y for 02 days in November, 2021 at the listed price as VND 1.500.000/day. Pursuant to Clause 2 Article 13 of the Circular No. 219/2013/TT-BTC dated December 31, 2021 of the Ministry of Finance, VAT shall be charged on the accommodation service at the rate of 5% on earned revenue.  While enjoying VAT reduction under the Resolution No. 406/NQ-UBTVQH15 of the Standing Committee of National Assembly, organization X shall calculate VAT amount reduced and issue a sales invoice to client Y as follows:

In column “Goods or services”: “Accommodation service”

In column “Amounts”: “VND 3.000.000” (VND 1.500.000 x 2)

VAT amount reduced: VND 3.000.000 x 5% x 30% = VND 45.000

In column “Total amounts of goods or services” (i.e. amounts payable to the seller), an amount of “VND 2.955.000” which is the amount payable after VAT reduction by 30% on revenue, and the note “an amount of VND 45.000, equivalent to 30% of the revenue, is reduced according to Resolution No. 406/NQ-UBTVQH15” shall be specified.

All Provincial Departments of Taxation are requested to strictly comply with guidelines herein. Difficulties that arise during the implementation of this document should be reported to the General Department for consideration./.

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PP. DIRECTOR GENERAL 
DEPUTY DIRECTOR GENERAL





Vu Xuan Bach