Ms. Hien asked, the application for acceptance is signed and approved by the investor in 2022, but after 2023, the final value will be added to the table, is the applicable VAT rate 10% or 8%?

Construction works and settlements are made during the period of VAT reduction (according to Decree No. 15/2022/ND-CP) with a tax rate of 8%, but it will not be signed by the investor until 2023. So, in 2023, when issuing VAT invoices, can the company still record 8% tax according to the established settlement value?

E-invoices are issued according to the date of issuance of the tax authority's code, if after December 31, 2022, the company receives the approved finalization file of the end of 2022 with tax of 8%, so can the tax unit allow the issuance of 8% VAT invoices in 2023?

The Tax Department of Binh Duong province responded to this problem as follows:

Pursuant to the Government's Decree No. 15/2022/ND-CP dated January 28, 2022 on tax exemption and reduction policies, VAT reduction regulations are as follows:

- In Article 1, VAT reduction:

"Article 1. VAT reduction

1. Reduced VAT for groups of goods and services currently applying the 10% tax rate, except for the following groups of goods and services:

…2. VAT reduction rate

a) Business establishments that calculate VAT by the credit method may apply the VAT rate of 8% for goods and services specified in Clause 1 of this Article…”

- Article 3 provides for the effect and organization of implementation:

"Article 3. Implementation effect and organization of implementation

1. This Decree takes effect from February 1, 2022.

Article 1 of this Decree shall apply from February 1, 2022 to the end of December 31, 2022…”

Pursuant to the Government's Decree No. 123/2020/ND-CP dated October 19, 2020 on invoices and documents:

- In Clause 1, Article 4, the principles of invoicing are prescribed:

"Article 4. Principles of making, managing and using invoices and vouchers

1.When selling goods or providing services, the seller must issue an invoice to deliver to the buyer (including cases where goods and services are used for promotion, advertising, or samples; goods and services used for giving, exchanging, paying wages for employees and for internal consumption (except for goods circulating internally to continue the production process); export goods in the form of loans, or return of goods) and must fully record the contents as prescribed in Article 10 of this Decree. In case of using e-invoices, it must follow the standard data format of the tax authorities as prescribed in Article 12 of this Decree…”

- At Point c, Clause 4, Article 9 stipulating the time of making invoices.

"4. Time for making invoices for some specific cases is as follows:

…c) For construction and installation activities, the time of invoice issuance is the time of acceptance and handover of works, work items, completed construction and installation volumes, regardless of whether the money has been received or not. 

Pursuant to Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance guiding the implementation of the Law on Value-Added Tax and Decree No. 209/2013/ND-CP dated December 18, 2013 of the Government detailing and guiding the implementation of a number of articles of the Law on Value-Added Tax:

- Clause 5, Article 8 stipulates the time of VAT determination.

"Article 8. Time of VAT determination

…5. For construction and installation, including shipbuilding, is the time of acceptance, handover of works, work items, completed construction and installation volumes, regardless of whether money has been collected or not. 

- Pursuant to Article 24 of Decree No. 125/2020/ND-CP dated October 19, 2020 of the Government providing for penalties for violations against regulations on making invoices when selling goods and services:

"Article 24. Sanctions for violations of regulations on making invoices when selling goods and services

1. A warning shall be imposed for one of the following acts:

a) Invoices are issued at the wrong time but do not lead to late performance of tax obligations and there are extenuating circumstances;

…3. A fine ranging from VND 3,000,000 to VND 5,000,000 shall be imposed for making invoices at the wrong time but not leading to late performance of tax obligations, except for the case specified at Point a, Clause 1 of this Article.

4. A fine of between VND 4,000,000 and 8,000,000 shall be imposed for one of the following acts:

a) Making invoices at the wrong time as prescribed by law on invoices for selling goods or providing services, except for the case specified at Point a, Clause 1 and Clause 3 of this Article;…”

Based on the above provisions, the Tax Department replied in principle to her as follows:

In case, the company signs a construction and installation contract, the time of making an invoice is the time of acceptance and handover of the work, work items, completed construction and installation volume, regardless of the money has been received or not.

In case the Company issues VAT invoices after December 31, 2022, the VAT reduction policy as prescribed in Article 3 of the Government's Decree No. 15/2022/ND-CP dated January 28, 2022.

In case the Company issues invoices when selling goods and services at the wrong time as prescribed by law, penalties for violations of regulations on invoicing when selling goods and services shall be applied as prescribed Article 24 Decree No. 125/2020/ND-CP dated October 19, 2020 of the Government.

Ms. Mai Thanh Hien is requested to base on the above instructions and compare with the actual situation at the unit to comply with regulations.