What do tax rate apply for service in 2022 and invocing in 2023?
Ms. Dang Thi Thu Trang's company (Dong Nai) has used some outsourced services that are eligible for VAT reduction from 10% to 8% and applied in 2022, now there is one last payment period for the service in December 2022, ending service on December 25, 2022.
Because Ms. Trang's company needs to review and adjust costs, it will be possible to issue invoices after January 1, 2023.
Ms. Trang asked, if your company issues an invoice after January 1, 2023 for the cost of services used before December 31, 2022, will the VAT be 8% or 10%? Are there any guidelines for determining VAT with suppliers?
Dong Nai Tax Department responded to this problem as follows:
Pursuant to Clause 2, Article 9 of Decree No. 123/2020/ND-CP dated October 19, 2020 of the Government stipulating the time of making invoices:
"... 2. Time of invoice for service provision is the time of completion of service provision, regardless of whether money has been collected or not. In case the service provider has collected money before or during service provision, the time of making invoices is the time of collecting money (excluding the case of collecting deposits or advances to ensure the performance of contracts for provision of services: accounting, auditing, etc., financial and tax consulting; valuation; survey, technical design; supervision consultancy; construction investment project formulation)".
Pursuant to Article 3 of Decree No. 15/2022/ND-CP dated January 28, 2022 of the Government:
"1. This Decree takes effect from February 1, 2022.
Article 1 of this Decree applies from February 1, 2022 to the end of December 31, 2022.
Based on the above guidance, in case her company uses services in the group of goods and services eligible for VAT reduction according to Decree No. 15/2022/ND-CP dated January 28, 2022 of the Government, if the time of making invoices from February 1, 2022 to December 31, 2022, the VAT rate of 8% will be applied. From January 1, 2023, the VAT rate shall comply with the current Law on VAT.
Dong Nai Tax Department notifies the company to know and strictly comply with the provisions of legal documents.
By: Translator: LeAnh-Bizic/According to Mai Chi (Government Newspaper)
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