What tax rate do invoices in January 2023 apply?
According to Mr. Tran Lu's reflection, based on the Government's Decree No. 15/2022/ND-CP dated January 28, 2022 on tax exemption and reduction policies, Mr. Lu's business is eligible for VAT reduction from 10% to 8% applies to services from February 1, 2022-December 31, 2022.
Since Mr. Lu's service is provided to customers from December 16, 2022 to January 16, 2023, Mr. Lu's side will issue an invoice in January 2023 for the service arising during this period. Mr. Lu asked, with the invoice issued in January 2023, what tax rate does his business need to apply?
The Ministry of Finance responded to this issue as follows:
In Article 1 of the Government's Decree 15/2022/ND-CP dated January 28, 2022, stipulating the tax exemption and reduction policy according to the National Assembly's Resolution No. 43/2022/QH15 on fiscal and monetary policies to support Supporting the Program on socio-economic recovery and development, the provisions on VAT reduction are as follows:
"1. Reduction of VAT for groups of goods and services currently applying the tax rate of 10%, except for the following groups of goods and services:
a) Telecommunications, financial activities, banking, securities, insurance, real estate trading, metals and prefabricated metal products, mining products (excluding coal mining), coke, refined petroleum, chemical products. Details are in Appendix I issued together with this Decree.
b) Products, goods and services subject to excise tax. Details are in Appendix II issued together with this Decree.
c) Information technology according to the law on information technology. Details are in Appendix III issued with this Decree.
d) The reduction of VAT for each type of goods and services specified in Clause 1 of this Article shall be applied uniformly at the stages of import, production, processing, business and trade. For coal sold for sale (including the case of coal mined and then screened, classified according to a closed process before selling) subject to VAT reduction. Coal products listed in Appendix I to this Decree are not eligible for VAT reduction at other stages other than mining.
In case the goods and services mentioned in Appendices I, II and III issued together with this Decree are not subject to VAT or subject to 5% VAT according to the provisions of the Law on VAT, the following provisions shall apply according to provisions of the Law on VAT and not eligible for VAT reduction.
2. VAT reduction
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:
"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 Appendices I, II, III issued together with Decree 15/2022/ND-CP; Decree 123/2020/ND-CP dated October 19, 2020 of the Government providing for invoices and documents:
Article 4 stipulates principles for 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 of goods and services used for promotion, advertising, sample goods; goods and services used for giving, exchanging, paying for employees' wages and internal consumption, except for goods circulated internally to continue the production process); export goods in the form of loan, 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.
Article 9 stipulates the time of making invoices:
"… 2. Time of invoicing 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 collects money before or while providing the service, the time of making an invoice is the time of collecting money (excluding the case of collecting a deposit or an advance to ensure the performance of the supply contract which provides services: accounting, auditing, financial and tax consulting; valuation; survey, technical design; supervision consultancy; construction investment project formulation).
Based on the above provisions, in case his company calculates VAT by the deduction method, provides services that are applying the VAT rate of 10% and is not on the list of goods and services specified in Appendix II. Appendix I, II, III promulgated under Decree 15/2022/ND-CP, the VAT rate of 8% as prescribed in Clause 2 Article 1 of Decree 15/2022/ND-CP shall apply from 1/ January 2022 to the end of December 31, 2022.
The time to determine VAT for service provision is the time when the service is completed or the service invoice is issued, regardless of whether money has been collected or not as prescribed in Article 2 of this Law. 8 Circular 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance. In case the Company signs a contract to provide services that are eligible for VAT reduction according to Decree 15/2022/ND-CP, but the service is completed and invoiced after December 31, 2022, it is not applicable. VAT reduction policy according to Decree 15/2022/ND-CP.
According to Government Newspaper.
By: According to Government Newspaper./ Translator: LeAnh-Bizic
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