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Tax accounting

WHAT IS VAT? WHAT ACCOUNTANTS SHOULD KNOW ABOUT VALUE-ADDED TAX

THUẾ VAT LÀ GÌ? NHỮNG ĐIỀU KẾ TOÁN NÊN BIẾT VỀ THUẾ GÍA TRỊ GIA TĂNG

Currently for each of us VAT is a term that is not too strange. However, to understand and understand the related issues, not everyone knows. Therefore, today viecoi will reveal you the information related to VAT right below the article below.

The correct answer to the concept of VAT

VAT stands for "Value Added Tax" – a term commonly known as value added tax, also known as VAT. VAT is the indirect tax and calculated on the added value of goods and services … arises from the production process, circulation until it reach the consumer.

Specifically, VAT is a sales tax that is taxed on each stage of production and circulation of goods products, from the time of being raw materials to finished products and finally the consumption stage. Therefore, we also call VAT by a more familiar name, sales tax with the deduction of previously paid tax amounts.

Most value-added tax is added to the selling price of goods and services and is beared by consumers themselves when buying and using products (services). But before that, this part of VAT will be paid by businesses to pay that tax to functional units before consumers buy or use their services.

That said, the coverage of VAT is very wide and regulated with most of the goods and services available on the market today.

Basics of accounting can not be ignored about VAT

1. Cases subject to VAT

Goods and services used for production, business and related to consumption in Vietnam are subject to VAT, except for those not subject to tax in accordance with the Law on VAT and relevant legal documents guiding the enforcement

2. Subjects subject to VAT payment

Vat-paying subjects are organizations and individuals producing and trading in taxable goods and services (referred to as business establishments in accordance with the relevant promulgating law) and other organizations and individuals importing taxable goods (easy to understand and commonly referred to as importers) who need to pay VAT.

3. Basis and method of VAT calculation

3.1 The basis for VAT calculation is to go according to the taxable price and export tax

According to the regulations set by the relevant authorities, the VAT taxable price is prescribed as follows:

– Goods and services of VAT-free selling prices

– Imported goods = Import price at border gate + Import tax + Excise tax (if any)

– Goods and services within the scope of: exchange, internal, donation = VAT-liable price of goods and services of the same or equivalent type at the time such activities arise

– Property rental = Rent collected in each period

– Goods sold by installment method = Selling price calculated at the selling price paid once, not calculated according to the amount paid each time

– Processed goods = processed price

– The sub-government will regulate the price for other goods and services not mentioned above.

VATable prices for goods and services specified include surcharges + additional charges enjoyed by business establishments

In case taxpayers have revenues and sales in foreign currencies, vat taxable prices = Deposits converted into foreign currencies into Vietnamese dong at the exchange rate of relevant banks shall be announced at the time of in which sales arise

The VAT rate is subject to the following regulations:

– Tax rate = 0% for exported goods

– Depending on the goods, services … different tax rates are specified on the VAT rate table, the tax rate will be flexible differently: 5%, 10%…

3.2 Vat calculation method

There are 2 main methods: tax deduction method and direct calculation method on VAT

4. How VAT refunds are calculated

Vat refunds will be made in the following cases:

– If the deductible input tax amount of the months in the quarter is greater than the output tax amount or the input tax refund of fixed assets, taxpayers under the tax deduction method shall be considered for quarterly tax refund

– Tax final settlement upon merger, merger or separation, bankruptcy with overpayment tax amounts.

– Decisions on tax refund handling by competent agencies as prescribed by law.

Above is the basic information about VAT and the accounting things to consider as well as pay attention in the process of work to avoid unnecessary mistakes, hopefully viecoi has brought useful information to you.