1. Business establishments voluntarily register to apply the tax credit method
Pursuant to Clause 3, Article 12 of Circular 219/2013/TT-BTC as amended by Clause 3, Article 3 of Circular 119/2014/TT-BTC, which stipulates that establishments may voluntarily register to apply the tax credit method, consists of:
- Enterprises and cooperatives:
- Operating enterprises and cooperatives with annual revenue from the sale of goods and provision of services subject to VAT under VND 1 billion have fully implemented the accounting, book, invoice and voucher regimes according to regulations. regulations on accounting, invoices and vouchers.
- New enterprises established from investment projects of operating business establishments shall pay value-added tax by the deduction method. Newly established enterprises that make investments according to investment projects approved by competent authorities are subject to voluntary registration to apply the tax credit method.
- Newly established enterprises and cooperatives whose investment projects are not subject to approval by competent authorities in accordance with the law on investment but have investment plans decided by competent persons of the enterprise. approved investment decision subject to registration for application of the tax credit method.
- Newly established enterprises or cooperatives that invest, purchase, receive capital contributions with fixed assets, machinery, equipment, tools, tools or have a contract to rent a business location.
- Foreign organizations and individuals, economic organizations:
- Foreign organizations and foreign individuals doing business in Vietnam under contractor contracts or sub-contractors.
- Other economic organizations that can account input and output VAT do not include enterprises and cooperatives.
2. Other cases
According to Clause 3, Article 3 of Circular 119/2014/TT-BTC, other cases where the VAT credit method is applied are as follows:
In case a business establishment has activities of buying, selling and processing gold, silver and gems, the business establishment must separately account this activity for tax payment according to the method of direct calculation on added value.
For enterprises that are paying VAT according to the credit method and have established branches (including branches established from investment projects of enterprises), specifically:
- If the branch is subject to separate VAT declaration according to the provisions of the tax administration law, the tax calculation method of the branch shall be determined according to the tax calculation method of the operating enterprise.
- In case the branch does not directly sell goods, does not generate revenue, or the branch is located in the same province or city where the enterprise's head office is located but does not make separate declarations, the tax declaration shall be concentrated at the head office. corporate headquarters.
For other newly established enterprises and cooperatives that are not in the cases of voluntary registration to apply the deduction method, the direct calculation method shall be applied.
- Tax registration procedures:
Previously, in order to voluntarily apply the tax credit method, enterprises had to submit a Notice of application of the value-added tax calculation method (Form 06/GTGT issued together with Circular 156/2013/TT-BTC). ) before the deadline for submitting the first quarterly VAT declaration to the tax authority directly managing it.
However, from the effective date of Circular 93/2017/TT-BTC, newly established enterprises in the above cases will no longer have to submit Form 06/GTGT to voluntarily register to apply the deduction method. Instead, the tax authority will base on the type of VAT declaration that the enterprise submits in the first quarter VAT declaration period to determine which tax calculation method the enterprise applies. Specifically:
- Applying the tax credit method, the enterprise uses the VAT declaration No. 01/GTGT; or, VAT declaration No. 02/GTGT if there is an investment project.
- Applying the direct calculation method, the enterprise uses the VAT declaration No. 04/GTGT; or, VAT declaration No. 03/GTGT if there are activities of buying, selling, processing gold, silver and gems.
Note:
- Enterprises are not required to submit documents and documents proving that their side is eligible for voluntary registration of applying the tax credit method; but instead, must be kept and presented to the tax authorities upon request.
Enterprises, if they have activities of buying, selling and processing gold, silver and precious stones; then, this activity must be separately accounted for to pay tax by the direct method of calculating VAT multiplied by the VAT rate.
