Perfecting regulations on VAT policy
Authorized by the Prime Minister to present the Report on the draft Law on Value Added Tax (amended), Minister of Finance Ho Duc Phoc said that the purpose of the proposed amendment to the Law is to perfect the regulations on VAT policies to cover all revenue sources, expand the revenue base; ensure transparency, ease of understanding, and ease of implementation of the Law to contribute to improving the capacity and effectiveness of tax management activities in preventing and combating tax evasion, tax losses and tax debts; ensure the correct and sufficient collection of revenue for the State budget, and ensure the stability of State budget revenue.
At the same time, innovate the contents and provisions in the direction of increasing regulations, legalizing regulations that have been stably implemented in sub-law documents (Decrees, Circulars) to reform administrative procedures; reform tax management procedures in the direction of simplicity, clarity, consistency, policy stability, implementing electronic tax management, protecting taxpayers' rights, creating a favorable environment for taxpayers to comply with tax laws, voluntarily pay taxes correctly, fully, and promptly to the State budget...
According to Minister of Finance Ho Duc Phoc, the draft Law is basically inherited from the current Law but has been adjusted and supplemented to be consistent with the policy content. Accordingly, the draft Law retains the provisions in 5 Articles of the current Law on VAT, including: scope of regulation (Article 1); VAT (Article 2); taxable subjects (Article 3); tax basis (Article 6); tax calculation method (Article 9).
Amending and supplementing the contents stipulated in 11 Articles of the current Law on VAT, including: taxpayers (Article 4); non-taxable subjects (Article 5); taxable price (Article 7); tax rate (Article 8); tax deduction method (Article 10); direct calculation method on VAT (Article 11); input VAT deduction (Article 12); tax refund cases (Article 13); invoices and documents (Article 14); effective date (Article 15); implementation organization (Article 16). At the same time, adding 1 Article regulating the time of determining VAT and 1 Article regulating prohibited acts.
Regarding some specific contents, regarding the price for calculating VAT, Minister of Finance Ho Duc Phoc said that the amendment to the regulation on the taxable price for imported goods is the value for calculating import tax according to the provisions of the law on export tax, import tax plus taxes which are additional import tax according to the provisions of the law (if any), plus special consumption tax (if any) and plus environmental protection tax (if any) to ensure compliance with specialized laws (point b, clause 1, Article 7 of the draft Law).
Supplement specific regulations on tax calculation prices for 2 groups of goods and services to legalize the regulations being implemented stably in sub-Law documents including: goods and services used for promotion according to the provisions of the law on commerce (point c, clause 1, Article 7 of the draft Law); business services: casinos, electronic games with prizes, betting (point l, clause 1, Article 7 of the draft Law).
Supplementing regulations on determining land prices to be deducted when determining taxable prices for real estate business activities, taxable prices for specific production and business activities (electricity production activities of Vietnam Electricity Group; transportation, loading and unloading; tourism services in the form of travel; pawn services; books subject to VAT sold at the correct published price (cover price);...) according to Government regulations to ensure the legal basis for the authority assigned to the Government and legalize the regulations that have been implemented stably, in accordance with the current situation (points h, m, clause 1, Article 7 of the draft Law).
At the same time, add 1 Article (Article 8) to the draft Law on the time of determining VAT to legalize the regulations being stably implemented in sub-law documents.
Regarding input VAT deduction, Minister of Finance Ho Duc said that the draft amended Law stipulates cases where business establishments discover that the input VAT amount when declaring and deducting is incorrect or missing to avoid difficulties in implementation and to be consistent with the provisions of the Law on Tax Administration (Point d, Clause 1, Article 14 of the draft Law).
Supplementing regulations on input VAT deduction to legalize some regulations that have been stably implemented in sub-law documents, for example: accounting for expenses to calculate corporate income tax for non-deductible input VAT (point e, clause 1, Article 14 of the draft Law); conditions for input VAT deduction for VAT payment documents on behalf of foreign parties (point a, clause 2, Article 14 of the draft Law);...
Supplementing regulations on input VAT deduction for cases (goods and services forming fixed assets serving workers in production and business areas and housing, medical stations for workers working in industrial parks and economic zones; passenger cars with 9 seats or less; input VAT deduction of production and business establishments with closed production, centralized accounting and using products not subject to VAT to produce VAT-taxable goods;...) implemented in accordance with Government regulations to ensure the legal basis for the authority assigned to the Government and legalize the regulations that have been implemented stably, in accordance with the current situation (point g, clause 1, Article 14 of the draft Law)...
In addition, the draft Law also amends a number of contents related to: taxpayers; tax rates; subjects not subject to VAT; VAT refunds; invoices, documents, etc.
Need to amend VAT Law
Reporting on the review of the draft Law, Chairman of the National Assembly's Finance and Budget Committee Le Quang Manh said that the Finance and Budget Committee agreed on the necessity of amending the Law to address practical shortcomings as well as improve the collection policy, in line with the goals set out in the Tax System Reform Strategy to 2030 and Plan No. 81/KH-UBTVQH15 of the National Assembly Standing Committee.
Regarding some specific contents, regarding the level of revenue from the sale of goods and services not subject to VAT, the Chairman of the Finance and Budget Committee of the National Assembly said that the draft amended Law stipulates that the annual revenue level from 100 million VND or less is not subject to VAT (according to the provisions of the current Law) to "below the level prescribed by the Government". The Finance and Budget Committee believes that amending and adjusting the regulations on the threshold of annual revenue not subject to VAT is necessary to suit the current socio-economic development situation and needs to be specifically stipulated in the Law to establish a clear legal basis.
Regarding input VAT deduction, Mr. Le Quang Manh said that regarding additional declaration and deduction, the Finance and Budget Committee agreed with the amendment in the direction of clearly stipulating that for invoices that are omitted or incorrectly declared, businesses will make additional declarations in the period in which the error is discovered (not in the period in which the error occurs) to unify understanding and implementation.
However, in cases where enterprises make false declarations, including cases of using illegal invoices to increase the amount of tax deductible or refunded, the amendment of the Drafting Agency in the direction of applying Article 47 of the Law on Tax Administration is inappropriate because this provision allows enterprises to still supplement tax declaration dossiers after a decision on tax inspection and examination has been issued, invalidating the inspection and post-audit work and is inconsistent with tax management practices. Therefore, in cases of false declarations, it is recommended to keep the current regulations.
Regarding the conditions for tax deduction and application of 0% tax rate, Mr. Le Quang Manh said that the draft Law supplements the provisions on "... VAT payment documents on behalf of foreign parties" and assigns "the Minister of Finance to prescribe...". These are new contents and are directly related to the issue of VAT collection management for foreign suppliers selling goods and services to Vietnam on the basis of digital platforms. It is recommended that the Drafting Agency clarify the current regulations as well as the direction of regulations in sub-law documents for this content.
In addition, the draft Law adds provisions on conditions for deducting input VAT for exported goods and services. The Finance and Budget Committee agrees to add stricter regulations to improve the effectiveness and efficiency of VAT refund management, avoiding the situation where enterprises take advantage of legal loopholes to profit, causing losses to the State budget. However, to ensure the clarity, specificity and transparency of the regulations, it is recommended to clearly identify special cases so that they can be specifically regulated in the Law and not assign the Government to regulate this issue.
The draft Law on VAT (amended) consists of 04 Chapters and 18 Articles, specifically as follows: Chapter I. General provisions, including 05 articles (from Article 1 to Article 5); Chapter II. Basis and method of tax calculation, including 07 articles (from Article 6 to Article 12); Chapter III. Tax deduction and refund, including 04 articles (from Article 13 to Article 16); Chapter IV. Implementation provisions, including 02 articles (Article 17 and Article 18).
Source: https://baotainguyenmoitruong.vn/nang-cao-hieu-qua-hoat-dong-quan-ly-thue-dam-bao-on-dinh-nguon-thu-ngan-sach-375585.html
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