Currently, with new regulations on the change in the application of VAT rates, it leads to misunderstandings or errors in the application of a reasonable tax rate to previously signed contracts. Through today’s article, Pham Consult will clarify this issue.
Goods sale and purchase contracts signed in early 2023, extending the implementation process after July 1, 2023, apply VAT 8% or 10%?
Implementing Resolution 101/2023/QH15 and Decree 44/2023/ND-CP, the reduction of value-added tax from 10% to 8% will only apply in the last 6 months of 2023 and specifically until the end of 31. December 2023.
Regarding the issue of contracts signed before July 1, 2023 and extending the implementation process until after July 1, 2023, according to the provisions of Article 8 of Circular 219/2013/TT-BTC guiding the The time for calculating value added tax is as follows:
Time to determine VAT
- For the sale of goods, it is the time when the ownership or the right to use the goods is transferred to the buyer, regardless of whether the money has been collected or not.
Accordingly, the time to determine the corresponding value-added tax for goods sale and purchase contracts is as follows:
– In case the contract signed before July 1, 2023 is a contract for the sale and purchase of goods, first of all, the goods in the contract must be eligible for VAT reduction according to the provisions of Clause 1, Article 1 of Decree 44/2023. /ND-CP.
According to the provisions of Clause 1, Article 8 of Circular 219/2013/TT-BTC, for goods sale and purchase contracts, the time to determine value-added tax is the time of transferring the ownership or the right to use the goods. to the buyer, regardless of whether money has been collected or not.
Thus, in case the contract for the sale of goods is signed from January 1, 2023 to before July 1, 2023, but the buyer and seller have not yet transferred the ownership or right to use the goods. whether the money has been collected or not, the 10% VAT rate will apply and when the parties transfer the goods after July 1, 2023, at this time the goods are subject to value added tax. increased by 8%.
In case the two parties buying and selling goods have transferred the ownership or the right to use the goods before July 1, 2023, the time will be considered as the time when VAT has been determined, so the VAT rate 10% will be applied.
Signing a contract to import goods in the first 6 months of 2023 but implementing after July 1, 2023, how much VAT will be applied?
According to the provisions of Clause 6, Article 8 of Circular 219/2013/TT-BTC on the time of determination of VAT for imported goods as follows:
Time to determine VAT
- For imported goods, it is the time of customs declaration registration.
At the same time, in Article 25 of the Customs Law 2014 stipulates the time for submitting customs declarations as follows:
Deadline for submission of customs documents
- The time limit for submitting the customs declaration is prescribed as follows:
- a) For exported goods, to be paid after the goods have been gathered at the place notified by the customs declarant and at least 04 hours before the means of transport leave the country; for export goods sent by express delivery service, at least 02 hours before the means of transport leave;
- b) For imported goods, pay before the date of arrival at the border gate or within 30 days from the date of arrival of the goods at the border gate;
- c) The time limit for submission of customs declarations for means of transport complies with Clause 2, Article 69 of this Law.
- The customs declaration is valid for customs clearance within 15 days from the date of registration.
- The time limit for submission of relevant documents in the customs dossier is prescribed as follows:
- a) In case of electronic customs declaration, when the customs authority conducts the inspection of the customs dossier and the physical inspection of goods, the customs declarant shall submit the paper documents included in the customs dossier, except for those already in the national single window information system;
- b) In case of paper customs declaration, the customs declarant must submit or present relevant documents when registering the customs declaration.
Thus, according to the above provisions, the imported goods in the goods import contract signed in the first 6 months of 2023 are determined as follows:
– If the goods import contract is signed from January 1, 2023 to July 1, 2023, and the time of customs declaration registration is before July 1, 2023, the 10% VAT rate will apply. After July 1, 2023, the VAT rate of 8% will be applied.
If a service provision contract is signed from the date before July 1, 2023 and lasts after July 1, 2023, is the value added tax rate 8% or 10%?
First of all, to determine this problem, the service in the signed contract must be subject to the 10% VAT rate and VAT reduction according to Decree 44/2023/ND-CP.
Pursuant to Clause 2, Article 8 of Circular 219/2013/TT-BTC on the time of value-added tax determination of service supply contracts as follows:
Time to determine VAT
- For service provision, it is the time when the service is completed or the service provision invoice is issued, regardless of whether money has been collected or not.
For telecommunications services, it is the time to complete the verification of data on telecommunications connection service charges under economic contracts between telecommunications service providers, but no later than 2 months from the date of issuance. charges for telecommunication connection services.
Accordingly, for service supply contracts, the time to determine value added tax is the time when the service is completed or the service provision invoice is issued, regardless of whether money has been collected or not. have not received the money.
Thus, it can be determined as follows:
– In case the service supply contract is signed between January 1, 2023 and July 1, 2023 but the service provision is completed after July 1, 2023, at the time of completion, success is the time to determine the value added tax with the tax rate of 8%.
– In case the service supply contract signed from January 1, 2023 to July 1, 2023 extends the implementation process to after July 1, 2023 but collects money in advance or collects money within During the implementation process, the time to determine value-added tax is the time of making invoices, and the time of making invoices is also the time of collecting money as prescribed in Clause 2, Article 9 of Decree 123/2020/ND-CP. :
- 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). provides the following services: accounting, auditing, financial and tax consulting; valuation; survey, technical design; supervision consultancy; construction investment project formulation).
- In case of multiple delivery or handover of each service item or stage, each delivery or handover must issue an invoice for the volume and value of the delivered goods or services respectively.
Accordingly, the provision of payment collection services before or during the period from July 1, 2023 to the end of December 31, 2023, the VAT rate of 8% will be applied.
In addition, according to the provisions of Clause 3, Article 9 of Decree No. 123/2020/ND-CP, if the service provision contract collects money during implementation and is handed over in stages, the time for calculating value tax shall be determined. increments based on invoice date.
For example: Enterprises issue invoices for the performance of service supply contracts from January 1, 2023 to the end of July 1, 2023, during this period, invoices are issued with the VAT rate of 10% and From July 1, 2023, the VAT rate is 8%.
Thus, the article on Pham Consult introduced and clarified more about which VAT rate is applied to the Goods Purchase and Sale Contracts signed in early 2023, extending the implementation process beyond July 1, 2020. 2023. Hope this content will be useful to you.
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