Value added tax is one of the taxes that businesses must pay to the state when establishing a company. There are three main methods of VAT calculation: deduction method, direct method on VAT and direct method on revenue. Today's article Giaiphapdonggoi.net will learn with you how to calculate VAT according to the deduction method about applicable objects, application conditions and calculation formulas
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1. When does an enterprise calculate VAT by the credit method?
According to the provisions of Article 12 of Circular 219/2013/TT-BTC, the tax credit method is applied to calculate VAT for business establishments that fully implement the accounting and invoice regime. As follows:
When do businesses calculate VAT by the deduction method?
Case 1: An operating business establishment may apply the tax credit method when fully meeting the following 02 conditions:
Enterprises with annual revenue from selling goods and providing services of VND 01 billion or more.
The annual turnover is determined by the business establishment on the basis of the total target "Total sales of goods subject to VAT" on the VAT declaration.
For a business establishment that suspends operations for the whole year, it shall be determined according to the turnover of the year preceding the year of business suspension.
Fully implement accounting, invoice and voucher regimes in accordance with the law on accounting, invoices and vouchers.
The reason why a business establishment that fully implements the accounting and invoice regime can apply the tax credit method when calculating VAT is because the business establishment has fully implemented the accounting, invoice and voucher regime. then there is a basis for determining the input VAT amount and output VAT amount.
Case 2: Business establishments voluntarily apply.
According to the provisions of Clause 3, Article 12 of Circular 219/2013 TT-BTC (amended by Circular 119/2014/TT-BTC), business establishments that voluntarily register to apply the tax credit method include: :
Operating enterprises/cooperatives with annual turnover of less than 1 billion VND in sales of goods and provision of services subject to VAT and have fully complied with the accounting regime, books, invoices and documents according to regulations. regulations on accounting, invoices and vouchers. (Notice of application of the VAT calculation method will have to be sent to the tax authority directly managing it no later than December 20 of the year before the year the taxpayer implements the new VAT calculation method).
New enterprises established from investment projects of existing business establishments pay VAT by the credit method.
Newly established enterprises/cooperatives that invest, purchase, receive capital contributions with fixed assets, machinery, equipment, tools, tools or have a lease contract for a business location.
Foreign organizations and individuals doing business in Vietnam under bidding or subcontracting contracts.
Other economic organizations may account input and output VAT, except for enterprises and cooperatives.
Case 3: Foreign organizations or individuals providing goods and services of oil and gas prospection, exploration, development and exploitation pay tax by the VAT credit method, which the Vietnamese party declares, deducts and pays on behalf of. .
2. How to calculate VAT by deduction method?
How to calculate VAT by deduction method?
Amount of VAT payable = Output VAT amount - Deducted input VAT amount
Inside:
The output VAT amount is equal to the total VAT amount of the sold goods and services stated on the VAT invoice.
Output VAT = taxable price of taxable goods sold x VAT rate
The amount of input VAT to be deducted is equal to = the total amount of VAT written on the VAT invoice for goods and services purchased.
Special cases:
For special invoices such as stamps, freight tickets, lottery tickets, which have VAT included in the invoice, the accountant must separate tax according to the following formula:
Price without tax = Paid price (money for stamps and tickets) / (1 + tax rate (%))
=> VAT payable = payment price (sales of stamps, tickets...) - price exclusive of tax
Attention:
Amount of VAT payable = Output VAT amount - Deducted input VAT amount
According to the above formula:
If the payable VAT amount is > 0, the output VAT amount must be greater than the input VAT amount, but the enterprise may not have to pay tax because it will depend on the amount of VAT deducted from the previous period and carried over to the next period.
If the payable VAT amount is < 0, the input VAT amount that has not been fully deducted in the month (for the case of monthly declaration), in the quarter (for the case of quarterly declaration) will be deducted in the next period. after.
Example: ABC Company Limited calculates VAT payable in the second quarter of 2014:
Amount of VAT payable = 5 million - 3 million = 2 million
But in the first quarter of 2014 the company has 2 million input VAT that has not been deducted will be deducted to the second quarter of 2014, so the payable VAT amount of the second quarter is 0, or in the case of accrual. After at least four quarters from the first quarter, if the input VAT has not been fully deducted but the input VAT has not been fully deducted, the company will be refunded.
The above are the contents related to the issue of VAT calculation according to
deduction method. Hope it will be useful for readers.
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