Upgrading invoicing software to meet regulations on reducing VAT rate

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The General Department of Taxation adds the tax rate of 8% for tax payers to select when making invoices.

On January 11, 2022, the National Assembly issued Resolution 43/2022/QH15 on fiscal and monetary policies to support socio-economic recovery and development, including the policy of tax exemption and reduction saying that reducing 2% VAT rate in 2022 for goods and services that are applied a VAT tax of 10%, except for the groups of goods and services telecommunications, information technology, financial activities, banking, securities, insurance, real estate, metals, prefabricated metal products, mining products (excluding coal mining), coke, refined petroleum, chemical products, goods and services subject to excise tax.

Resolution 43/2022/QH15 takes effect from January 11, 2022 to December 31, 2023. Tax authorities have provided guidance on making invoices for those eligible for VAT reduction.

Accordingly, for business establishments calculating VAT under the credit method, when making the VAT invoices of goods and services subject to VAT reduction, the VAT rate of 8%, VAT amount and the total amount paid by the buyer will be declared. Based on value-added invoices, the seller will declare output VAT, and the buyer will declare the deducted input VAT amount written on the invoice.

For business establishments (including business households and individuals) calculating VAT under the method of percentage rate on turnover, when making VAT invoices for goods and services subject to VAT reduction, the number of goods and services before being reduced will be stated in the section of the total. The reduced amount of 20% on the revenue will be stated in the section of the total payment and note the reduced amount for calculating the VAT.

Business establishments must make separate invoices for goods and services eligible for the VAT reduction. If the business establishment does not issue a separate invoice for goods and services eligible for the VAT reduction, it is not entitled to a VAT reduction.

If the business establishment has issued an invoice and declared the tax rate and the percentage rate for VAT calculation but has not reduced the tax under the resolution, the seller and buyer must make a written report or agreement on the error.

The seller must issue a revised invoice and provide it to the buyer. Based on the revised invoice, the seller declares and adjusts the output tax, and the buyer declares the adjusted input tax (if any).

Accordingly, the General Department of Taxation adds the tax rate of 8% for taxpayers to select when making invoices on the tax authority’s system. The country’s top tax authority has received the data on the invoice of 8% tax rate for invoices that are not made on the tax authority’s system.

The tax taxpayer will make invoices in accordance with Circular 32/2011/TT-BTC and the instructions of the General Department of Taxation.

The General Department of Taxation has also upgraded the application to add an 8% tax rate and display content for invoices with an 8% tax rate.