In case of arising Valued Added Tax on imported goods/services, is it such VAT liability deductible and is there any requirement implicated?
Let us share with you the related regulation for further information and reference.
In accordance with Clause 10, Article 1, Circular 26/2015/TT-BTC, the tax payer can claim for VAT deduction if can meet the below requirements:
1. Having legitimate VAT invoices for purchases or receipts for payment of VAT on imported goods, or receipts for payment of VAT on behalf of foreign organizations that do not have Vietnamese legal status and the organizations and individuals, and the foreigners that do business or earn income in Vietnam.
2. Proofs non-cash payments for the purchases (including imported goods) that cost VND 20 million or more, except for the imports that cost below VND 20 million each, purchases that cost below VND 20 million inclusive of VAT, and imports being gifts, donations from overseas entities.
3. Bank transfer receipts are documentary evidence proving the transfer of money from the buyer's account to the seller's account.
a) Proofs of the buyer's payment to the seller's account or proofs of payments in the manners that are not conformable with applicable regulations of law are not eligible for deduction and refund of VAN on purposes that cost VND 20 million or more.
b) Any purchase that cost VND 20 million or more (VAT-inclusive) shall not be deducted if there is no bank transfer receipt
c) With regard to goods purchased under a deferred payment plan or instalment plan that cost VND 20 million or more, the taxpayer shall declare and deduct input VAT according to the sale contracts, VAT invoices, and bank transfer receipt, If the bank transfer receipt is not available before the payment deadline according to the contract, the taxpayer may still deduct input VAT.
In light of the above, the VAT on imported goods/services which are used for business activities of the tax payer can be claimed for VAT deduction and the tax payer needs to maintain below documentation:
1. Payment evidence for VAT on imported goods/services or VAT liability payment;
A copy of the submitted customs declaration or declaration of foreign contractor withholding tax should be attached along with the claim package as supporting documents;
2. Proofs non-cash payments for the purchases
It means that the VAT on imported goods is only deductible and claimable when the payment for the foreign contractor is fully made.
Above is the general regulation for cases of Conditions for deducting input VAT on imported goods and services.
To get into details for specific cases, please feel free to contact us as at:
Unit 602A, Tower A, Handi Resco Office Building
521 Kim Ma Street, Ba Dinh District, Hanoi
+ 84 24 3974 4181/ 4182
+ 84 24 3974 3090