Current VAT and tax regulations do not allow input VAT to be offset against VAT payable at the import stage.
1. Our company issued some VAT invoices having the digital signing date different from the invoice preparation date. Are these invoices legitimate under current regulations and which date should be used for VAT declaration purpose?
According to recent guidance of the General Department of Taxation, an e-invoice will be considered as a legitimate invoice if it is digitally signed on or after the date that the invoice is prepared. The VAT declaration with regard to such invoice shall be as follows:
- The seller will declare output VAT based on the date of invoice preparation;
- The buyer will declare input VAT at the time of receiving the legitimate invoice with all required criteria in accordance with regulations.
2. Our company often imports materials from foreign suppliers, thereby incurring a significant amount of import VAT. Meanwhile, we are having a significant input VAT creditable from domestic purchase. Could we offset such creditable input VAT against the VAT payable at the import stage?
According to recent guidance of the General Department of Taxation, the current VAT and tax administration regulations do not provide guidance allowing the input VAT amount that has not yet been fully credited to be offset against the VAT payable at the import stage.
3. Our company incurred the IT services fee charged by overseas company. The IT services including two parts (i) SAP user and (ii) SAP consultancy services. Please advise the FCT rate applicable for this case.
The applicable FCT rate for IT services should be as follow:
- For SAP user fee, we understand it is related to the right to use SAP, so the FCT rate should be 10% CIT and 0% VAT pursuant to current regulations.
- For SAP consultancy service which is separated from the right to use the software, the CIT rate should be 5%. In case that the actual service is fallen to the definition of software service in Point 3, Article 9, Decree 71/2007/ND-CP, it is not subject to VAT.
Please note that the scope of this service must be clearly defined as similar to the definition of software service in regulations and the company maintains supporting documents proving the service is relevant to the defined scope. Otherwise, 5% VAT will be applied.