On 23 March 2022, Ministry of Finance issued Official Letter No. 2688/BTC-TCT (“Official Letter 2688”) providing detailed instructions on Value Added Tax (“VAT”) for Decree No. 15/2022/ND-CP (“Decree 15”).
Accordingly, Official Letter 2688 has some notable points as follows:
- Emphasize that the local Tax Departments shall guide taxpayers to compare with the list of goods and services not eligible for VAT rate reduction in Clause 1, Article 1, Decree 15 and attached Appendices I, II, and III to follow current regulations;
- Regarding the moment for invoice issuance:
- In case a business establishment signs a service contract and collects service fee in advance or during service provision, and the invoice has been issued at the time of service fee collection before 01 February 2022 with the VAT rate of 10%, but the service is completed in the period from 01 February 2022 to the end of 31 December 2022, the invoice issued before 01 February 2022 is not eligible for VAT reduction policy; for the remaining payable which is settled in the period from 01 February 2022 to 31 December 2022, the VAT reduction will be applicable;
- In case a business establishment provides goods and services which are subject to the VAT rate of 10% in January 2022, however, the invoice is lately issued in February 2022, then such invoice is not entitled to the VAT reduction;
- For invoices issued before 01 February 2022 with the VAT rate of 10% however are amended after 01 February 2022 due to errors on invoice or return of goods then such invoices must be issued with the VAT rate of 10%;
- For some special goods and services such as electricity, the VAT reduction is applied for the invoices issued during the period from 01 February 2022 to of 31 December 2022.
We do trust the above points are notable and sufficient, but should you have any questions or need a deeper discussion on this issue, please do not hesitate to contact us.
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