In this newsletter, TND would like to update our valued customers on the relevant legal policies and guidelines in VAT reduction recently issued.

Official Letter No. 58653/CTHN-TTHT providing guidance on VAT reduction according to Decree 44/2023/ND-CP

In case the Company has a work item accepted in June 2023 but invoices are issued in July 2023, it is an act of invoicing at the wrong time, and the 8% value-added tax rate according to the prescribed in Clause 1, Article 2 of Decree No. 44/2023/ND-CP dated 30 June 2023.

Effective date:11 August 2023

Official Letter No. 62665/CTHN-TTHT confirming the fulfillment of tax obligations

In case the invoice states the wrong Aalue-added tax rate but the business establishment has not adjusted it itself and the tax authority checks and discovers it, it is determined that the seller has declared and paid tax at the correct tax rate written on the invoice, the buyer can deduct input VAT according to the tax rate stated on the invoice but must have confirmation from the tax agency directly managing the seller as prescribed in Point b, Clause 5, Article 12 of Circular No. 219/2013/TT-BTC dated 31 December 2013 of the Ministry of Finance.

If the VAT rate stated on the purchase invoice is higher than the tax rate specified in the legal documents on VAT, input VAT for deduction shall be made according to the tax rate specified in the legal documents on VAT.

If the VAT rate stated on the invoice is lower than the tax rate specified in legal documents on VAT, input VAT for deduction shall be made according to the tax rate stated on the invoice.

Requesting confirmation of tax liability belongs to the seller’s right according to the provisions of Article 16 of the Law on Tax Administration No. 38/2019/QH14. Dossier requesting confirmation of tax obligation fulfillment is made according to the instructions in Article 70 of Circular 80/2021/TT-BTC dated 29 September 2021.

Effective date: 25 August 2023

Increases to Social Insurance benefits from 1 July 2023

The Government issued Decree 42/2023/ND-CP on adjustments to pensions, Social Insurance (SI) allowances and monthly allowances:

An increase of 12.5% – 20.8% for pensions, SI allowances and monthly allowances for periods from 1 July 2023

For individuals receiving pensions, SI benefits or monthly allowances, after adjusting according to item (1), where their benefits are still lower than 3 million VND per month, they are entitled to a further increase of 300,000 VND per month if benefits are lower than 2.7 million VND per month and an increase to reach 3 million VND per month if their benefits are from 2.7 to 3 million VND per month.

Effective date: 14 August 2023

Official Letter No. 63648/CTHN-TTHT on handling invoices with errors

In case the Company provides goods and services that are eligible for VAT reduction according to Decree 15/2022/ND-CP, after 31 December 2022, errors are discovered and must be issued an adjusted or replaced invoice. without affecting the goods price and VAT payable or adjusting the taxable price, the adjusted or replaced invoice will apply the 8% VAT rate. In case an error in the quantity of goods leads to an error in the amount of goods and VAT, the adjusted or replaced invoice will apply the VAT rate as prescribed at the time of making the adjusted or replaced invoice according to the instructions. in Official Dispatch No. 2121/TCT-CS dated 29 May 2023 of the General Department of Taxation.

Effective date: 30 August 2023