Value added tax (VAT) is one of the key taxes when a business purchases in the country or imported, the calculation of VAT is deductible and VAT on imports can directly affect the cash flow and tax obligations. Below is the detailed content about how to calculate VAT deductible, how to calculate the VAT on imported goods, the relationship between the two types of this tax from AccNet.
1. How to calculate VAT deductible
VAT deductible is the input VAT that enterprises have to pay when buying goods and services for manufacturing operations, business subject to VAT. This account is deducted from the VAT payable in the period.
Formula for calculating VAT deductible
General formula:
VAT is deducted = Total input VAT valid
Recipe details per each source input tax
- VAT is deducted from purchases in water: VAT is deducted = Total VAT on purchase invoices valid
- VAT is deducted from imports: Import VAT = (Price calculator import tax + import Tax) × VAT
- VAT is deducted from the fixed asset: VAT is deducted = Total VAT amount on the invoice purchase fixed assets, valid
- VAT is deducted from bought-in service: VAT is deducted = Total VAT amount on the invoice valid service
General formula
Total VAT deductible = VAT from purchases in water + VAT from import + VAT from fixed assets + VAT from purchases
Examples illustrate how to calculate VAT deductible
The business has transactions in the month as follows:
- Purchase of raw materials: sales Price without tax $ 100 million, VAT 10 million.
- Goods imports: CIF Price 200 million, tax imported 20 million, VAT, 10%, import VAT = (200 + 20) × 10% = 22 million.
- Buy fixed assets: Price is not tax 300 million, VAT 30 million.
- Hire the services ads: Price is not tax 50 million, VAT 5 million.
Total VAT deductible = 10 + 22 + 30 + 5 = 67 million
The relationship between VAT is deductible and VAT payable
Formula for calculating the VAT payable:
VAT payable = output VAT - VAT is deductible
For example:
Case 1: To pay tax
- VAT output: 100 million
- VAT deductible: 67 million
- VAT payable = 100 - 67 = 33 million
Case 2: 't have to pay tax (balance deduction)
- VAT output: 50 million
- VAT deductible: 67 million
- Amateur 17 million → The move to the post or profile tax refund.
Conditions to calculate the input VAT deductible
Business only tax VAT is deducted when it meets the following conditions:
- VAT invoices valid: invoices have complete information, no flaws.
- Goods and services used for activities subject to VAT: If used for activities not taxable (for example, health services, education), are not deductible.
- Payment through bank transfer (if over 20 million): If the business cash payments are not deductible.
- A customs declaration (for imports): To prove the goods have been imported legally.
Frequently asked questions when applying VAT deductible
VAT is deducted get refund back?
Yes, if the business is subject to VAT refund, such as:
- Export goods and services with a tax rate of 0%.
- Investment projects eligible for tax refund.
New business establishment may be tax deductible VAT not?
Yes, if the business tax declaration according to the method of deduction, to meet eligibility.
If business with tax VAT is deducted't?
Yes, VAT is not related to profit. Despite losses, businesses can still deduct input VAT.
2. How to calculate VAT on imported goods
VAT on imported goods is the type of tax applied when a business importing goods into Vietnam, in order to ensure fairness between imports goods produced in the country.
Formula for calculating the VAT on imported goods
Import VAT = (value tax imports + import Tax) * VAT
In which:
- Value calculate the import duty = CIF Price (Price at the port of entry)
- Import tax = value tax, import Tax rate * imported
- VAT: As specified for each item (usually 5% or 10%)
For example, the VAT on imported goods
Company B importing a shipment with the following information:
- CIF price: 2 billion
- Tariff: 5%
- VAT: 10%
Step 1: import tax: Import tax = 2 b * 5% = 100 million
Step 2: Calculate the VAT on imported goods: Import VAT = (2 billion + $ 100 million) * 10% = 2.1 billion * 10% = 210 million
Conclusion: company B have to pay 210 million import VAT.
Deduction of VAT on imported goods
After payment of VAT on import, the business can deduct this tax when the declaration of input VAT, if:
- Imported goods used for production operations, business subject to VAT.
- There is evidence from the payment of import VAT valid.
- Goods have in fact entered the warehouse, can stock from imported valid.
3. Comparison VAT on imports and VAT deductible
General points
- Is VAT applicable to the general principles of input VAT can be deducted when satisfying conditions.
- Businesses can calculate the VAT to be deducted (including VAT on imported goods) when calculating the VAT payable.
- The main purpose: Avoid double taxation, help businesses only have to pay tax on the value really.
Difference
| Criteria | VAT on imported goods | VAT deductible |
| Applicable objects | Goods imported from abroad | Goods and services purchased in the country catering business |
| The time arises | When customs clearance of goods | When the transaction of purchase and sale in country |
| Conditions deduction | Need proof from payment of import VAT | Need VAT invoices valid payment regulations |
| Affect the VAT payable | Is a part of input VAT deductible | Is part deducted from the output VAT to determine the tax payable |
How to calculate VAT on imported goods is part of the input VAT. If eligible, the business can deduct this tax when applied how to calculate VAT deductible. Business imported goods may still be a tax refund or offset tax if the total input tax (including tax on imported) greater than output VAT. Understanding the relationship between the two types of tax help entrepreneurs optimize cash flow, avoid arrears or penalty from the tax authority.
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