According to the trend of international integration, expanding the global supply chain, operations, imported goods become increasingly popular with Vietnamese enterprises. However, in parallel with the import operation is mass financial obligations incurred – in which the value added tax (VAT) on imports is a tax important that a business must declare and pay true enough.
Understanding the accuracy VAT on imports not only help businesses comply with the law, but also better control costs, avoid risks, arrears, late payment penalties. Unfortunately today, many businesses still confuse value tax calculator, formula calculator, time is deducted, lead to serious errors.
The article below will play the role as a handbook, comprehensive help understand the business:
- VAT on imported goods is what?
- How to calculate VAT on imported goods detailed, practical examples.
- Legal grounds and procedures for the declaration, the common errors, processing solutions.
1. Why business need to master how to calculate VAT on imported goods?
VAT does not only arise in the operations of buying and selling domestic, but also apply directly at import stage. When goods are imported into Vietnam business not only subject to import tax (if any), but also have to pay VAT for the value of goods which, though not sold in the market.
Some of the reasons businesses need to understand how to calculate VAT on imported goods:
Affect input costs, cost calculation
VAT is account must advance at the time of customs clearance. If the business does not know the correct value of tax payable, easily lead to:
- Expected cash flow wrong.
- Accounting for expenses, not exactly.
- Cause delays in stitches delivery or production due to lack of budget, tax.
How to calculate VAT on imports impact on the ability to deduct tax refund
Business only entitled to deduct the VAT on imported goods if:
- Have full documentation from the customs.
- Had to pay tax right time, right content.
- Goods for business activities subject to VAT output.
't understand how to calculate → declare wrong → no deductible → increase the actual cost.
To avoid mistakes, legal risks
- Wrong HS code, wrong tax price, wrong VAT, can cause business is arrears, administrative penalties, even suspended through.
- This risk is growing due to the tax, customs are clasped the management import taxes through the electronic system.
Read more:
2. VAT on imported goods is what?
Definition according to the law
According to the Law on value-added Tax no. 13/2008/QH12 (which was amended and supplemented), VAT on the imported goods are indirect taxes levied on the added value of the goods when put into the domestic market in Vietnam.
Business directly pay this tax at the stage of customs clearance, besides other taxes, such as import tax, special consumption tax (if any).
Characteristics of VAT on imported goods
- Is earnings mandatory, irrespective of the business goods or non-commercial.
- Only be deducted if the goods used for production activities business has incurred the VAT output.
- Does not lie in the value of goods, i.e. business can declare to deductions if eligible.
Subject to VAT when importing
Under current rules, most imported goods are subject to VAT except:
- Aid non-refundable.
- Imports from the non-tariff areas and industrial zones, if eligible.
- A number of equipment, machinery and specialized according to the category tax free.
The importer is obliged to pay VAT for shipment at the time of customs clearance. After submission, the business will be issued a certificate from the tax collector to serve deducted in the accounting period.
3. How to calculate VAT on imports: recipe & detailed analysis
The calculation of VAT on imported goods requires absolute accuracy, as directly related to the stage of customs clearance, cost of inputs, as well as the right to deduct the tax of the business after this. Pursuant to Article 7 of circular 219/2013/TT-BTC, the calculation formula is as follows:
Formula for calculating the VAT on imported goods
VAT on imports = (Price calculator import tax + import Tax + excise Tax (if have)) x VAT
Explain each component in the formula how to calculate VAT on imported goods
The prices charged import tax
- Is price CIF: include Commodity price + shipping Cost + insurance to the Vietnamese border.
- Business need declare properly value the contract, accompanied by invoice, bill of lading, insurance to customs authorities confirmed.
Import tax
- Apply according to the current tariffs (MFN, special deals, or FTA).
- Can vary HS code, trade agreements that Vietnam has signed.
Excise tax (if any)
- Apply with items such as wine, beer, tobacco, cars from the 24-seat back down, fresh water with gas...
- SCT must be added to the calculated value VAT ago when multiplied by the tax rate VAT.
VAT
- Popularity is 10%, a number of goods subject to 5% (medical equipment, agriculture,...), or 0% with the aid of humanitarian aid.
Illustrative examples in detail how to calculate the VAT on imported goods
Real life situation:
Business A 1 imports shipment electronics from south Korea, information is as follows:
- CIF price: 500.000.000 VNĐ
- Import tax: 10%
- Not subject to tax excise
- VAT: 10%
Step 1: Calculate the import tax
- Tax NK = 500.000.000 x 10% = 50.000.000 VNĐ
Step 2: Calculate the VAT on imported goods
- VAT = (500.000.000 + 50.000.000) x 10% = 55.000.000 USD
Total corporate tax payable at import stage:
- Tax NK: 50 million
- VAT: 55 million
- → Total: 105 million
Amount of 55 million this VAT will be accounted for in account 1332, be deducted in the tax declaration next, if you meet the eligible deduction.
4. Legal grounds, the current policy when calculating the VAT on imported goods
Business should be based on writing system of tax laws, customs to ensure the calculation of VAT on imported goods, to declare VAT on imported goods regulations.
The text main legal
- The VAT law no. 13/2008/QH12, modify, supplement, 2013, 2016.
- Circular 219/2013/TT-BTC: guiding the implementation of the VAT law, in particular Article 7 about how to determine the tax price.
- The Customs law no. 54/2014/QH13, the text guide.
- Decree 134/2016/ND-CP, Decree 18/2021/ND-CP: detailed Rules on exemptions, tax refund, import VAT on imported goods.
- Dispatch 5757/TCHQ-TXNK (2023): guide redefine HS code, recalculation of the VAT on the difference in customs declaration.
The policy updates affecting the VAT on imported goods
- Policies to reduce VAT temporary 2023-2024 (from 10% to 8%) applied with a number of items imported under the Decree 44/2023/ND-CP.
- The impact from trade agreements such as the EVFTA, CPTPP, RCEP... reduce import tax → affect the price charged VAT (for decrease the import tax).
Remember: If businesses apply FTA reduce the import tax, the VAT charged according to the formula how to calculate VAT on imports can still lose – because the import tax is reduced by not going to the calculated value VAT again.
The master formula for calculating the VAT on imported goods, the legal grounds comes that will help business to declare accuracy, avoid errors, ensure the right to deduct valid.
5. Procedures for payment of VAT on imports & point deducted
Understanding the calculation of VAT on imported goods is not enough, businesses still have to make the correct procedure for filing a tax, declare the right time to ensure your benefits deductions, avoid being sanctioned.
Process declare and pay VAT at the stage of customs
From year 2020 to date, the procedure for payment of VAT on imported goods is done through a one-stop Portal national system VNACCS/VCIS of the General administration of Customs.
The basic process:
- Business declaration the customs declaration in electronic → declare the full information value CIF, tax, HS codes.
- Automatic calculation of tax payable (import duties + VAT).
- E-tax payment through the payment gateway bank connected to the customs system.
- Get document confirming the payment of tax → serve to deduct input VAT.
Note: Business is not cleared if not yet paid the full tax, VAT, import tax according to the regulations.
The time of declaration, conditions deduct the VAT on imported goods
After paying tax at customs, the business is entitled to deduct input tax if it meets the following conditions:
| Conditions | Detailed description |
| 1. There is evidence from the payment of import VAT | Customs declaration + payment to state budget (form C1-02/NS) |
| 2. Goods for activities subject to VAT | Do not use for tax free goods ODA projects not taxable |
| 3. Declaration of right states arising | Late term may not be deducted or have to explain to the back |
6. The flaws common & important note when applying the calculation of VAT on imported goods
Although the process of how to calculate VAT, import taxes, VAT, imports were electronic goods, but many businesses still make mistakes due to lack of check or confusion in stitch declare.
The common error in business frequently
- Wrong HS code → apply false, VAT, or tax NK → device arrears.
- No SCT on price, VAT (for goods subject to SCT) → failing to declare tax.
- Wrong price CIF or FOB → - adjusted increase in the tax price.
- Do not submit enough evidence from when deducted → excluded from the right to deduct.
Implications - solution room escape
Implications:
- Tax arrears, fines, slow customs.
- Lose the right to deduct tax, to increase the actual cost.
- Influence to the prestigious, ranking comply with the customs of the business.
The solution prevention:
- The inextricable link between the accounting department, import and export.
- Use accounting software integrated tax declaration customs data.
- Periodically reconcile the data between customs declaration – accounting – reporting VAT.
- Staff training policy update latest tax from the General directorate of Taxes and Customs.
7. Management solution VAT on imports effective for business
For maximum efficiency, management, VAT on imports, especially when importing business often, the application software, accounting software, specialized system integration is the inevitable trend.
Software solutions integrated accounting software – bill – customs system modern AccNet Cloud help:
- Automatically update tax information from customs declarations.
- Accurate calculation of input VAT from the data through.
- Track, archive, certificate from the tax service, settlement or unscheduled inspections.
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- Cut 30-40% time financial reports every quarter
- 80% reduction input errors thanks to automatic data link between the distribution system
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- Auto-matching data accounting – inventory – sales – bank
- Easily track revenue, public debt, cash flow anytime, anywhere
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Specific benefits when the application software accounting AccNet Cloud
| Benefits | Description |
| Automatic calculation of VAT on imported goods | Avoid errors, reduce the time to manipulate |
| Sync vouchers | From a customs declaration to the accounting system |
| Optimize cash flow | Plan filing the correct tax, avoid capital |
| Support deduct | Automatically determine the time properly deducted states |
How to calculate VAT on imported goods not only is required legally, but also is a vital element to business:
- Good cost control input.
- Ensure the rights tax deduction legitimate.
- Increased reliability when the inspection tax.
Technology financial – accounting number is growing, businesses should actively implement the accounting system integration, data connection, customs, automation stitching – tax declaration to minimize risk, save resources.
You are in need of software support calculation of VAT on imported goods, to manage the entire data business tax? Experience AccNet Cloud – tax accounting solutions integrated, safe, effective for modern businesses.
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