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| Fresh food that is livestock and aquatic products having undergone normal preliminary processing and not yet to be processed into other products would be brought into the list of non-taxable objects.__Photo: VNA |
Fertilizers, machinery and special-use equipment for agricultural production, and offshore fishing vessels would be subject to value-added tax (VAT) at the rate of 5 percent, instead of the current zero percent.
Such is highlighted in the latest draft amended VAT Law designed by the Ministry of Finance (MOF).
Accordingly, the MOF proposes removing certain goods and services from the list of those not liable to tax, including securities depository; stock exchanges’ or securities trading centers’ market organization services; public post and telecommunications and universal Internet services under the Government’s programs; and services related to maintenance of zoos, flower gardens, parks, street greeneries and public lighting.
Also under the draft, the tax rate for unprocessed forest products; sugar and by-products of sugar production; equipment and tools exclusively used for teaching, research and scientific experiments would increase to 10 percent from 5 percent. Cultural, exhibition, physical training and sports activities; art performances; film production; and film import, distribution and screening would also be liable to the 10-percent tax rate.
Meanwhile, fresh food, i.e., livestock and aquatic products having undergone normal preliminary processing and not yet to be processed into other products, which are currently subject to the 5-percent tax rate, would be brought into the list of non-taxable objects.
The MOF also proposes raising the turnover threshold for business households and individuals to be liable to VAT to VND 150 million from VND 100 million. In other words, business households and individuals with a turnover of up to VND 150 million from production and business activities in a calendar year would be exempt from VAT.
Such adjustment aims to alleviate the tax burden on small-scale business households and individuals, enabling them to focus on improving production and business activities and increasing turnover, according to the MOF.
Regarding VAT credit, the draft law provides the conditions for input VAT credit as follows: having added-value invoices on goods/service purchase or proofs of VAT payment at the stage of importation or proofs of VAT payment on behalf of foreign parties. Noteworthily, while the current law requires via-bank payment documents for procurements valued at under VND 20 million, the draft now decreases that threshold to VND 5 million.
The Minister of Finance would stipulate in detail proofs of VAT payment on behalf of foreign parties, which would apply to foreign organizations without Vietnamese legal status and foreign individuals engaged in business activities or earning income in Vietnam.- (VLLF)
