Registration of value added tax credit method is required if the annual revenue has not reached 1 billion VND

Registration of value added tax credit method is required if the annual revenue has not reached 1 billion VND

 The revised Law on VAT 31/2013/QH13 take effective from 01 Jan 2014 prescribed that the businesses have annual revenue of less than 1 billion VND, tax calculation by the method directly is required, unless the voluntary registration of VAT credit method. The registration of tax credit method in this case must be made before 20 December for the following year (Paragraph 7 of Article 11 of Circular 156/2013/TT-BTC).

 However, it has not ended in 2013 so that the Ministry of Finance permits businesses base on total revenue of the VAT calculation period from Dec 2012 to the end of November 2013 to determine whether or not eligible for tax credit method. In case of new businesses founded in 2013, VAT taxable revenue base on average of the month”s activities (x) 12 months.

 If revenue is over 1 billion VND in 2013  then in 2014 it shall be granted tax credit method. Conversely, if businesses want to declare tax credit method, they must submit notification to the tax office under 06/GTGT Form (in connection with Circular 156/2013/TT-BTC ) prior to 30 Dec this year to be credited tax for 2014. In cases there is no registration or late registration shall  be required to declare by the direct tax method for 2014.

 When be subject to direct tax method, business shall switch to use sale invoices from 01 Jan 2014, absolutely not use VAT invoices (Point 3 Dispatch No.17557/BTC-TCT).

 The businesses receiving the input VAT invoice should "examine" the supplier’s revenue by notice under form of 06/GTGT for ensuring that this unit has filed with the tax authorities to determine it has fully conditions to issue VAT invoice to prevent the use of illegal invoice in the tax declaration, VAT refund

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