VAT law revision to simplify tax calculation, expand relief - Economy

Updated

March, 10 2013 00:00:00

VAT law revision to simplify tax calculation, expand relief

HA NOI (VNS)— The revised law on value added tax (VAT) will simplify tax calculation methods and expand the list of those who can enjoy a tax exemption.

The beneficiaries include many firms related to health and agriculture insurance as well as other areas, according to the Ministry of Finance.

Experts said the country's current VAT regulations, issued in 1997 and revised repeatedly in 2003, 2005 and 2008, still lacked a clear VAT registration threshold, making tax calculation complicated for both enterprises and tax authorities.

The draft amendments establish a turnover-based threshold for VAT registration that the ministry says will simplify administrative procedures, reduce costs and prevent tax fraud.

The threshold will likely be about VND1 billion (US$47,620).

All businesses with turnover above this threshold must pay VAT under the credit method, while those with less turnover will pay taxes under direct calculation of value added.

The draft amended law will be proposed to the National Assembly for approval in May. — VNS

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