Pursuant to Decree No. 123/2020/ND-CP dated October 19th, 2020 of the government regulating invoices and documents:
Article 4 stipulates the following set of principles for generating, managing and using invoices and documents:
“1. When selling goods or providing services, the seller must issue an invoice to deliver to the buyer (including cases of goods and services used for promotion, advertising, sampling; goods and services provided, gifted, traded, paid to workers in place of wages, and for internal use (excluding goods circulated internally to continue the production process); export goods in the form of loans, borrowed or refunded goods) and must fully record the contents as prescribed in Article 10 of this Decree. In case of using digital invoices, it must follow the tax authorities’ standard data format as prescribed in Article 12 of this Decree…”.
Pursuant to Circular No. 219/2013/TT-BTC dated December 31st, 2013 of the Ministry of Finance detailing the implementation of the VAT Law and Decree No. 209/2013/ND-CP dated December 18th, 2013 of the government detailing the implementation of a number of provisions present in the VAT Law.
Point d, Clause 7, Article 5 stipulates cases where VAT declarations and payment are not required:
“d) Revenues are not related to the sale of goods and services of the business establishment”.
Article 9 specifies the tax rate level of 0%.
Article 10 specifies the tax rate level of 5%.
Article 11 specifies the tax rate level of 10%.
Based on the above regulations, in case company A signs a contract on behalf of company B to pay the service fees, which is considered collections and deposits in accordance with the law, and in case the supplier generates an invoice, records the name and tax code of company B, then when collecting the money paid on behalf of company B, company A does not have to issue a VAT invoice, does not have to declare and pay taxes on the amounts collected and paid on company B’s behalf, but only prepare the revenue and expenditure documents according to the provisions in Point d, Clause 7, Article 5 of Circular No. 219/2013/TT-BTC dated December 31st, 2013 of the Ministry of Finance;
In case the supplier has issued an invoice stating the name and tax code of company A, then when collecting money from company B, company A must issue a VAT invoice to company B, and calculate VAT according to regulations.
Regarding the VAT rate, the company bases on the actual service contract arising to determine the VAT rate according to the instructions in Article 9, Article 10, Article 11 of Circular No. 219/2013/TT-BTC dated December 31st, 2015.