– Pursuant to Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance guiding the implementation of the Law on VAT and Decree No. 209/2013/ND-CP dated December 18, 2013 of the Government on detailing and guiding the implementation of a number of articles of the Law on VAT.
+ Clause 1, Article 5 guides the case of failure to declare and pay tax as follows:
“1. Organizations and individuals receive monetary compensation (including compensation for land and properties on land when land is recovered under a decision of a competent State agency), bonuses, support money, transfer of emission rights and other financial revenues.
When a business establishment receives the money received from compensation, bonus, support money, transfer of emission rights and other financial revenues, it shall make receipts according to regulations. For business establishments that spend money, based on the purpose of spending to make money payment vouchers.
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+ Clause 22, Article 7 guides the determination of VAT calculation prices as follows:
“22. Taxable prices for goods and services specified in Clauses 1 to 21 of this Article include surcharges and additional charges in addition to the prices of goods and services to which business establishments are entitled.
In case a business establishment applies the form of trade discount to customers (if any), the VAT calculation price is the discounted selling price for the customer. In case the trade discount is based on the quantity and sales of goods or services, the discount amount of the sold goods shall be adjusted on the goods and service sale invoice of the last purchase or the next period. In case the discount amount is made at the end of the sales discount program (period), an adjusted invoice shall be issued with a list of the invoice numbers to be adjusted, the adjusted amount and tax amount. Based on the adjusted invoice, the seller and the buyer shall declare the adjustment of sales and purchase revenue, output and input tax.”
– Pursuant to Clause 2.5, Appendix 4 issued together with Circular No. 39/2014/TT-BTC dated March 31, 2014 of the Ministry of Finance guiding as follows:
“2.5. For goods and services subject to the form of trade discount for customers, on the VAT invoice shall state the selling price already discounted for the customer, VAT, and the total payment price inclusive of VAT.
If the trade discount is based on the quantity and sales of goods and services, the discount amount of the sold goods shall be adjusted on the goods and service sale invoice of the last purchase or the next period. In case the discount amount is made at the end of the sales discount program (period), an adjusted invoice shall be issued with a list of the invoice numbers to be adjusted, the adjusted amount and tax amount. Based on the adjusted invoice, the seller and the buyer shall declare and adjust the purchase and sale sales, output and input taxes.”
– In accounting standard No. 14 – Revenue and other income promulgated under Decision No. 149/2001/QD-BTC dated December 31, 2001 of the Minister of Finance, stipulates:
“Trade discount: is the amount that the business offers to reduce the listed price to customers who buy in large quantities”
Based on the above provisions, companies refer to the following principles:
* In case the company has paid bonuses to customers who achieve sales, when receiving this bonus, customers make receipts of collection according to regulations and are not required to declare and pay VAT as guided in Clause 1, Article 5 of Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance. The company based on the purpose of spending money to make payment vouchers.
* In case the Company has sales activities with trade discounts, selling at lower price compare to listed prices to customers buying goods in large quantities, the Company shall issue invoices. Whereby:
In case the company selling goods applies the form of trade discount to customers based on the sales of the sold goods, the amount of the trade discount shall be adjusted on the sales invoice of the last purchase or on the invoice in the next period.
In case the discount amount is made at the end of the sales discount program (period), the Company may issue an adjusted invoice with a list of the invoice numbers to be adjusted, the adjusted amount and tax amount. Based on the adjusted invoice, the seller and the buyer shall declare and adjust the purchase and sale sales, output and input taxes.
Companies will need to base themselves on the actual situation to determine whether the unit’s expenses are bonuses or trade discounts and compare them with the provisions of the above-mentioned legal documents to comply with the regulations.