Question:
Our bank has a service contract with company A to perform debt collection services on behalf of the bank. When company A issues invoices and charges fees for debt collection, can our bank deduct input VAT for these invoices?
Answer:
Based on Article 7 of Article 14 of Circular No. 219/2013/TT-BTC dated December 31, 2013, of the Ministry of Finance, guiding VAT, which provides principles for deducting input VAT.
Based on Article 3 of Circular No. 26/2015/TT-BTC dated February 27, 2015, guiding VAT and tax management, in accordance with Decree No. 12/2015/NĐ-CP dated February 12, 2015, of the Government detailing the implementation of certain articles of tax laws, amending and supplementing certain articles of tax decrees, amending and supplementing certain articles of Circular No. 39/2014/TT-BTC dated March 31, 2014, of the Ministry of Finance on invoices for the sale of goods, provision of services, which regulates that credit granting services belong to subjects not subject to VAT.
=> Credit granting services belong to subjects not subject to VAT; therefore, input VAT on invoices for credit granting services provided by company A to our bank cannot be deducted as per the regulations. Question: Our company has a branch with dependent accounting in the same province, with a 13-digit tax code. The branch only engages in the production and storage of goods and does not directly sell products. All reports are prepared by the company’s headquarters. Due to the small scale of the company, all purchase and sale transactions are conducted at the headquarters. Currently, all input invoices for the branch’s purchases of goods and services are issued in the name of the headquarters, bearing the headquarters’ tax code and address. Can these invoices be deducted as input VAT and included as expenses when determining the company’s Corporate Income Tax (CIT)?
Answer:
Based on Article 1, Article 11, and Article 12 of Circular No. 156/2013/TT-BTC dated November 6, 2013, of the Ministry of Finance, providing guidance on the implementation of certain provisions of the Tax Administration Law, regarding the principle that a business with dependent units under the same province or city as its headquarters is responsible for declaring and paying VAT and CIT centrally at the headquarters.
In the case where the company has a branch with dependent accounting in the same province or city as its headquarters, the company is responsible for declaring and paying VAT and CIT centrally at the headquarters, including any transactions generated by the branch. Therefore, if the input invoices for the branch’s purchases of goods and services meet the conditions specified in Article 15 of Circular No. 219/2014/TT-BTC of the Ministry of Finance (as amended and supplemented in Article 10 of Circular No. 26/2015/TT-BTC dated February 27, 2015) and Article 4 of Circular No. 96/2015/TT-BTC dated June 22, 2015, of the Ministry of Finance (as amended and supplemented in Article 4 of Circular No. 96/2015/TT-BTC dated June 22, 2015), the company is entitled to deduct the input VAT and include it as an expense when determining CIT, as per the regulations.
