Review and amend regulations on non-taxable entities

Review and revise to suit reality

Participating in the discussion, Head of the National Assembly Delegation of An Giang Province, Tran Thi Thanh Huong, stated that after a long period of implementation, the Law on Value Added Tax has revealed certain shortcomings and limitations, and many contents are no longer suitable for reality. Therefore, amending the Law is necessary to perfect the policy, in line with the goals set out in the Socio-Economic Development Strategy, the Tax System Reform Strategy to 2030 and the Project to Orient the Law and Ordinance Building Program for the 15th National Assembly.

Head of the National Assembly Delegation of An Giang Province, Tran Thi Thanh Huong, proposed to review and amend the non-taxable subjects to suit the reality.

The Law on Value Added Tax (amended) directly affects the rights and interests of organizations, individuals, people and businesses. Regarding non-taxable subjects, Article 5 of the draft Law has amended and supplemented a number of related provisions, ensuring consistency in terms and concepts stipulated in specialized laws (Law on Cultivation, Law on Animal Husbandry, Law on Fisheries, Law on Credit Institutions, etc.)

According to the Head of the National Assembly Delegation of An Giang province, it is very necessary to review and amend regulations on non-taxable subjects in the direction of eliminating or adding some types of goods and services compared to current regulations to suit reality.

However, in addition to the cases that do not have to pay output VAT but are entitled to deduct input VAT, there are currently a number of other cases (organizations and individuals transferring investment projects for production and trading of goods, cooperatives...).

Delegates at the 7th Session, 15th National Assembly

Therefore, the delegate requested the drafting agency to explain and clarify the legal basis and assess the impact on determining the cases stipulated in Decree 209/2013/ND-CP (which are no longer allowed to deduct input and output value added tax) not subject to value added tax as determined in the draft Law.

Ensuring consistency between laws

Giving specific comments on taxpayers (Article 4), delegate Tran Van Tien (Vinh Phuc Provincial Delegation) said that, in Clause 1, Article 2 of the Law on Tax Administration, taxpayers include: organizations, households, business households, and individuals who pay taxes according to the provisions of the law on tax. To ensure consistency between the Law on Value Added Tax and the Law on Tax Administration, the delegate proposed to replace the word "Household" with the phrase "household, business household".

Regarding non-taxable subjects (Article 5), delegates requested clarification on whether individuals, households, and business households, when purchasing products from crops, forests, and livestock, as prescribed, are not subject to tax. At the same time, clarify the legal basis for why these subjects, when purchasing products as prescribed in Clause 1, do not have to calculate and pay value added tax but are entitled to deduct input value added tax.

Delegate Tran Van Tien (Vinh Phuc Provincial Delegation) discussed

Regarding tax rates (Article 9), at Point d, Clause 2 on the tax rate of 5%, it is stipulated that: products of crops, planted forests, livestock, aquaculture, and fishing that have not been processed into other products or have only undergone normal preliminary processing, except for products specified in Clause 1, Article 5 of this Law.

However, Clause 1, Article 5 stipulates that the following subjects are not subject to tax: products of crops, planted forests, livestock, aquaculture, and fishing that have not been processed into other products or have only undergone normal preliminary processing by organizations and individuals that produce, catch, sell, and import themselves. Therefore, the delegate proposed to review the provisions of Clause 2, Article 9, which are inconsistent with the provisions of Clause 1, Article 5 on tax rates.

Regarding input value added tax deduction (Article 14), at Point c, Clause 2 stipulates: for exported goods and services, in addition to the conditions specified in Point a and Point b of this Clause, there must also be: a contract signed with a foreign party on the sale, processing of goods, provision of services; invoices for the sale of goods and services; non-cash payment documents; customs declaration for exported goods; packing list, bill of lading, goods insurance documents (if any); except for some special cases as prescribed by the Government.

Delegate Tran Van Tien said that such a regulation would cause difficulties for taxpayers. The delegate proposed to remove the content on cargo insurance documents.

Minister of Finance Ho Duc Phoc explains some issues to National Assembly deputies

Considered and approved at the 8th Session

Explaining some issues raised by National Assembly deputies, Minister of Finance Ho Duc Phoc said that VAT has a very wide scope of regulation and is levied on most types of goods and services, so it will affect the interests of many manufacturers and businesses.

Therefore, the provisions in the draft need to ensure production and trade development, thereby regulating uniformly in accordance with the Tax Strategy according to the Party's resolution. Therefore, the drafting committee should study very closely and assess the impact of each issue related to VAT policy, covering all revenue sources, in accordance with international practices...

Vice Chairman of the National Assembly Nguyen Duc Hai delivered a concluding speech at the meeting.

Concluding the session, Vice Chairman of the National Assembly Nguyen Duc Hai said that National Assembly deputies agreed on the necessity of amending the Law on Value Added Tax to overcome the shortcomings and limitations of the current Law, institutionalizing the Party's policy on amending and supplementing laws on taxes and fees according to market principles, in line with international practices, associated with restructuring revenue sources, expanding the tax base, improving the efficiency of tax management and applying reasonable tax rates.

According to the Vice Chairman of the National Assembly, the delegates have contributed many valid opinions on many specific provisions. Accordingly, it is necessary to carefully study to complete the draft Law, review the name so that the draft Law closely follows the goals set out in the Party's Resolutions, the Tax System Reform Strategy, the roadmap towards applying a single tax rate, the practical and specific feasibility of the provisions stipulated in the draft Law, the contents assigned to the Government and ministries for regulation, the suitability and compatibility of the draft Law with related laws.

The Vice Chairman of the National Assembly also said that the National Assembly Standing Committee will direct the verification agency to closely coordinate with the drafting agency and relevant agencies, study the opinions expressed in the hall and the opinions expressed in groups to absorb and complete the Draft Law to submit to the National Assembly for consideration and approval at the 8th Session.

Source: https://kinhtedothi.vn/dai-bieu-quoc-hoi-ra-soat-sua-doi-quy-dinh-ve-doi-tuong-khong-chiu-thue.html