Group 4 report

Taxation group working

INS 3010 Tuesday - Morning

 Table of Contents
A. Group question 1:.......................................................................2
Question:.......................................................................................2
Answer:..........................................................................................2
B. Group question 2:.......................................................................4
Question:.......................................................................................4
Answer:..........................................................................................4
C. Group question 3:.......................................................................6
Question:.......................................................................................6
Answer:..........................................................................................6
D. Group question 4........................................................................8
Question:.......................................................................................8
Answer:..........................................................................................8

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 A. Group question 1:
Company Dragon in the tax period sale products

Question:
a. What information need to be clarified when determine output VAT
b. Give detailed example

Answer:
a. When determine output VAT, Dragon Company need to be clarified:
 Their sale products are belonged to taxable goods and services.
 Their sale products have tax base and tax rate are.
 When seling goods and services, Dragon Company must include the output tax
on the before-VAT price ( price exclusive of VAT or total payment exclusive of
VAT) and this is shown on invoice.
 Clarify the total output VAT amount state for Dragon’s sale product in the tax
period with the following formula:

The output VAT = Base price x VAT rate

b. Give detailed example

Example
The data on the sales during July of Dragon Company who sells product A are as
follows:
 Sales of 3,000 units at the before VAT price of VND 55,000/unit.
 Sales of 1,500 units at the total sale price of VND 94,000,000. On added value
invoice, the VAT amount is not written.
 Export 300 units at FOB price of VND 100,000/unit.

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  VAT rate is 10%.
Required: Define the output tax amount.
Soulution
Output VAT:
 Sale of 3,000 units: 3,000 x 55,000 x 10% = VND 16,500,000
 Sale of 1,000 units: 94,000,000 x 10% = VND 9,400,000
 Export 500 units: 300 x 100,000 x 0% = VND 0
 Total output VAT: VND 16,500,000 + VND 9,400,000 + VND 0 = VND 25,900,000

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 B. Group question 2:
Company Dragon in the tax period purchased materials for production.

Question:
a. What information need to be clarified when determine deductible input VAT
b. Give detailed example

Answer:
a. When determine deductible input VAT, Dragon Company need to be clarified:
 Input VAT of materials used for production of goods or services subject to VAT
(not belong to exempt items).
 The current tax rate of that kind of materials.
 The number of materials that Dragon purchased in tax period.
 Clarify the total VAT amount state on the value-added invoice for Dragon’s
purchased materials for production with the following formula:

Turnover of taxable items

Deductible input VAT = Total VAT input × Total Turnover of goods∧services

If Dragon’s purchased material is of the kinds for which special-type invoices written
with VAT – inclusive payment prices are used, we can base themselves on these VAT
inclusive price to calculate the deductible input tax amount.

b. Give detailed example

Example
In the tax periods, Dragon company purchased materials for producing their product
C (which is taxable) and product D (which is an exempt item).

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  Total input written on added value invoices legible VND 50,000,000 in which
for C is VND 20,000,000, for D is VND 10,000,000
 Dragon company can’t separate input tax for each item.
 Turnover of selling product C in the period is VND 900,000,000, product D is
VND 100,000,000.
Required: Define the deductible input tax amount
Solution
The deductible input VAT amount is:
900,000,000
20,000,000+(50,000,000-20,000,000-10,000,000) × (900,000,000+100,000,000) = VND

38,000,000

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 C. Group question 3:
Company Vinataba in the tax period sale tobacco products:

Question:
a. What information need to be clarified when calculate excise duty payable
b. Give detailed example

Answer:
a. Because tobacco is one of 11 items or goods of items subject to excise duty in
Vietnam, so company need to provide the information to clarified when
calculate excise duty payable:
 The goods produced domestically or imported, if the goods imported provide
imported tax
 The price exclusive of VAT of goods
 The amount of goods exported
 The environmental tax (if any)
 The tax rates
 Clarify excise duty payable on Vinataba in the tax period sale tobacco products with
the following formula:

Excise duty payable = Base price of goods/service x Tax rate

when

Price exclusive of VAT −Environmental tax(if any)

The base price of goods =
1+ Excise duty rate of goods

b. Give detailed example

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Example
We have the data of the tax month in N in Vinataba company engaged in tobacco
production as following:
 Exportation of packs of tobacco: 250,000 packs with FOB price of VND 25,000
per pack
 Sale of tobacco in domestic market: 500,000 packs at price exclusive of VAT of
VND 21,000 per pack
Required: Calculate of excise duty payable by Vinataba. Given that the excise duty
rate applicable for beer is 50%
Solution
 Exportation of pack of Vinataba is non-excisable transaction
 Excise duty payable on the sale of Vinataba in the domestic market is:
VND 21,000
500,000 packs x 1+50 %
x 50%= VND 3,500,000,000

 The total excise duty payable by Vinataba is VND 3,500,000,000

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 D. Group question 4
Question:
a. Group giving example about import duties calculation methods
b. Solving example of group 4

Answer:
a. Group giving example about import duties calculation methods
Example
December 2019, ABC Company has the information during the month below:
 Import 2 unit of product A with FOB price is 29,300 USD/unit.
 Import 10 units of product B with CFR price is 12,210 USD/unit.
 Import 5 units of product C with CIF price is 19,300 USD/unit.
 Export 3 units of product C with CIF price is 10,020 USD/unit.
 Export 4 units of product B with CFR price is 19,450 USD/unit.
 Export 12 units of product A with FOB price is 18,120 USD/unit.
Suppose that these import and export activities have same insurance fee is 1,500
USD, and freight fee is 2,950 USD.
Know that:
 Exchange rate: 1USD = 23,415 VND
 Import rate for A is 10%, B is 11%, and C is 12%
 Export rate for A is 4%, B is 5%, and C is 6%
Required: Calculate the custom duty of ABC Company in Custom office.
Solution
 Import 1 unit of product A with FOB price is 29,300 USD/unit.
 Import duty = (2 x $29,300 + $1,500 + $2,950) x 23,415 x 10%=147,631,575VND
 Import 10 units of product B with CFR price is 12,210 USD/unit.

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 Import duty = (10x $12,210 + $1,500) x 23,415 x 11%= 318,350,340VND
 Import 5 units of product C with CIF price is 19,300 USD/unit.
 Import duty = (5 x $19,300 x 23,415) x 12%= 271,145,700 VND
 Export 3 units of product C with CIF price is 10,020 USD/unit.
 Export duty = (3 x $10,020 + $1,500 + $2950) x 23,415 x 6%= 48,398,805 VND
 Export 4 units of product B with CFR price is 19,450 USD/unit.
 Export duty = (4 x $19,450 + $2950) x 23,415 x 5%=94,538,062.5 VND
 Export 12 units of product A with FOB price is 18,120 USD/unit.
 Export duty = (5 x $18,120) x 23,415 x 4%= 84,855,960VND
b. Solving example of group 4
Example
Company for business ABC in tax period of the following business:
 Imported 50,000 bottles of beer (Product A), CIF calculated VND is 2.900.000
VND/ product. According to the inspection records of the authorities have
1500 bottles of beer are completely damaged due to collisions during the
transportation, are eligible for tax reduction. These products are sold
domestically with the VAT of VND 6,900,000 VND/ product
 Imported 3000 products wooden furniture (product B), CIF calculated 9 USD /
product. After inspection, the customs authorities determine the excess of 100
wooden furniture in comparison with the declaration. During the period, the
company sold 1,500 products with VAT without VAT 100.000 VND / product
 Export 4000 shoes (products C) with the selling price at the warehouse
5,400,000 VND / ton, the cost of transportation from the warehouse to the
port is 200,000 VND / ton (excluding VAT)
Required: Determine the type of business tax to be declared and paid in the
period
Given that:

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  Import tax A 30%, import B 15%, export C 5%
 Excise tax rate A: 10%
 VAT rate of A, B, C: 10%
 Enterprises pay VAT under PPKT. The VAT of other outsourced service costs is
eligible for a deduction of VND 100 million. The purchase transactions of
businesses are now payment through banks
 Tax rate: 1 USD = 23.000 VND
Answer:
(Unit: Million VND)
 Tax paid for Customs Office:
o Import tax:
 Product A: (50,000 - 1,500) x 2.9 x 30% = 42,195
 Product B: (3,000 + 100) x 9 x 0.023 x 15% =96.255
o Export tax:
 Product C: 4,000 x (5.4 + 0.2) x 5% = 1120
o Excise duty:
 Product A: (48,500 x 2.9 + 42,195) x 10% = 18284.5
o VAT on imports:
 Product A: (48,500 x 2.9 + 42,195+18284.5) x 10% = 20112.95
 Product B: (3,100 x 9 x 0.023 +96.255) x 10% = 73.7955
 Tax paid for Tax Office:
o Excise duty:
48500 x 6.9
 Product A: 1+ 10 % x 10% = 30422.72727

 Total excise duty = 30422.72727- 18284.5 = 12138.22727

o Output VAT:
 Product A: (48,500 x 6.9 +12138.22727) x 10% = 34678.82273

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  Product B: 1,500 x 0.1 x 10% = 15
 Product C: 4,000 x (5.4 x 0.5) x 0% = 0
 Total output VAT: 34678.82273 + 15 + 0 = 34693.82273
o Input VAT:
 Transportation cost of Product C: 4,000 x 0.2 x 10% = 80
 VAT of other outsourced service costs: 100
 Input VAT: 20112.95 + 73.7955=20186.7455
 Total input VAT: 80 + 100 +20186.7455= 20366.7455
 VAT payable: 34693.82273- 20366.7455 = 14327.07723

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