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
E. Group question 5......................................................................12
Question:.....................................................................................12
Answer:........................................................................................12

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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:
9 00,000,000
20,000,000+(50,000,000-20,000,000-10,000,000) × (9 00,000,000+10 0,000,000) = 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 HABECO company engaged in beer
production as following:
 Exportation of bottled beer: 250,000 bottles with FOB price of VND 25,000 per
bottle
 Sale of bottled beer in domestic market: 500,000 bottles at price exclusive of
VAT of VND 21,000
Required: Calculate of excise duty payable by HABECO. Given that the excise duty
rate applicable for beer is 50%
Solution
 Exportation of bottled beer is non-excisable transaction
 Excise duty payable on the sale of bottled beer in the domestic market is 
VND 21 ,000
500,000 bottled beer x 1+5 0 %
x 50%= VND 3,500,000,000

 The total excise duty payable by HABECO 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 2018, 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 products A, CIF calculated VND is 2.900.000 VND/ product.
According to the inspection records of the authorities have 1500 products are
completely damaged because of 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 A, CIF calculated 9 USD / product. After inspection,
the customs authorities determine the excess of 100 products B in comparison
with the declaration. During the period, the company sold 1,500 products with
VAT without VAT 100.000 VND / product
 Export 4000 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

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Given that:
 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:

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  Product A: (48,500 x 6.9 +12138.22727) x 10% = 34678.82273
 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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 E. Group question 5
Question:
a. Group giving example to calculate CIT payable
b. Solving example of group 4

Answer:
a. Group giving example to calculate CIT payable
Example
We have data on expenses for the tax year N of BIDV are as follows:
 Base turnover: VND 60,000 million;
 Total expenses: VND 35,000 million of which:
o Asset rent paid in advance for 5 years of renting: VND 90 million
o Material expenses with legitimate invoice VND 10,000 million. This
expense is compliant with the consumed norm defined by the company
o Salaries expense with illegitimate voucher: VND 60 million.
o Donation for victims of a storm with valid voucher: VND 100 million
o Marketing, advertising, reception and brokerage commission expenses
with legitimate vouchers: VND 2,000 million
o Deductible input VAT: VND 200 million
o The rest expenses except for the above expenses are deductible
 Other incomes
o Income received from the provision of technical service for agriculture
production: VND 400 million.
 Last year’s loss: 150 million
Required: Calculate the CIT amount payable by this company for the tax year,
given that: CIT rate is 20%

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Solution
1) Revenue: 500,000,000 VND
2) Total deductible expenses:
 Cost of capital cost: 300,000,000 VND
 Cost of sales: 150,000,000 VND
 Cost of management: 100,000,000 VND
 Financial expenses (interest expense): 6,000,000 VND
 Other cost: 30,000,000 VND
 Total expenses:
300,000,000 VND + 150,000,000 VND + 100,000,000 VND + 6,000,000 VND +
30,000,000 VND=586,000,000 VND
3) Others taxable incomes:
 Fixed asset cost: 200,000,000 VND
 Income from financial activities (interest income): 5,000,000 VND
 Total others taxable incomes
200,000,000 VND + 5,000,000 VND = 205,000,000 VND
4) Assessable income
500,000,000 VND – 586,000,000 VND + 205,000,000 VND = 119,000,000 VND
5) Losses carried forward: 60,000,000 VND
6) Base income
119,000,000 VND – 60,000,000 VND = 59,000,000 VND
7) CIT amount payable:
59,000,000 VND * 20% =11,800,000 VND

b. Solving example of group 4

Example
Year 2020, company ABC have the following business services as follows:

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  Data for 2019: loss of VND 50,000,000
 Year 2020
o Revenue from sales activities, services: 500,000,000 VND
o Expenses:
- Cost of capital cost: 200,000,000 VND
- Cost of sales: 200,000,000 VND
- Cost of management: 90,000,000 VND
- Financial expenses (interest expense): 5,000,000 VND
- Other cost: 20,000,000 VND
o Other income
- Fixed asset cost: 100,000,000 VND
- Income from financial activities (interest income): 6,000,000
VND
Requirement: Calculate CIF year 2017, given that: the corporate income tax
20%
 Solution
1) Revenue: 500,000,000 VND
2) Total expenses:
 Cost of capital cost: 200,000,000 VND
 Cost of sales: 200,000,000 VND
 Cost of management: 90,000,000 VND
 Financial expenses (interest expense): 5,000,000 VND
 Other cost: 20,000,000 VND
 Total expenses:
200,000,000 VND + 200,000,000 VND + 90,000,000 VND + 5,000,000 VND +
20,000,000 VND = 515,000,000 VND
3) Others taxable incomes:

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  Fixed asset cost: 100,000,000 VND
 Income from financial activities (interest income): 6,000,000 VND
 Total others taxable incomes
100,000,000 VND + 6,000,000 VND = 106,000,000 VND
4) Assessable income
500,000,000 VND - 515,000,000 VND + 106,000,000 VND = 91,000,000 VND
5) Losses carried forward: 50,000,000 VND
6) Base income:
91,000,000 VND - 50,000,000 VND = 41,000,000 VND
7) CIT amount payable:
41,000,000 VND x 20% = 8,200,000 VND

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