SAPP Academy Tel 0466 709 888

8th Floor, Nam A Bank building, 54 Le Thanh Nghi, Hai Ba Trung district, Ha Noi [Link]
2Ard Floor, Green Star Tower, No. 261 Pham Van Dong, Bac Tu Liem district, Hanoi Hotline: 0889 66 22 76
1st Floor, No. 2A Luong Huu Khanh, District 1, Ho Chi Minh City 0889 66 22 67

VALUE ADDED TAX

Section A – Multiple choice questions
1. In 2017, DFC Co, a Vietnamese company, sold goods to SBY Co, another Vietnamese company,
for a total contract value of VND4,840 million, inclusive of 10% value added tax (VAT). According
to the contract, SBY Co is required to make payment within one month of the invoice date or pay
interest of 1% of the contract value per month, for each month of delay. SBY Co paid the invoice
four months after DFC Co issued it on 31 May 2017. What is the amount of total output value
added tax (VAT) (in VND millions, rounded to one decimal) DFC Co is required to declare in
2017 as a result of the above transactions?
A. VND440.0 million
B. VND459.4 million
C. VND454.5 million
D. VND484.0 million
2. RFD Co is a Vietnamese company headquartered in Hanoi. In December 2017, the company
had net output value added tax (VAT) of VND 2,000 million from its business operations in Hanoi.
The company also had input VAT from two investment projects, both of which were in the
construction period and had not generated any revenue.
Project A is located in Hanoi and incurred input VAT of VND 1,500 million. Project B is located in
Vinh Phuc province and incurred input VAT of VND 400 million.
What is the correct treatment for the input value added tax (VAT) incurred by RFD Co in respect
of the two investment projects (assuming the relevant documents for a VAT refund are in
place)?
Input VAT of project A Input VAT of project B
A. Claim refund for VND1,500 million Claim refund for VND400 million
B. Claim refund for VND1,500 million Offset VND400 million with net output VAT
of VND2,000 million from operations of
headquarter
C. Offset VND1,500 million with net output Claim refund for VND400 million
VAT of VND2,000 million from operations of
headquarter
D. Offset VND1,500 million with net output Offset VND400 million with the VND500
VAT of VND2,000 million from operations of million, being the remaining amount of net
headquarter output VAT after offsetting input VAT of
project A

1
 SAPP Academy Tel 0466 709 888
8th Floor, Nam A Bank building, 54 Le Thanh Nghi, Hai Ba Trung district, Ha Noi [Link]
2Ard Floor, Green Star Tower, No. 261 Pham Van Dong, Bac Tu Liem district, Hanoi Hotline: 0889 66 22 76
1st Floor, No. 2A Luong Huu Khanh, District 1, Ho Chi Minh City 0889 66 22 67

3. In 2018, ISC Co, a Vietnamese company, received compensation in cash of VND1,000 million
from an insurance company for damage to goods caused by a fire. According to the insurance
policy, the compensation does NOT cover any value added tax (VAT) on the purchase of the
goods. The insured goods were purchased by ISC Co for VND1,650 million (inclusive of VAT 10%).
What is the amount of output value added tax (VAT) and creditable input VAT (in VND millions)
ISC Co is required to declare in 2018 as a result of the above transactions?
Output VAT Creditable Input VAT
A. VND100 million VND0 million
B. VND0 million VND150 million
C. VND0 million VND0 million
D. VND100 million VND150 million

4. On 30 June 2018, STG Co, a Vietnamese company, identified the value-added tax (VAT)
declaration it made for April 2018 was under-declared by VND1,000 million. It should be noted
that 21 May 2018 was a Monday, and there had been no tax audit at STG Co in 2018.
What is the late payment interest (in VND) which STG Co is required to settle on 30 June 2018,
assuming the under-declared value-added tax (VAT) was settled on that date?
A. VND12,300,000
B. VND15,000,000
C. VND20,000,000
D. VND12,000,000
5. MTL Co is a Vietnamese company. It declared value-added tax (VAT) on a monthly basis for the
three-year period from 2014 to 2016. In 2016, the company generated total revenue of
VND60,000 million. MTL Co continued declaring VAT on a monthly basis for the three-year period
from 2017–2019. In 2017 and 2018, MTL Co’s total declared revenue was VND52,000 million and
VND58,000 million respectively. However, following a tax audit in 2018, the company’s revenue
in 2017 was adjusted to VND48,000 million.
Which of the following combinations correctly describes the value-added tax (VAT) filing
requirements of MTL Co for the period 2017–2019 as a result of the tax audit?
2017 2018 2019
A. Monthly basis Quarterly basis Quarterly basis
B. Monthly basis Monthly basis Quarterly basis
C. Monthly basis Monthly basis Monthly basis
D. Quarterly basis Quarterly basis Quarterly basis

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 SAPP Academy Tel 0466 709 888
8th Floor, Nam A Bank building, 54 Le Thanh Nghi, Hai Ba Trung district, Ha Noi [Link]
2Ard Floor, Green Star Tower, No. 261 Pham Van Dong, Bac Tu Liem district, Hanoi Hotline: 0889 66 22 76
1st Floor, No. 2A Luong Huu Khanh, District 1, Ho Chi Minh City 0889 66 22 67

6. NLED Co is a new foreign-invested company that was established and began trading in
Vietnam by the end of 2019. The company’s fiscal year-end is 31 December. NLED Co is eligible
to declare value-added tax (VAT) on a monthly basis.
Which of the following combinations correctly describes the deadlines for settling the taxes
which NLED Co will be subject to in 2020?
VAT CIT Business registration fee
A. The last day of the month The 30th day of the next The 90th day of the next
quarter year
B. The 30th day of the next The 90th day of the next The 10th day of the next
month quarter year
C. The 20th day of the next The 30th day of the next The 30th day of the next
month quarter year
D. The 30th day of the next The 30th day of the next The 30th day of the next
month quarter year

7. SWR Co, a Vietnamese company, has three separate sales outlets. In December 2014, each of
the outlets issued an invoice for the sale of one ton of construction materials to three separate
customers as follows. The sale of construction materials is subject to value added tax (VAT) at
the rate of 10%. – Invoice 1: selling price VND20 million, VAT VND2 million – Invoice 2: selling
price VND22 million, no VAT as the selling price is inclusive – Invoice 3: selling price VND20
million, no VAT because the construction materials were given to the customer for free as part
of a promotion which has been registered with the authorities.
What is the output value added tax (VAT) which SWR Co should have declared in December
2014, if no amendments were made to the invoices?
A. VND4 million
B. VND2 million
C. VND4.2 million
D. VND6.2 million

3
 SAPP Academy Tel 0466 709 888
8th Floor, Nam A Bank building, 54 Le Thanh Nghi, Hai Ba Trung district, Ha Noi [Link]
2Ard Floor, Green Star Tower, No. 261 Pham Van Dong, Bac Tu Liem district, Hanoi Hotline: 0889 66 22 76
1st Floor, No. 2A Luong Huu Khanh, District 1, Ho Chi Minh City 0889 66 22 67

Section B – Response case questions

Question 1:
RETM Co is a real estate developer. In 2016, RETM Co purchased the land use right in relation to
a 3,750m2 piece of land in Binh Duong for VND115,500 million (inclusive of value added tax (VAT)
on infrastructure) from TTN Co. The invoice issued to RETM Co by TTN Co was as follows:
VND
million
Selling price (net of VAT) 112,500
Less: Land-use-right value (exempt from VAT) (VND22 million per m2) (82,500)
Equals: Value of infrastructure 30,000
Output VAT (10% of VND30,000 million) 3,000
Total amount payable (112,500 + 3,000) 115,500

RETM Co subsequently built 15 villas on the land at a total development cost of VND49,500
million (including VAT of VND4,500 million). In June 2017, RETM Co sold all of the villas to clients
for VND13,800 million (net of VAT) each. RETM Co agreed with the tax authorities that it would
deduct the allocated land-use-right plus infrastructure costs as charged by TTN Co based on the
area (m2) from the VAT-taxable revenue of each villa.
Required:
Calculate the output value added tax (VAT) which RETM Co can charge on the invoice for each
villa sold after deduction of the land-use-right and infrastructure costs, and the total VAT
payable to be declared by RETM Co in June 2017.
Notes:
1. The sale of the villas by RETM Co is standard rated for VAT purposes.
2. You should assume that all the input VAT amounts are valid and supported by proper
documents
Question 2:
VMC Co is a company established in Vietnam, whose main activities include the manufacture and
trading of consumer products. VMC Co had the following transactions during 2020:
(1) VMC Co purchased materials from a supplier in 2019, for which an invoice with a value added
tax (VAT) amount of VND1,200 million was issued in January 2020. The invoice was paid in March
2020 via a bank, but VMC Co forgot to claim the input VAT. In December 2020, when the tax
authorities visited the company to audit the period 2017 to 2019, they were aware of this issue,
but did not make any decision.

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 SAPP Academy Tel 0466 709 888
8th Floor, Nam A Bank building, 54 Le Thanh Nghi, Hai Ba Trung district, Ha Noi [Link]
2Ard Floor, Green Star Tower, No. 261 Pham Van Dong, Bac Tu Liem district, Hanoi Hotline: 0889 66 22 76
1st Floor, No. 2A Luong Huu Khanh, District 1, Ho Chi Minh City 0889 66 22 67

2) During 2020, VMC Co purchased a 48-seater bus for transporting its employees for VND2,500
million (exclusive of VAT), and a four-seater car for the general director costing VND2,200 million
(exclusive of VAT).
(3) In August 2020, VMC Co purchased 500 moon cakes for a total value of VND2,750 million
(exclusive of VAT) as promotional gifts to clients. The promotion programme was registered with
the relevant tax authorities.
(4) VMC Co purchased goods with an invoiced value of VND8,000 million (exclusive of VAT). The
whole of this inventory was damaged during its transportation to the company’s warehouse. The
insurer agreed to compensate VMC Co for the VAT incurred in respect of 40% of the goods due
to the accident.
Also, in 2020, VMC Co paid for the expenses in relation to the establishment of a branch in a
different province. Before the branch was opened (and obtained a tax code), all invoices were
addressed to VMC Co’s tax codes and addresses (with the specific authorisation issued to VMC
Co by the legal representative of the branch). The total VAT amount in respect of these invoices
amounted to VND3,200 million. Invoices for some of these expenses with VAT amounting to
VND300 million were paid by VMC Co from a bank account which was intended to be transferred
to the branch later. This bank account has not been registered with the tax authorities as VMC
Co’s bank account. The standard rate of VAT is applicable to all of VMC Co’s VATable sales and
purchases.
Required:
(a) Calculate the creditable and/or non-creditable input value added tax (VAT) with regard to
each of items (1) to (4), and briefly explain the reasons for their treatment. Note: You should
present your answer in the form of a table with the following columns: Item number; Amount
exclusive of VAT; Creditable input VAT; Non-creditable input VAT; and Brief explanation.
(b) Explain the VAT treatment of the payments made on behalf of the branch, for both VMC Co
and its branch, and calculate the amount of the deductible input VAT for VMC Co and/or the
branch in respect of the expenses for which invoices were issued to VMC Co.
Question 3:
SCG Co owns a chain of retail stores and supermarkets in Vietnam. The company’s transactions
in December 2017 included the following:
Transaction 1: SCG Co set up a new supermarket in Binh Duong. The total construction costs
invoiced by the contractor on 1 December 2017 were VND660 billion (inclusive of value added
tax (VAT) at 10%). The completed project was handed over to SCG Co on 1 January 2018 and SCG
Co intends to depreciate the property at the rate of VND50 billion each year from 2018 onwards.

5
 SAPP Academy Tel 0466 709 888
8th Floor, Nam A Bank building, 54 Le Thanh Nghi, Hai Ba Trung district, Ha Noi [Link]
2Ard Floor, Green Star Tower, No. 261 Pham Van Dong, Bac Tu Liem district, Hanoi Hotline: 0889 66 22 76
1st Floor, No. 2A Luong Huu Khanh, District 1, Ho Chi Minh City 0889 66 22 67

Transaction 2: On 10 December 2017, SCG Co purchased a four-seater car with a quoted price of
VND1,870 million (inclusive of VAT at 10%) for its general director. The seller granted SCG Co a
6% discount off the quoted price of the car.
Transaction 3: On 20 December 2017, SCG Co received a cash incentive of VND1 billion from SG
Milk to display their products in an exclusive place in SCG Co’s supermarkets and stores in January
and February 2018.
Transaction 4: During December 2017, SCG Co gave a free helmet to the first 500 customers who
purchased goods with an invoice value of more than VND1 million. This promotional programme
was registered with the Department of Industry and Trade as a promotion. The helmets were
purchased by SCG Co for VND220,000 each (inclusive of VAT at 10%) on 1 December 2017. All of
the helmets were given to customers during the promotion.
Transaction 5: SCG Co produces bottled water for sale in its supermarket chain with the selling
price of VND4,400 per bottle (inclusive of VAT at 10%). During December 2017, SCG Co issued
2,000 bottles of the water for internal use of which 50% were used in meetings with
suppliers/customers/partners, 30% for processing foods and other drinks for sale in the
supermarket, and 20% were used on the annual vacation trip for SCG Co’s employees.
All the transactions were settled via a bank, unless otherwise stated.
Required:
For each of the transactions (1 to 5) calculate the output and/or creditable input value added
tax (VAT) for SCG Co in the month of December 2017.
Question 4:
(a) RBP Co, a company established in Vietnam, processes rubber products, including rubber latex
(i.e. unprocessed rubber materials, which are a VAT-exempt supply), and processed rubber
products (which are a VAT-taxable supply). RBP Co currently has the following two investment
projects in Vietnam, both of which commenced operations in 2015:
1. Project A: whereby RBP Co invested in a rubber plantation to farm rubber latex for both
domestic sale without processing (i.e. VAT exempt) and for input into a newly built rubber
processing factory (i.e. VAT taxable).
2. Project B: whereby RBP Co invested in a rubber plantation to farm rubber latex for domestic
sale without processing (i.e. VAT exempt) only.
The following information relates to the two projects for the year 2015 (the first year of
operation):
Project A Project B
VND billion VND billion

6
 SAPP Academy Tel 0466 709 888
8th Floor, Nam A Bank building, 54 Le Thanh Nghi, Hai Ba Trung district, Ha Noi [Link]
2Ard Floor, Green Star Tower, No. 261 Pham Van Dong, Bac Tu Liem district, Hanoi Hotline: 0889 66 22 76
1st Floor, No. 2A Luong Huu Khanh, District 1, Ho Chi Minh City 0889 66 22 67

Valid input VAT for investment in fixed assets (plantation and 100 20
factory)
Valid input VAT for investment in fixed assets (plantation and 10 3
factory)
Revenue from domestic latex sales 12 10
Revenue from sales of processed rubber products 36 0
Required: For each of Project A and Project B, state, giving reasons, how much of the input
value added tax (VAT) relating to (i) the investment in fixed assets and (ii) operations, is
deductible.
(b) RBP Co has received the following invoices:
VAT input amount
Invoice Additional information
VND million
The payment for this invoice went to a bank account which,
1 200 due to a mistake, RBP Co had not registered with the tax
authorities at the time of payment
Due to a dispute between the parties, this invoice was not
2 350 issued until 100 days after the goods had been delivered to
RBP Co
This invoice, which was manually written by seller, contains
3 150
blank spaces without crossing
This invoice, which was issued by a supermarket, contains no
4 8
seller’s chop
Required: State, giving reasons, for each of the invoices (1) to (4) whether the input VAT will
be deductible or non-deductible to RBP Co.
Question 5:
FNF JSC is a company which was established in Vietnam in 2013. The company generates revenue
from transportation activities. These activities include public transportation by buses and other
transportation activities. Under a feasibility study, the estimated revenue allocation between
public transportation by buses and other transportation activities is 65% and 35% respectively.
According to prevailing regulations, public transportation by buses is exempt from value added
tax (VAT).
FNF JSC was in the construction and investment period from 1 January 2013 to 31 August 2014.
The total amount of input VAT arising from non-current assets during that period was VND80,000
million, of which VND20,000 million related to the buses specifically used for public
transportation activities. FNF JSC started generating revenue from September 2014. The revenue
generated between September 2014 and August 2017 was as follows:

7
 SAPP Academy Tel 0466 709 888
8th Floor, Nam A Bank building, 54 Le Thanh Nghi, Hai Ba Trung district, Ha Noi [Link]
2Ard Floor, Green Star Tower, No. 261 Pham Van Dong, Bac Tu Liem district, Hanoi Hotline: 0889 66 22 76
1st Floor, No. 2A Luong Huu Khanh, District 1, Ho Chi Minh City 0889 66 22 67

Revenue (unit: VND million) Public transportation by Other transportation

buses activities
September 2014–August
80,000 32,000
2015
September 2015–August
120,000 41,000
2016
September 2016–August
150,000 77,000
2017
Required:
(a) Calculate the total creditable input value added tax (VAT) which FNF JSC can claim in respect
of the purchase of non-current assets as at 31 August 2014
(b) Explain the appropriate tax treatment with regard to the creditable input VAT relating to
the non-current assets of FNF JSC during the three-year period from September 2014 to August
2017, and calculate the adjustments needed, if any, to the creditable input VAT.
Question 6:
CSN Co operates a golf course in Ha Long, Quang Ninh province. The company’s information
regarding golf course income for the period ended 30 June 2018 is as follows:

• Membership fees from players: VND16,000 million

• Sales of tickets for golf training ground: VND6,000 million
Note: The collections are inclusive of value added tax (VAT) at 10% and special sales tax at 20%.
Required: Calculate the taxable revenue for value added tax (VAT) purposes and the output
VAT which CSN Co should declare for the period ended 30 June 2018.