DIFFERENCES BETWEEN ZERO-RATED SUPPLIES AND NON-TAXABLE SUPPLIES

19.03.2018

In fact, many accountants are confused zero-rated supplies with non-taxable supplies. This leads to some errors in invoices and tax returns.
Non-taxable supplies are products for farming (including Agroforestry products), breeding, and aquaculture, breeds of livestock, plant varieties…. According to Article 4 of Circular no. 219/2013/TT-BTC dated December 31th, 2013.
Zero-rated supplies are applied to exported goods and services; construction and installation overseas and in free trade zones…. According to Article 9 of Circular no. 219/2013/TT-BTC dated December 31th, 2013.

The similarity between zero-rated supplies and non-taxable supplies is that the taxpayers do not have to pay any taxes.

The differences between zero-rated supplies and non-taxable supplies are following items:

Non-taxable supplies Zero-rated supplies
> The taxpayers that provide goods or services being non-taxable objects do not have to implement the procedures for paying taxes.
> The taxpayers that provide goods or services being non-taxable objects are not deducted and refunded an input VAT of those goods or services and have to add the amounts of input VAT to the cost of fixed assets, raw materials or business expenses.
>The taxpayers that provide goods or services being zero-rated objects have to make a tax return and pay full taxes on time to the National Budget on a monthly or quarterly basis.
> The taxpayers that provide goods or services being zero-rated objects are deducted and refunded an input VAT of those goods and services.

Ecovis in Vietnam
With slogan “Outperform for your success”, ECOVIS VSBC aim at both developing a team of dedicated, high caliber professionals and utilizing high technology in order to provide clients with the best services.

Founded in 2006 we have established a good relationship with three partners: the Association of Chartered Certified Accountants (ACCA), Certified Public Accountant (CPA) and Vietnam Association of Certified Public Accountants (VACPA). With the number of 50 staff members, our current businesses are: business consulting, accounting services and training.

Scope/Services:

CONSOLIDATION OF FINANCIAL STATEMENTS IN ACCORDANCE WITH CIRCULAR 200/BTC SAT, SUN 14.04.2018 Hanoi
FINANCE ANALYSIS USING EXCEL SAT, SUN 08.04.2018 Hanoi
DEVELOPMENT OF INTERNAL CONTROL SYSTEM BASED ON COSO FRAMEWORK SAT, SUN 15.04.2018 Hanoi
CONSOLIDATION OF FINANCIAL STATEMENTS IN ACCORDANCE WITH CIRCULAR 200/BTC SAT, SUN 14.04.2018 HCMC
SALARY AND PERSONNEL MANAGEMENT SAT, SUN 14.04.2018 HCMC
INTERNAL CONTROL AND RISK MANAGEMENT SAT, SUN 14.04.2018 HCMC
FINANCIAL ANALYSIS USING EXCEL SAT, SUN 21.04.2018 HCMC

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. For further information, please contact Ecovis VSBC.