Official Dispatch 1518/CTDAN-TTHT 2024 Da Nang City making of value-added tax invoices and tax declaration

To: Da Nang Trading Limited Company

Tax identification number: 0400100834

Address: 18 - 20 Hoang Hoa Tham Street, Thanh Khe District, Da Nang City

 Da Nang City Tax Department received Document No. 05/CV-DTC dated January 18, 2024 of Da Nang Trading Limited Company (hereinafter referred to as Company), which requests for instructions on making value-added tax (VAT) invoices and tax declaration when selling goods at the ask price higher than the bid price. Regarding this issue, Da Nang City Tax Department gives the following opinions:

Pursuant to:

- Provisions of Clause 1 Article 5 and Clause 1, Clause 6 Article 11 of the Law on Price No. 11/2012/QH13 on principles of price management by the State and rights of production or business organizations and individuals in the price domain;

- Provisions of Point dd Clause 1 Article 50 of the Law on Tax Administration No. 38/2019/QH14 on tax assessment for taxpayers violating the tax laws;

- Provisions of Clause 1 Article 4 of the Government's Decree No. 123/2020/ND-CP dated October 19, 2020, on principles of making, management and use of invoices and documents;

- Provisions of Point a Clause 3 Article 7 of the Government’s Decree No. 10/2022/ND-CP dated January 15, 2022, on registration fee calculation price of automobiles, vehicles similar to automobiles and motorcycles;

- Provisions of Clause 1 Article 7 and Point a Clause 5 Article 12 of the Ministry of Finance's Circular No. 219/2013/TT-BTC dated December 31, 2013, on taxed price and instructions for determination of output VAT.

Based on the aforesaid provisions, in principle, enterprises are allowed to determine their own prices for the goods and services they produce and trade, except for those on the List of goods and services priced by the State. However, the selling price of the enterprises must ensure compliance with normal transaction prices on the market. The State shall perform price management according to market mechanism; respect the right to self-determination and price competition of production and business organizations and individuals in accordance with law.

Accordingly, in case the Company lowers the selling price of motorcycles to deal with inventory and reduced vehicle quality, the Company may determine the price itself and shall take responsibility for the selling price but must ensure consistent with normal market transaction prices of motorcycles in stock at the time of sale. The Company shall make invoices and declare output VAT according to the actual selling price under instructions in Clause 1 Article 7 and Point a Clause 5 Article 12 of the Ministry of Finance's Circular No. 219/2013/TT-BTC.

In case through inspection or examination, the tax office has sufficient grounds to prove that the Company's selling price is not consistent with the normal transaction price on the market, it is entitled to impose tax according to the provisions of Article 50 of the Law on Tax Administration No. 38/2019/QH14.

 Da Nang City Tax Department hereby informs the Company for implementation. For further instructions, please make direct contact with the Tax Department (Propagation and Service Office, Tel. 0236.3823556), or research tax policies posted on Da Nang Tax Department's website:  http://danang.gdt.gov.vn ./.