Part E: Value Added Tax Section A

Part E: Multiple Choice Question: 50 questions

In 2020, HAN Co, a Vietnamese company, sold goods to MGN Co, another Vietnamese
company, for a total contract value of VND 4,840 million, inclusive of 10% value added tax
(VAT). According to the contract, MGN Co is required to make payment within two months
of the invoice date or pay interest of 2% of the contract value per month, for each month of
delay. MGN Co paid the invoice three months after HAN Co issued it on 31 May 2020
together with interest on late payment.
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 2020 as a result of the above
transactions?
A. VND440.0 million
B. VND448.8 million
C. VND493.7 million
D. VND484.0 million

2.
RFD Co is a Vietnamese company headquartered in Hanoi. In December 2020, the
company had net output value added tax (VAT) of VND2,000 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 VND1,500 million. Project B is located in Vinh
Phuc province and incurred input VAT of VND400 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 Claim refund for VND400 million
million
Offset VND400 million with net output
B. Claim refund for VND1,500
VAT of VND2,000 million from
million
operations of headquarter
 C Offset VND1,500 million with net Claim refund for VND400 million
output VAT of VND2,000 million
from operations of headquarter
D Offset VND1,500 million with net Offset VND400 million with the
output VAT of VND2,000 million VND500 million, being the remaining
from operations of headquarter amount of net output VAT after
offsetting
input VAT of project A

How are the taxable prices determined for goods and services used for registered sales
promotion in accordance with trade laws?
A. Sales prices excluded VAT
B. Sales prices included VAT
C. Price of similar products, goods or services at the time of consumption of goods or
services
D. equal to zero

4.
In 2020, PCA Co, a Vietnamese company, received compensation in cash of VND1,500
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 PCA Co for VND1,870 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 2020 as a result of the above transactions?
Output VAT Creditable input VAT
A. VND150 million VND0 million
B. VND0 million VND170 million
C. VND0 million VND0 million
D. VND150 million VND170

million 5.
 Hoang Thuong Cosigned a business cooperation contract with Thanh Long Co. Due to some
unexpected reasons, Thanh Long Co must cancel the contract and have to compensate Hoang
Thuong Co an amount of VND33 million.
What is the amount of VAT that Hoang Thuong Co has to pay?
E. Hoang Thuong Co doesn't have to declare and pay the VAT
F. VND3 million
G. VND3.3 million
H. Hoang Thuong Co is not subject to VAT

6.
Which of the following cases that input VAT is deductible?
(i) Goods which are used by an enterprise for advertising and promoting the production and
trading of goods and services subject to VAT
(ii) Goods purchased by an enterprise for producing goods to be provided to foreign
organizations and individuals or international organizations for humanitarian or non-refundable
aid
(iii) Goods used for the producing goods and services not subject to VAT
(iv) Goods which are lost or damaged due to a natural calamity, fire
A. (i) and (iv) only
B. (ii), (iii) and (iv) only
C. (i), (ii) and (iv) only
D. (i), (ii), (iii) and (iv)

7.
In 2020, Rich Co, a Vietnamese company, allocated goods to promotional purposes. The goods
had associated input value added tax (VAT) of VND3,000 million and, 65% of them were
purchased whilst 35% were produced using materials procured by Rich Co during 2020. All
promotion programmes were duly registered with the authorities. According to Rich Co's 2020
accounting records, 75% of Rich Co's revenue was taxable for VAT purposes, whilst the other
25% was VAT exempt. The company cannot separately account for the input VAT relating to
the goods used for promotion.
What is the final amount of creditable input VAT that Rich Co should declare in 2020?
A. VND2,250 million
 B. VND780 million
C. VND1,300 million
D. VND2,000 million

8.
Which of the following case is eligible for the VAT tax rate of 0%?
A. Goods for duty-free store
B. Offshore reinsurance
C. Unprocessed minerals
D. Capital transfer aboard

9.
In 2020, CDC Co, a company incorporated in Vietnam, purchased a four-seated car for the
General Director. The quoted price of the car was VND 2,178 million (inclusive of value
added tax (VAT)) CDC Co obtained a 20% discount off the quoted price from the car dealer.
The sales invoice from the dealer shows both the quoted price and the discount
What is the amount of creditable input VAT (rounded to the nearest VND million)
which CDC Co should claim for the car in the fiscal year 2020?
A. VND 198 million
B. VND 158 million
C. VND 174 million
D. VND 218 million

10. The tax authority inspects and examines tax and detects that the invoice has a lower
VAT rate than prescribed.
How should the buyer be handled in this case?
A. Request the buyer to re-negotiate with the seller to re-issue a new invoice in
accordance with the prescribed tax rate and make additional declarations.
B. Deduct input tax at the tax rate stated on the invoice.
C. Deduct input tax at the prescribed tax rate.
D. There is no input tax deductible
 Dong Phong Co, a Vietnamese company applying the value added tax (VAT) deduction
method, provided services to a foreign customer for VND300 million and charged VAT at
5% on the invoice. In a tax review by a consultant, it was identified that the VAT rate used
on the invoice should have been 10%. However, Dong Phong Co cannot claim back the
undercharged VAT from the foreign customer.
What is the amount of additional output VAT which Dong Phong Co will need to pay
to the tax authorities?
A. VND13.6 million
B. VND15 million
C. VND20 million
D. VND30 million

12.
Thanh Van Co and Hai Duong Co are both Vietnamese companies. They signed a service
contract of geological survey for Hai Duong Co in two locations: Vietnam and Singapore.
How VAT output is treated for this activity?
A. The works conducted in Singapore is subject to the VAT rate of 0%; The works
conducted in Vietnam is not required to declare and calculate value added tax
according to regulations.
B. The works conducted in Singapore is subject to the VAT rate of 0%; The works
conducted in Vietnam is required to declare and calculate value added tax according to
regulations.
C. Total value of the service contract is subject to the VAT rate of 0%
D. Total value of the service contract must be declared and calculated the VAT according
to regulations

SHM Co, a Vietnamese company, has three separate sales outlets. In December 2020, 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 VND30 million, VAT VND3 million
Invoice 2: selling price VND27 million, no VAT as the selling price is inclusive
— Invoice 3: selling price VND15 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 2020, if no amendments were made to the invoices?
A. VND3 million
B. VND7.2 million
C. VND5 7 million
D. VND4 2 million

14.
Which of the following is not a taxpayer under the current VAT regulation?
A. Individual engages in trading
B. Cooperative
C. Branches of the export processing companies that are established to trade goods in
Vietnam
D. Overseas branches of local firm

15.
The following information of Khai Hoan Co in April 2021 as follow:
Selling car by 3-month installment method, the installment price excluding VAT is VND30.3
million/car (in which the car price is VND30 million/car, the 3-month installment interest is
VND0.3 million). In April 2021, Khai Hoan collected VND10.1 million.
What is the VAT taxable price of Khai Hoan Co?
A. VND30 million
B. VND30.3 million
C. VND10.1 million
D. VND10 million

16.
Which of the following statements is correct in respect of taxable price for VAT purpose?
A. Taxable prices of goods and services used for sales promotion is always the market value
 B. Taxable prices for books are their cover prices
C. VAT-exclusive remunerations or commissions on brokering assessment, brokering
compensation examination, claiming compensation from a third person (including the
costs) earned by the insurer are taxable prices
D. Taxable price for hire purchase is the total payment of all installments

17.
Which of the following statements is not correct in respect of VAT deductible?
A. Non deductible VAT input of 9-seater or less cars (except for those that are used for
cargo transport, passenger transport, tourism or hotel services) is not allow to add in the
cost of
Cdf

B. Input VAT on the goods used as gifts, sale promotions or advertising serving the
manufacture of sale of taxable goods is deducted in full.
C. The VAT paid under a decision on tax imposition made by a customs authority is
deducted in full.
D. Input VAT from fixed assets investment in a project (at the investment stage) for both
exempt and taxable supplies is only deductible for the part attributable to taxable supplies

18.
Which of the following statements is correct in respect of VAT refund?
A. An organisation having accumulated VAT deductible for 12 months or 4 quarter
continuously are allowed to refund VAT if the amount of accumulated deductible is 300
million or more
B. When a taxpayer using credit method has a new project in another province, the
taxpayer shall make a separate declaration of tax on the project and get refund when
accumulated VAT input is 300 million or more
C. If the taxpayer purchases goods to export, input VAT on exported goods is only
refundable if it can separately be accounted for.
D. For ODA projects, “refund first, investigation later” mechanism would be applicable
 19.
VidX Co imported the original video player, the import price according to the contract and
invoice is VND1 million/unit, the import taxable price is VND1.25 million/unit. The import
tax rate is 30% and the VAT rate is 10%.
What is the payable VAT of VidX Co?
A. VND130,000
B. VND162,500
C. VND137,500
D. VND155,000

20.
Hoa Hien Co is VAT deduction method taxpayer. In October 2020, Hoa Hien follows the
customer's request to issue an invoice that does not include the output VAT, but only
records the total payment value of VND220. The goods sold by Hoa Hien are subject to the
VAT rate of 10%.
What is the amount of output VAT for the above invoice?
A. VND22 million
B. VND20 million
C. VND0
D. VND200 million

21.
Which of the following statements is correct in respect of VAT refund?
A. An organisation having accumulated VAT deductible for 3 months continuously are
allowed to refund VAT if the amount of accumulated deductible is 300 million or more
B. When a taxpayer using credit method has a new project the same location with current
business, it can get refund when accumulated VAT input is 300 million or more
C. If the taxpayer purchases goods for both export and sales in Vietnam, it can claim VAT
refund of net VAT is 300 million or more
D. The ODA project can claim VAT refund without minimum cap for claim
22.
On 1 June 2021, Thanh Thai Co purchased product from Duong Cam Co twice, the first
time was worth VND33 million (including 10% VAT), the second time was worth VND11
million (including 10% VAT). Two sales invoices are conducted separately on June 1,
2021.
Thanh Thai pays Duong Cam as follows: Transfer from Thanh Thai's bank account to
Duong Cam's bank account VND27.5 million; Thanh Thai's employees pay VND16.5
million in cash to Duong Cam's bank account.
What is the amount of input VAT deductible from the above two invoices of Thanh
Thai Co?
A. VND4.4 million
B. VND3.3 million
C. VND2.5 million
D. VND2 million

23.
The tax authority inspects and examines tax and detects that the invoice has a higher VAT
rate than prescribed.
How should the buyer be handled in this case?
A. Request the buyer to re-negotiate with the seller to re-issue a new invoice in
accordance with the prescribed tax rate and make additional declarations.
B. Always deduct input tax at the prescribed tax rate.
C. Deduct input tax at the tax rate stated on the invoice with condition attached
D. There is no input tax deductible

24.
Zebra Ltd (ZPL) is VAT registered trader in Hai Phong. ZPL’s main customer, Hydrogen
Pte Ltd (HPL), a Singapore-incorporated company in Vietnam was wound up by a court
order on 1 June 2020.
ZPL made the following sales to HPL on credit and has reported the transactions in its VAT
return for the relevant quarter:
(i) VND100,000 million (exclusive VAT) for goods which were delivered to HPL’s
warehouse in Vietnam on 2 January 2020 and for which an invoice was issued on the
same day;
 (ii) VND50,000 million (exclusive VAT) for sales of goods which were delivered to the
warehouse of HPL’s subsidiary in China on 2 December 2019.
HPL has not paid ZPL for these sales. As HPL has been wound up, ZPL has written off the trade
debt owing by HPL in its accounts for the quarter ended 30 June 2020.
What is the amount of VAT bad debt relief which Zebra Ltd can claim in the quarter
ended 30 June 2020?
A. VND10,500 million
B. VND7,000 million
C. VND3,500 million
D. VND0 million

25.
Aspire Ltd, a VAT registered company, incurred the following expenses in the quarter ended
30 June 2020:
Cost VAT

VND million VND million

Parking charges 1,200 120
Trade association subscription 1,000 100
Golf club subscription — for directors 2,000 200
What is the amount of input VAT which Aspire Pte Ltd can claim for the quarter ended
30 June 2020?
A. VND220 million
B. VND420 million
C. VND120 million
D. VND200 million

26.
Atlas Ltd (AL), a VAT registered trader, commercial company in Vietnam, has the following
transactions for the quarter ended 30 September 2020:
- On 1 September 2020, AL received a security deposit from a customer totally VND1,000
million. This deposit is refundable.
- On 21 September 2020, AL issued an invoice for VND2,000 million to a customer — Changi
Company. The goods were delivered to the customer's warehouse in Malaysia on 1 October
2020.
What is the amount of output VAT chargeable by Atlas Ltd for the quarter ended 30
September 2020?
A. VND205 million
B. VND0 million
C. VND140 million
D. VND65 million

27.
Company B import tourism car for business. The import taxable price is USD20,000, the import
duty is 30%, the consumption tax rate is 50%, the VAT rate is 10%
What is the VAT output relating to this transaction?
A. USD2,000
B. USD3,000
C. USD3,900
D. USD1,000

28.
Low Equipment (LE), a VAT registered trader in Vietnam, sold a fully automated computing
system for VND100,000 million to a customer. LE allowed the customer to trade in an old
computing system for VND10,000 million, leaving VND90,000 million left to pay. To entice
early payment of the remaining amount within 15 days, LE offered a 5% prompt payment
discount. However, the customer paid after the 15-day discount period.
What is the amount of output VAT Low Equipment should charge on this transaction?
A. VND9,500 million
B. VND8,550 million
C. VND9,000 million
D. VND10,000 million

29.
Ti Trading Ltd operates in Vietnam, has suffered the following losses of its canned food
inventory during 2020:
- Lost inventory, with value added tax (VAT) of VND16,000,000 due to a rainstorm
- Stolen inventory, with VAT of VND24,000,000, due to poor warehouse security
- Scrapped inventory, with VAT of VND32,000,000 due to being past its expiry date
What is the amount of irrecoverable input value added tax on the loss of inventory?
A. VND72,000,000
B. VND56,000,000
C. VND0
D. VND24,000,000

30.
YLL Department Store in Hanoi is offering a registered promotion whereby each walk-in
customer can receive a coupon of VND 100,000. The coupon can be redeemed if a customer
spends over VND2 million. Ms Hao received a coupon and paid VND3.2 million for a kettle
which had a selling price of VND3.3 million, value added tax (VAT) inclusive. The cost of the
kettle was VND2.2 million (excluding creditable input VAT).
What are the VAT implications for YLL Department Store concerning the above
transactions?
Input VAT Output VAT
A. VND0.22 million creditable VND0.29 million
B. VND0 million creditable VND0.32 million
C. VND0.22 million creditable VND0.3 million
D. VND0.22 million creditable VND0.32 million

Alpha Limited, a company operates in Hue, lost its inventory during a heavy rainstorm in
August 2020. The purchase cost of the inventory was VND100 million excluding value added
tax (VAT) of VND10 million. The normal selling price of these goods would have been million
VND150 million (excluding VAT). The insurance company has made a compensation payment
of VND20 million to Alpha Limited.
What is the amount of irrecoverable input VAT on the inventory lost during the
rainstorm?
A. VND0
B. VND8 million
C. VND3.586 million
D. VND16 million

32.
Which of the following are deemed sales for value added tax (VAT) purposes?
(1) The pens with company logo given to the clients on the year end clients meeting party
(2) A sample of hair conditioner given to the walk-in customers to a department store
(3) Finished goods delivered to a warehouse in another city for storage
(4) Fixed assets contributed as a capital injection to a subsidiary
(5) Accountancy services provided free-of-charge to a non-government organisation for
charity purposes
A. 1, 2, 3, 4 and 5
B. 1 and 3 only
C. 2, 3 and 4 only
D. 1 and 2 only

DPN Ltd, an export processing company, apart from manufacturing for exportation, is also
licensed to import goods for sale or for exportation, and the company must establish a
branch to do this task. This branch shall independently keep accounting records, declare and
pay separate VAT on such task instead of including it in the VAT on manufacturing for
exportation.
Which of the following correctly describes the VAT declaration and payment?
A. DPN Ltd declares all the taxes which include also the taxes incurred by the branch
B. The branch which is not related to tax-exempt exported goods, does not have to
declare and pay
C. The branch accounts, declares and pays taxes separately, does not account for
production activities for export.
D. There are no correct answers
34.
Pastes Co signs a contract to raise pigs with Filed Co, under which Pastes Co receives
remuneration of VND100,000 million from Filed Co or sells pigs to company B for
VND100,000 million. After that, Filed Co processed into pork and sold VND300,000
million.
Which of the following correctly describes the VAT treatment in the above case?
A. Pastes Co pays the output VAT on the revenue of VND100,000 million
B. Pastes Co pays the output VAT on the remuneration of VND100,000 million
C. Filed Co pays the zero output VAT because the selling price is equal to the payment
for pig raising
D. Filed Co pays the output VAT on the revenue of VND300,000 million.

35.
In March 2019, Apat Ltd, which pays VAT using deduction method, pledges its machinery
and equipment as collateral to take a loan at XBank, which is due in one year (the deadline is
March 31, 2020). On March 31, 2020, Apat defaults on the loan and has to transfer the
collateral to XBank. Apat must follow the prescribed procedure for collateral transfer.
XBank sells the collateral to recover the debt.
Which of the following correctly describes the VAT payment of XBank?
A. The bank pays VAT according to the value of the collateral sold.
B. The bank does not have to pay VAT because the sold collateral is not subject to VAT.
C. The bank pays VAT on the amount of the irrecoverable lost loan.
D. Both bank and Apat Ltd must pay output VAT.

S6.
In April 2020, X Ltd contributed capital in the form of machinery and equipment to the
creation of joint-stock company Y. The company X Ltd's contribution is valued at VND4.5
billion, which is equal to 25% of company Y's total capital. In November 2020, company X
sold this capital contribution to ABC Foundation for VND6 billion.
Which is VAT taxable price relating to the disposal of capital contribution transaction?
A. VND6 billion
B. VND4.5 billion
 C. VND 1.5billion
D. The transaction is not subject to VAT

37.
In July 2020, Vegatable.ly Co sells goods to Carrot Co for totally price is VND880 million
(included VAT). According to the contract, Carrot Co shall pay in instalments for 02
months with an interest of 1.5% of the total payment per month. After 02 months,
Vegatable.ly Co received from Carrot Co an amount that includes VND880 million in price
and VND13.2 million in interest (VND880 million x 1.5% x 1 months).
What is the VAT taxable price relating to the sales activity above?
A. VND800 million
B. VND893.2 million
C. VND880 million
D. VND13.2 million

38.
WaterWard Co manufactures bottled water. The VAT-exclusive price of a bottle on the
market is VND8,000. When WaterWard Co produced 500 bottles for the staff children's
soccer tournament in the summer of 2020.
Which of the following correctly describe the VAT treatments that WaterWard Co should
adopt in this case?
A. Declare and calculate the output VAT on 500 bottles at the selling price
B. Exemption from the output VAT declaration
C. Declare and calculate the output VAT on 500 bottles at the factory price
D. Declare and calculate the output VAT on 500 bottles at the 0 price

S9.
In 2020, Hose Co, a real estate company, is allocated with land by the state to build houses
for sale. Land levy is VND50 billion (before deducting compensation for land clearance and
land
levy reduction). Land levy is reduced by 20%. Compensation for land clearance is VND25
billion.
What is the amount of deductible land value for calculating the value added tax (VAT)?
A. VND25 billion
B. VND10 billion
C. VND35 billion
D. VND15 billion

40.
VN-JP is a joint-stock company specialized in infrastructure for industry and services. VN-JP
leases land from the state and pays a lump sum of land rent to build infrastructure of an
industrial park; the lease period is 50 years. The land area is 400,000m2, the rent paid once for
the entire lease period is VND93,000/m2. The company is not exempted or reduced land rent.
After investing in the construction, VN-JP signs a lease contract for the investor Nhat Minh
with the lease period of 20 years, the leased land area is 27,000m2, the rental unit price at the
time of signing the contract is VND800,000/m2 for the whole period, the price includes VAT.
What is the estimated amount of VAT for the lease contract with Nhat Minh?
A. VND2,160 billion
B. VND1,560 billion
C. VND1,872 billion
D. Exemption from VAT

41.
Si Phon Co signs a contract to process 200,000 pairs of soles. The payment for processing is
900 million VND. The contract specifies that soles will be sent to Liter Co in Vietnam to
produce complete shoes.
In this case, which of the following correctly describes the VAT declaration of Si Phon Co?
A. VAT of 5% on the revenue of VND900 million
B. VAT of 0% on the revenue of VND900 million
C. VAT of 10% on the revenue of VND900 million
D. Exemption from VAT
42.
How to indetify the VAT taxable price of real estate transaction of a company?
A. Real estate transfer price
B. Total selling price excluding land use right
C. Real estate transfer price minus actual land price at the time of transfer
D. None of the above

43.
Mobi Co, a telecommunications company, sells prepaid cards for mobile phones. The company
registers sales promotion in accordance with the commercial law in the form of selling cards at
reduced prices from April 1, 2020, through April 20, 2020. Accordingly, a prepaid card with
the face value of VND 100,000 (inclusive of VAT) is sold for VND80,000 in the sales
promotion period. Mobi Co sold 2,000 this type of cards
What is the amount of VAT which Mobi Co is require to pay for 2,000 cards sold in the
sales promotion period?
A. VND200 million
B. VND160 million
C. VND145 million
D. VND180 million

44.
Lucky Draw Co, a casino business in Do Son, provides a money exchange service for gambling
cards, which players can exchange for money back at the end of the game.
Figures of October 2020 of Lucky Draw Co showed that:
- Cash amount collected from customers for token exchange at counters before playing
games: VND245 billion.
- Cash amount paid to customers for tokens returned after playing games: VND186 billion.
What is the amount of VAT which Lucky Draw is required to pay in October 2020?
A. VND245 billion
B. VND59 billion
C. VND222.73 billion
 D. VND53.64 billion

45.
Hanoi Tourist Co performs an all-inclusive package tour contract with Singapore. In the
third quarter of 2020, there are 100 tourists for 7 days in Vietnam with a total payment of
USD150,000. The Vietnamese side has to pay for airfares, meals, accommodation, and
sight- seeing tours under the agreed program, of which the airfares from Thailand to Vietnam
and vice versa cost USD35,000. The applicable exchange rate is USD1 = VND23,500.
What is the VAT taxable price of the contract which Hanoi Tourist Co is required to
pay (nearest to VND millions)?
A. VND2,457 millions
B. VND2,702 million
C. VND3,525 million
D. VND3,205 million

46.
An An, a company specialized in producing embroidery thread, has a head office in Quang Nam.
In February 2020, An An has a new investment project in Quang Nam which is at the
investment project and makes separate declaration of input VAT amounts for this project. In
August 2020, the project's input VAT amount is VND600 million, the payable VAT amount
for the company's ongoing production and business activities is VND800 million.
What is the VAT declaration status in the tax period of August 2020?
A. Refund VND600 million and pay VND800 million separately
B. Offset its investment project's input VAT amount of VND600 million against the
payable VAT amount of VND800 million, so company has to pay VND200 million
C. No VAT refund and has to pay VND800 million
D. Pay VND600 million
47.
Binh Minh Co has a head office in Dien Bien. In September 2020, it has a new investment
project in Son La, which is at the investment stage and has neither commenced operation
nor made business and tax registration. The company separately declares input VAT
amounts for this project in Dien Bien in the VAT declaration form for investment project. In
October 2020,
the investment project's input VAT amount is VND600 million; the payable VAT amount
for the company's ongoing production and business activities is VND250 million.
What is the VAT declaration status in the tax period of October 2020?
A. Pay the amount of VND250 million for ongoing business, and the VAT of the
investment project remains until the project is completed and apply for refund for the
whole investment periods.
B. Consider VAT refund for the investment project of VND600 million and pay
VND250 million for ongoing business separately.
C. Consider VAT refund for the investment project of VND350 million after clearing the
input VAT and the VAT payable.
D. Pay the amount of VND250 million VAT for ongoing business and company is not
entitled to VAT refund

48.
Line by Line, a telecom company, which has a head office in Ho Chi Minh City, operates
postpaid telecommunication services in Hanoi and established a subsidiary account branch
in Hanoi to pay VAT by deduction method (the branch is not self-employed and does not
issue invoice). The revenue of this service of the entire company in September 2020 was
VND200 billion including VAT, the revenue in Hanoi was VND88 billion including VAT.
What is the amount of VAT that Line by Line has to declare and pay in September 2020?
A. Declare the VAT taxable revenue of VND181.8 billion, the payable tax of VND18.2
billion and pay them all at the head office
B. Declare the VAT taxable revenue of VND181,8 billion, and the VAT of VND18.2
billion at the head office and pay VND1.6 billion at the Hanoi branch
C. Declare the VAT taxable revenue of VND101,82 billion and the VAT of VND10,18
billion at the head office. Declare and pay the VAT of VND8 billion at Hanoi branch
D. Declare the VAT taxable revenue of VND181,8 billion, and the VAT of VND16.6
billion at the head office and pay VND1.6 billion at the Hanoi branch
49.
AP Co, a joint-stock company purchases materials for the production of animal feed and has
declared and credited input VAT upon such purchase in October 2020 which is VND100
billion. In that month, 65% of the produced animal feed is sold to the market and 35% is used
for animal- rearing activities of the company.
What is the amount of AP's deductible input value added tax (VAT) in October 2020?
A. VND100 billion
B. VND35 billion
C. VND65 billion
D. VND0

50.
Consuly Co and Slush Co are compnies established in Vietnam. In 2020, Consuly Co provides
Slush Co with consultancy, survey and feasibility report making services for an investment
project in China. The contractual value received by Consuly Co is VND15 billion inclusive of
VAT for the services. Under this contract, it is impossible to determine turnover generated in
Vietnam and turnover generated in China. Consuly Co has calculated expenses arising in China
(survey and exploration expenses) of VND7.5 billion and expenses arising in Vietnam
(summarization and reporting expenses) of VND4.5 billion.
What is the amount of VAT-exclusive turnover subject to VAT rate of 10%?
A. VND13,64 billion
B. VND5,63 billion
C. VND6,82 billion
D. VND5,11 billion
 Part E: Valu Added Section
e
Part E: ConstructedTax
Response Question: 15 questions B
1. HOANG HA Co
HOANG HA Co is a company established in Vietnam, whose main activities include the
manufacture and trading of consumer products.
HOANG HA Co had the following transactions during 2020:
(1) HOANG HA Co purchased materials from a supplier in 2019, for which an invoice
with a value added tax (VAT) amount of 2,400 million was issued in January 2020.
The invoice was paid in May 2020 via a bank, but HOANG HA Co forgot to claim
the input VAT.
(2) During 2020, HOANG HA Co purchased a 30-seater bus for transporting its
employees for 1,500 million (exclusive of VAT), and a four-seater car for the general
director costing VND2,500 million (exclusive of VAT).
(3) In January 2020, HOANG HA Co purchased 500 gifts on Tet holiday for a total value
of VND2,950 million (exclusive of VAT) as promotional gifts to clients. The
promotion program was registered with the relevant tax authorities.
(4) HOANG HA Co purchased goods with an invoiced value of VND 18,000 million
(exclusive of VAT). The whole of this inventory was damaged during its
transportation to the company's warehouse due to the heavy storm. The insurer agreed
to compensate HOANG HA Co for the VAT incurred in respect of 30% of the goods.

The standard rate of VAT is applicable to all of HOANG HA Co's VATable sales and purchases.

Required:
(a) Describe the difference between ‘zero rated’ supplies and ‘exempt’ supplies. (3 marks)
(b) 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. (7 marks)
(Total: 10 marks)
2. VSBS Co
VSBS Co (VSBS) is a newly established foreign invested company operating in trading
activities. VSBS is considering launching a number of promotion campaigns for its products
in Vietnam as follows:
— Campaign 1: Offer customers one product for free when the customer buys a pack of
ten during three months.
Campaign 2: Sell products to customers at a reduced price for a week. The reduced price
would be 45% of the normal selling price, which is equal to the cost of the goods sold.
— Campaign 3: Provide customers with a voucher which allows them to buy VSBC
products for free every time the customer buys products with a value in excess of VND2
million.
Campaign 4: Issue some products such as TVs, or HD players, for demonstrative display,
then allow employees (or customers) to purchase these products at a 40% discount after three
months.

Required:
(a) For Campaign 1, advise VSBS Co of the value added tax (VAT) implications (output VAT
and input VAT) and invoicing requirements if:
(i) the campaign is registered with the relevant competent authorities as a promotional activity;
and
(ii) the campaign is not registered. (4 marks)

(b) For Campaign 2 and Campaign 3, advise VSBS Co of the VAT implications (output VAT
and input VAT) and invoicing requirements, if the campaigns have both been registered with
the relevant competent authorities. (4 marks)

(c) For Campaign 4, advise VSBS Co of the output VAT implications and invoicing
requirements if it is registered with the relevant competent authorities. (2 marks)
(Total: 10 marks)
3. REALTIME Co
(a) REALTIME Co is a chain of retail stores operating in Vietnam, which has been
registered for issuing electronic invoices since early 2020.
REALTIME Co expects to receive a tax audit in 2021 and the newly appointed tax manager
has concerns about the invoicing requirements in the following cases:
Case 1: Customer Hoai Anh Company, a regular customer, ussualy buys products exceed
VND200,000 but he refuses to request invoices. Is REALTIME Co required to issue
invoices to Customer Hoai Anh Company?
Case 2: Manay customer from small office near by REALTIME purchases good has a value of
less than VND200,000, so REALTIME Co has no obligation to issue an invoice unless
specifically requested by small office. Is REALTIME Co required to do anything else?
Case 3: REALTIME Co issued an invoice to Customer Cuc Phuong Co. When the invoice was
handed to Customer Cuc Phuong Company, the parties identified that the address of the
customer was also incorrect. Is REALTIME Co required to issue a revised invoice if the tax
code shown on the invoice was correct and not.

Required:
Explain the invoicing requirements for each of the cases 1 to 3 above as the concern from
the tax manager. (5 marks)

(b) Also, in 2020, REALTIME 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 REALTIME Co's tax codes and addresses (with the specific
authorisation issued to REALTIME Co by the legal representative of the branch). The total
VAT amount in respect of these invoices amounted to VND130 million. Invoices for some
of these expenses with VAT amounting to VND20 million were paid by REALTIME Co by
cash but will be reimburse by branch through bank account later on.

Required
Explain the VAT treatment of the payments made on behalf of the branch, for both
REALTIME and its branch, and calculate the amount of the deductible input VAT for
REALTIME Co and/or the branch in respect of the expenses for which invoices were issued
to REALTIME Co. (5 marks)
(Total: 10 marks)
4. NSN Co & BBH Co
(a) NSN Co operates a golf course in Tarn Dao, Vinh Phuc province. The company's
information regarding golf course income for the period ended 31 December 2020 is as
follows:
— Membership fees from players: VND6,000 million
Sales of tickets for golf training ground: VND2,000 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
NSN Co should declare for the period ended 30 December 2020. (3 marks)

(b) BBH Co is the manufacturer of pharmaceutical products. The company's manufacturing

facility and headquarters are located in Hanoi. The company has dependent branches in
various provinces in Vietnam, including Vinh Phuc. The whole group adopts the deduction
method for VAT declaration purposes.
Required:
Briefly describe the invoicing requirements for both BBH Co and the dependent branch in
Vinh Phuc province (i) when BBH Co issues goods to the branch; and (ii) when goods are sold
by the branch. (7 marks)
(Total: 10 marks)
5. ITC Co
The following scenario relates to requirement (a) only.
ITC Co is a Vietnamese company operating in the computer and accessories industry. In 2020,
the company undertook the following transactions:
(i) Purchased 100 laptops, valued at VND30 million each (exclusive of value added tax
(VAT) at 10%).The laptops were issued as follows:
- 50 laptops to staff for business operation purposes;
- 15 laptops to staff as rewards for high performance;
- 35 laptops to clients for promotional purposes, however the company omitted to register
the promotion programme with the relevant authorities; and
(ii) Built a 'creative centre' for staff to encourage them to generate new ideas, at a cost
of VND13,200 million (inclusive of VAT at 10%).
Note: You should assume that all the above expenses are supported by proper documents and
that payments were made via the bank.

The following scenario relates to requirement (b) only.

ELI Co is a Vietnamese company. The company's management is considering applying to
use e-invoices from the fiscal year 2020. The management has raised the following
questions:
(i) What is an e-invoice with the tax authority's identification code (e-invoice with TIC)?
(ii) What are the three types of e-invoices?
(iii) Does ELI Co need to request a VAT e-invoice from the vendor for sales below
VND200,000, since an invoice for this type of sale was not required under previous
VAT invoice regulations?
(iv) Can ELI Co print out e-invoices for its use, instead of storing them on the server,
and if so, for what purposes (if any) would such printed e-invoices be valid?
(v) Provided that ELI Co is a low risk taxpayer, what are the key conditions which need to
be met for the company to use e-invoices without the tax authority's identification code?

Required
(a) Calculate the output VAT or creditable input VAT which ITC Co should declare for
each of the transactions, and briefly explain the reason for the VAT treatment of each one.
(5 marks)
(b) Briefly respond, in accordance with Decree 123/2020, to the queries raised by ELI
Co's management.
Note: You are not required to quote the Article number or Decree wordings in your answer. (5
marks)
(Total: 10 marks)
6. CLE Co
CLE Co is a company incorporated in Vietnam, which operates in the mining of clay for
processing to clinker for exports. In 2020, the company records showed the following costs,
excluding value added tax (VAT) where applicable, with regard to the export of clinker
VND million
Direct material costs (clay) 500,000
Direct labour costs 200,000
Direct overheads of which energy 175,000
costs are 15,000
Selling costs 40,000
General and administration costs

60,000 Interest expenses

75,000
The input VAT incurred by CLE Co in 2020 amounted to VND70,000 million
According to a recent written response to CLE Co, the tax authorities confirmed that the
company's product is to be treated as ‘natural resources which are sourced domestically’.

Required
(a) Briefly explain the value added tax (VAT) treatment of exported natural resources which
are sourced domestically. (5 marks)
Note: You should refer to the tax rate (exempt of zero-rated), the creditability and
refundability of input VAT and the composition of production costs in the determination of
the ‘threshold’ ration between the value of natural resources and the total production costs
(b) Calculate the ratio and the refundable input value added tax (VAT) which CLE Co can
claim for 2020. (5 marks)
Note: Your ratio calculation should indicate by the use of ‘0’ any costs which should be
excluded

(Total = 10 marks)
7. RBP Co
(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 2020:

Project 1: 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).
Project 1: 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 2020 (the first year of
operation):
Project A Project B
VND billion VND billion
Valid input VAT for investment in fixed assets 200 40
(plantation and factory)
Valid input VAT from operating in the first year 20 6
of operations
Revenue from domestic latex sales 40 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. (6 marks)

(b) RBP Co has received the following invoices:

Invoice VAT input Additional information
amount
VND million
1 100 The payment for this invoice went to a bank account
which, due to a mistake, RBP Co had not registered
with the tax authorities at the time of payment.
2 250 Due to a dispute between the parties, this invoice
was not issued until 100 days after the goods had
been delivered to RBP Co.
3 80 This invoice, which was manually written by seller,
contains blank spaces without crossing
4 10 This invoice, which was issued by a supermarket,
contains no 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. (4 marks)
Note: You are recommended to use a table format for the most effective presentation for both
parts (a) and (b) in this question.
(Total: 10 marks)
8. Bach Vi Co, Cam Tu Co and Hung Vuong Co
(a) Bach Vi Co sold a sterilization filter system. The system was delivered and installed to
the buyer on 31 May 2020, but according to the contract, the title of the system would only
be transferred to the buyer upon completion of testing by the buyer and both party signing
on the inspection minute. The inspection was completed on 5 June 2020 and full payment
was made to Bach Vi Co on 16 June 2020.

Required:
State, giving reasons, when for the purposes of value added tax (VAT) Bach Vi Co is
required to issue an invoice for the sale of the filter system. (2 marks)

(b) Cam Tu Co, a Vietnamese company, operates several petrol stations in Hue City.
The petrol stations are also convenience stores where food, drinks and various other
items are sold.

Required:
For the purposes of value added tax (VAT):
(i) State when it is compulsory for Cam Tu Co to issue an invoice to a customer
whose purchases have a value of less than VND200,000. (1 mark)
(ii) Explain the requirements for the issuance of invoices by Cam Tu Co in the case of a
customer whose purchases have value of more than VND200,000 and who does not require
an invoice, for the sale of:
(1) petroleum; and
(2) other items sold by the convenience stores. (3 marks)

(c) Hung Vuong Co (HV) provides internet ADSL services. HV entered into a contract with
Customer Bich Hoa Company in May 2020, under which HV is required to set up a leased
line for Bich Hoa Company, and then provide internet services for a monthly fixed fee of
VND10 million (inclusive of value added tax (VAT)). Under the contract, the service period
for fee calculation is: from the first day to the last day of the month.
HGV collected the set up fee for the leased line of VND15 million from Customer in
advance on 5 May 2020 and then completed the leased line set up on 25 May 2020. Bich
Hoa officially commenced using the line from 26 May 2020.

Required:
(i) State the general value added tax (VAT) regulatory requirements regarding the point
in time when a service provider is required to issue an invoice, and the point in time
when HV Co is required to issue the invoice for the set up fee to Customer A. (2 marks)
(ii) Calculate the total output VAT which HV Co should charge in the VAT invoice(s) issued
to Bich Hoa Company in May 2020 under the above contract. (2 marks)
(Total: 10 marks)
9. Beauty Ltd
Mr Ha, the Tax Manager at Beauty Limited, take a vacation to European in November
2020. He has asked you to complete the company's VAT declaration for the month of
October 2020, as he will be on holiday when the declaration must be filed.

Mr Ha supplies you with a list of transactions for this period and tells you to assume that all
of the amounts include VAT (where applicable) and that the company has obtained
legitimate VAT invoices for all expenditure.

Expenses Income (VND)

(VND)
Sales 91,785,600,000
Purchase of goods for trading 880,000,000
Salaries 178,000,000
Consultant fee 33,000,000
Rent 66,000,000
Repair of equipment 2,200,000
Sale of an old computer in the local market 3,000,000
Provisional personal income tax (PIT) 11,000,000
Purchase of a new computer 45,000,000
Sale of old staff uniforms (exported to Japan) 10,000,000
Telephone and internet 9,500,000
Stationary 2,000,000
Water and pantry 5,100,000
Electricity 6,000,000
Personal gift on Middle of Autum 11,000,000
Interest on loan 12,000,000
Bank charges 355,000

Required:
For each of the transactions listed, state the VAT treatment and calculate the VAT content
and the amount that can be claimed or declared by Beauty Limited together with the overall
VAT payable by Beauty Limited for the month of October 2020.
(Total: 10 marks)
10. Vinamex Ltd
CRDTIV JSC (‘CRDTIV’) is a Vietnamese joint stock company which operates in various
industries and also has invested in a number of 100% owned subsidiaries in various locations.
CRDITV's head office is in a large office building owned by the company in the centre of Hai
Duong Province (not located in an industrial park). All the business activities of CRDTIV are
subject to value added tax (VAT) and all payments are made via a bank.

Transaction (1): CRDTIV recently finished the construction of a canteen and a dormitory for
its employees at one of its factories. The input VAT incurred was VND180 million and
VND500 million for the canteen and dormitory, respectively.

Transaction (2): CRDTIV also constructed a small medical station for its employees in the
area near its head office. The employees, their family and people in the nearby area can all
have a free medical check at the station. The station will have no revenue. The input VAT
costs for the medical station were VND400 million.

Transaction (3): CRDTIV purchased a large quantity of helmets and pens all with the
company's logo to give away to its customers for promotion purposes. The input VAT for
these promotional items was VND80 million.

Transaction (4): According to the capital contribution agreement to set up one of CRDTIV's
subsidiaries, CRDTIV made an advanced payment of VND3,850 million (inclusive of 10%
VAT) to a vendor for the construction of a factory for the subsidiary. The vendor has issued
VAT invoices to CRDTIV for this construction, since the subsidiary was not set up at the time
of payment.

Transaction (5): CRDTIV purchased a fixed asset with a value of VND5,720 million
(inclusive of 10% VAT) and immediately transferred the assets to its subsidiary, CRDT-X, for
the same value. CRDT-X’s activities are not subject to VAT. Since it was an internal
movement of assets, CRDTIV decided to issue an order for internal movement of assets and
did not issue a VAT invoice to CRDT-X.

Transaction (6): CRDTIV purchased materials valued at VND880 million (inclusive of 10%
VAT) for the production of goods to be sold to an international organisation for non-
refundable aid to Vietnam. The international organisation has provided CRDTIV with the
documents regarding their non-refundable aid.
Transaction (7): CRDTIV purchased a four-seater car for its general director for VND1,980
million (inclusive of VAT 10%).

Required:
For each of the transactions (1) to (7) calculate the amount of CRDTIV JSC's creditable or
non-creditable input value added tax (VAT) giving a brief explanation for any items which are
NOT creditable in full.
Note: You should make all calculations to the nearest VND million.
(Total: 10 marks)
11. Hanh Nguyen Ltd
Hanh Nguyen Ltd (Hanh Nguyen) is an enterprise established under the Law on Enterprise in
Vietnam. It provides security services and training to clients in Vietnam and also outside of
Vietnam.
Hanh Nguyen currently has a value added tax (VAT) code and uses the tax credit method to
determine its VAT liabilities. Nguyen had the following transactions during the financial year
ending 31 December 2020:

Date service Date invoice Value Service Provided

provided issued (VND)
1 25 March 2020 2 April 2020 100,000,000 Training course conducted in Vietnam.
2 25 June 2020 30 June 2020 190,000,000 Training course (VND 172,500,000)
and separate course books (VND
17,500,000) conducted in Vietnam
3 30 June 2020 7 July 2020 18,000 Training course conducted in Singapore
SGD for a company that is contemplating
investing in Vietnam for the first time.
The Singaporean company currently
has no legal presence in Vietnam.
4 Every month Last day of 300,000,000 Monthly security service fee revenue
month from a Finland in Vietnam.
5 Every month First day of 90,000,000 Rent expense
month
6 Every month 25'h 200,000,000 Wages to staff
7 10 December 1 December 100,000,000 Development of a new software
2020 2020 program for staff to log and report their
daily activities
All monetary amounts are stated exclusive of any applicable VAT and all invoices referred to
are tax invoices.

Required:
(a) Compute the output VAT payable and input VAT credit available for Nguyen Ltd's June
VAT accounting period, giving brief explanations for the exclusion of any of the items listed.
Note: You are not requested to translate foreign currency into VND (7 marks)
(b) State the conditions and procedures that must be complied with for a credit or refund of
input VAT in relation to the export of goods or services. (3 marks)
(Total: 10 marks)
12. Ronadol Limited
Ronadol Limited (Zingo) is a consumer finance company which has recently started operating
in Vietnam. Ms Mai, Ronadol's Chief Accountant, will go to overseas attending a training
course in November 2020. As she will be at the training course at the time when the
declaration must be filed Ms Lan has asked you to prepare Ronadol's value added tax (VAT)
declaration for the month of November 2020.
Ms My Lan supplies you with the following list of payments and receipts for the month of
November 2020, which is Ronadol's first operating month. She also tells you that all of the
amounts include VAT (where applicable), and that the company has obtained legitimate VAT
invoices for all expenditure.
Expense Income VND
VND
Interest income 15,000,000,000
Other fee income 10,000,000
Sale of old furniture 4,000,000
Purchase of computer equipment 4,500,000,000
Salaries 700,000,000
Mobile phone bill 30,000,000
Rent 190,000,000
Provisional personal income tax 21,000,000
Interest on loan 30,000,000
Bank charges 1,100,000

Required:
Calculate the amount of value added tax (VAT) that Ronadol Limited can claim or must
declare for the month of November 2020
Note: you should list all of the individual items referred to in the question, clearly indicating
the VAT rate applicable or the fact that VAT is not applicable (N/A) in each case.
(Total: 10 marks)
 13. PT Soft JSC
Ms Hoang Lan is the Chief Accountant of PT Soft JSC, a company specialising in the
provision of customised hardware and software solutions for businesses. The following is a
summary of invoices and bills that T-Soft JSC received or issued in the month of June 2020
(sorted by date of receipt/issuance).
Item Date of Date of Issued by Description VND amount Additional
number receipt/ invoice (exclusive of information
issue value added
tax (VAT))
1 1 June 13 April Gia Hung Purchase of ten 150,000,000 Bank transfer/VAT
2020 2020 Co new laptops for invoice
new employees
2 4 June 15 Bach Repair of air- 2,000,000 Cash/Sales invoice
2020 March Khoa Co conditioners
2020
3 7June 7 June PT-Soft Disposal of five 25,000,000 Cash receipt/VAT
2020 2020 JSC used laptops invoice
4 8 June 15 Tran Anh Purchase of file 250,000,000 Bank transfer/VAT
2020 October Co server system invoice
2019
5 9 June 12 Quang Purchase of a 2,000,000,000 Bank transfer/VAT
2020 February Minh Co five-seater invoice
2020 BMW car
6 15 June 15 June PT-Soft Sale of 700,000,000 Bank transfer/VAT
2020 2020 JSC customised invoice
software to
Hong Anh Co
7 15 June 15 June PT-Soft Sale of 200,000,000 Bank transfer/VAT
2020 2020 JSC associated invoice
computer
hardware to
Hong Anh Co
8 19 June 16 June Sunsoft Training 300,000,000 Bank transfer on
2020 2020 Co (a US services (converted 21 June 2020.
company) conducted in from USD) Foreign contractor
Vietnam tax (FCT) declared
on 22 June 2020
9 20 June 20 June PT-Soft Sales of special 3,000,000,000 Bank transfer/VAT
2020 2020 JSC computer invoice
hardware to
CFS Co, an
export
processing
enterprise
10 23 June 15 May Cool-All- Purchase of new 50,000,000 Cash
2020 2020 Day Co air conditioners payment/VAT
invoice
Note: all suppliers and customers referred to are Vietnamese organisations unless stated
otherwise.
Required:
Calculate the amount of output VAT and input VAT applicable to each of items 1 to 10
issued/received by PT-Soft JSC in the month of June 2020.
Note: you should list all of the items by number and for each item state the amount exclusive
of VAT, the applicable VAT rate, output VAT/input VAT and where appropriate, give a short
explanation for the treatment. (Total: 10 marks)
14. Company A
(a) Circular 153/2020/TT-BTC dated 28 September 2020 (Circular 153) provides detailed
guidance on the issuance and usage of invoices.
Required:
State the types of invoices (as stipulated in Circular 153) that the seller is required to issue in
each of the following cases:
Case 1: Company A sold goods to Company B. Both companies are incorporated in Vietnam
and are deduction method taxpayers.
Case 2: Company A provided marketing services for Company C, a Hong Kong Company.
Company C has no permanent establishment or entity presence in Vietnam.
Case 3: Company D sold foreign currency to Company A for making an overseas payment for
imported goods. Company D is licensed for foreign currency trading.
Case 4: Company E, acting as an agent for Company Z, a foreign airline, collected freight
from Company A for international transportation.
Case 5: Company F, the operator of a circus, sold tickets to customers for a show. (5 marks)

(b) Explain, in each of the following cases, the value added tax (VAT) and corporate income
tax (CIT) implications (if any) of the input VAT amount:
(i) A villa that a life insurance company purchased to use as its head office.
(ii) A villa constructed by a construction company to use as a sample for customers'
consideration, which was destroyed by fire before it could be used. The villa was insured for
fire, and the insurance company agreed to pay a compensation amount which covered all of
the costs (including VAT) of constructing the villa.
(iii) A villa that a construction company constructed and then sold to its chief executive officer
(CEO) at a significant discount below its market value as a reward for his excellent past
performance. (5 marks)
(Total: 10 marks)
15. Minh Nhat Co
Minh Nhat Co (Minh Nhat) is a company incorporated and resident in Vietnam. Minh Nhat is
a value added tax registered company specialising in market research services. Its business is
subject to value added tax (VAT) at the standard rate of 10%.
Ms Do Lan Anh, the Tax Accountant of Minh Nhat, requires advice in respect of the
following transactions:
(a) Minh Nhat needs to issue an invoice to a Malaysia company for market research services
on the Vietnam cement industry.
Required:
Advise Lan Anh on the VAT rate that should be applied to the invoice and of any other issues
and/or conditions that she should be aware of when applying such a tax rate. (4 marks)

(b) In February 2020, Minh Nhat purchased office equipment from a local supplier and
received a VAT invoice for VND330 million (including VAT at 10%). According to the
contract, Minh Nhat was required to make payment for the equipment in May 2020. Minh
Nhat declared input tax of VND30 million in its February 2020 VAT return. However, in May
2020 when payment was made, only VND275 million of the VND330 million was paid via a
bank, and the remaining amount of VNDSS million was paid in cash.
Required:
Advise Lan Anh on the conditions for the credit of the input tax on the equipment and the
input tax treatment that should be applied in this case. (4 marks)

(c) Lan Anh had noticed that one purchase VAT invoice issued by the stationery supplier has
been lost when being delivered by post to Minh Nhat's office.
Required:
Advise Lan Anh on the administrative procedures to be followed in order to record the input
tax on such an invoice. (2 marks)
(Total: 10 marks)