Do businesses that grow their own agricultural products and package them themselves pay a value-added tax rate of 5% or 10%?

1. How does the law regulate the concept of value-added tax?

According to the provisions of Article 2 of the Law on Value-Added Tax 2008, the specific concept of value-added tax is specified as follows:

Article 2. Value-added tax

Value-added tax is a tax calculated on the added value of goods, services arising in the process from production, circulation to consumption.

2. Who needs to pay value-added tax?

Article 3 of Circular 219/2013/TT-BTC regulates value-added tax payers specifically:

Value-added tax payers are organizations and individuals that produce and trade goods and services subject to VAT in Vietnam, regardless of industry, form, or organization. Businesses (hereinafter referred to as business establishments) and organizations and individuals importing goods and purchasing services from foreign countries subject to value-added tax (hereinafter referred to as importers) include:

1. Business organizations are established and registered under the Enterprise Law, State Enterprise Law (now the Enterprise Law), Cooperative Law and other specialized business laws;

2. Economic organizations of political organizations, socio-political organizations, social organizations, socio-professional organizations, people’s armed units, public service organizations and other organizations;

3. Enterprises with foreign investment and foreign parties participating in business cooperation under the Law on Foreign Investment in Vietnam (now the Law on Investment); foreign organizations and individuals doing business in Vietnam but not establishing legal entities in Vietnam;

4. Individuals, households, independent business groups and other entities engaged in production, business and import activities;

5. Organizations and individuals doing business in Vietnam and purchasing services (including the purchase of services attached to goods) from foreign organizations that do not have permanent establishments in Vietnam, and individuals abroad who are non-residents in Vietnam, then the organizations and individuals purchasing the services are taxpayers, except in cases where they do not have to declare and calculate VAT as guided in Clause 2, Article 5 of this Circular.

Regulations on permanent establishments and Non-residents comply with the law on corporate income tax and the law on personal income tax.

6. Branches of export processing enterprises are established to purchase and sell goods and activities directly related to buying and selling goods in Vietnam according to the provisions of law on industrial parks, export processing zones and economic zones.

3. Enterprises that grow their own agricultural products and package them themselves are subject to a value-added tax rate of 5% or 10%?

According to the provisions of Clause 1, Article 4 of Circular 219/2013/TT-BTC and Clause 1, Article 1 of Circular 26/2015/TT-BTC, which regulates subjects not subject to tax, enterprises that grow agricultural products and then package themselves are subject to tax. The specific value-added tax rate is as follows:

“Article 4. Subjects not subject to VAT

1. Cultivation products (including planted forest products), livestock, aquaculture, aquaculture, fishing that have not been processed into other products or have only undergone normal preliminary processing by organizations and individuals who produce and fish for sale and at the import stage. Export.

Newly processed products are usually newly cleaned, sun-dried, dried, peeled, ground, peeled, peeled, deseeded, stemmed, cut, salted, refrigerated (chilled, frozen), preserved with sulfuro gas, preserved by chemical methods to avoid rotting, soaked in sulfur solution or soaked in other preservative solutions and other common forms of preservation. other.

Example 2: Company A signs a contract to raise pigs with Company B in the form that Company B delivers to Company A breeds, feed, veterinary medicine, Company A delivers and sells pig products to Company B, then the pig raising wages received from Company B and the pig products that Company A delivers and sells to Company B are not subject to VAT.