According to Clause 9, Article 14 of Circular 219/2013/TT-BTC on the principles of VAT deduction:
"9. The amount of input VAT that is not deductible may be accounted for by the business as an expense for calculating corporate income tax or included in the original cost of fixed assets, except for the VAT amount of goods and services buy into each transaction is worth twenty million dong or more. No There is a non-cash payment receipt.."
Clause 3, Article 15 of Circular 219/2013/TT-BTC stipulates the conditions for deducting input VAT:
"a) Documents showing the buyer depositing cash into the seller's account or payment documents in forms not in accordance with current legal regulations are not eligible for VAT deduction or refund for goods and services purchased with a value of twenty million dong or more."
In the case where the Branch is a subsidiary unit, with dependent accounting in a different province from the Parent Company, the regulations regarding accounts receivable management and the responsibilities of the sales department are as follows: "Collect sales proceeds and deposit them immediately into the company's bank account (within the province, or into the bank branch's account (outside the province)) or to the cashier of the selling unit. In special cases, the money must be deposited into the bank after collecting sales proceeds, but no later than 24 hours."
Therefore, the case where a branch purchases goods from the parent company, sells them, and directly deposits cash into the parent company's bank account does not comply with the parent company's internal regulations and does not comply with the regulations on VAT deduction conditions.
Company Branch:
– VAT deductions are not allowed for purchase VAT invoices with a value of 20 million VND or more that lack bank payment documentation.
– The amount of input VAT that is not deductible.
- These expenses cannot be included in the calculation of corporate income tax.
–> If the Company complies with all regulations regarding tax declaration and payment, and the Branch complies with the Company's internal regulations, then the Branch is allowed to declare and deduct input VAT invoices purchased from the Parent Company that do not have supporting documents from a bank.
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Solution:
In accordance with the General Department of Taxation's directive regarding cases where the conditions for deduction are not met, the following applies:
– The Parent Company and the Branch must verify whether the goods transfer actually occurred.
– Has the parent company issued invoices to the branch, declared, and paid output VAT correctly according to regulations?
– The branch handles the sales and deposits the proceeds from these invoices into the parent company's account.
–> If the Branch fully complies with the above regulations, it is entitled to declare and deduct VAT on VAT invoices for goods purchased from the parent company as mentioned above, in accordance with the regulations.
