Taxes and fees for exporting software

Taxes and fees for exporting software

Taxes and fees for exporting software:Taxes and fees which must be paid

I. Taxes and fees for exporting software: Customer demands to export a software aboard with a product is software copyright code. Through a process of checking, Company must pay these two taxes to exporting software:

  • Value added tax with a tax rate of 0%

Legal base: Circular 219/2013/TT-BTC guiding Law on Value Added Tax

Taxes and fees for exporting software: In accordance with Clause 21 Article 4 Circular 219/2013/TT-BTC regulating non-taxable subjects, there is: “Computer software includes software products and software services under the provisions of laws.” Thus, the product which Company trades according that is a non-taxable subject. To the export-software product, Clause 1 Article 9 of such Circular stipulating: “0% tax rate: applied to export products export services; activities of building, deploying projects aboard and in non-tariff zones, international transporting zones; products, services which are not taxable subjects of value added tax when being exported.” Thus, Company will undergo the value added tax with the tax rate is 0%. Company in this case still must to execute the tax enumeration and would be abated value added tax input in the exportation of software because Company has registered to pay tax in method of abatement (Article 14, Circular 219/2013/TT-BTC).

  • Enterprise income tax with a tax rate of 20%

Legal base: Circular 78/2014/TT-BTC guiding the implementation of Decree No. 218/2013/ND-CP of Government regulating and guiding the implementation of Law on enterprise income tax

According to clause 1 Article 11 Circular 78/2014/TT-BTC: “from January 1st, 2016, cases which applied the tax rate of 22% are move to be applied the tax rate of 20%, excluding cases stipulated in clause 2 and clause 3 of this Article and cases which are applied preferential tax rate. The case of exporting software aboard of Company is not fall into cases that would be applied other tax rates so the income from Company’s software exporting activity would be applied the ordinary tax rate of 20%.

Although the activity of Company is software exportation but said activity does not undergo import tax. Specifically, nowadays in Circular 65/2017/TT-BTC promulgating List of Vietnam export and import products, there is not products of internet-via-exported software but the products which could contain such software in code 85.23 of Appendix I this Circular. Clause 1 Article 3 of this Circular also stipulating that List of export and import products is used for: “1. Setting up Tariff Structure applying to export and import products”. Thus, software exported via internet does not fall into subject adjustments of the Structure so does not undergo export tax. Furthermore, in Article 16 Circular 219/2016/TT-BTC guiding Law on Value Added Tax stipulating: “To an unit has the business of exporting software in forms of documents, dossiers, database which are hard packed, to be abated, refunded value-added-tax input, business unit must ensure procedures of Customs Declaration as to ordinary products.

Specifically, these cases do not need Custom Declaration:

Business units which exporting services, software through electronic means do not need customs declarations”.

In short, the software product which Company want to export is not contained in export taxable devices, does not have to execute customs procedures under the adjustment of Law on Customs, so it does not undergo the export tax.

So in case Customer wants to export the software aboard with the product is software copyright code, there are value added tax and enterprise income tax must be paid. 

II. Procedures on enumerating and paying these types of taxes

Currently, Company is enumerating and paying tax on a quarterly basis and applying the abated method so the abatement and payment of these taxes will follow the regulations on quarterly tax payment according to the abated method.

  • To Value added tax:

According to Article 11 of Circular 219/2013/TT-BTC: “An unit which has business activity in many types of products and services with different VAT rates must enumerate VAT according to each tax rate applying for each type of products and services; If the business unit does not determine each tax rate, it must calculates and pays tax at the highest tax rate of products and services that the business unit produces.”. As such, Company must separately account the VAT of exported software products.

1. Submitting dossier

According to point c clause 1 Article 2 Circular 26/2015/TT-BTC guidance on Value Added tax and Law on Tax Administration, Company will must to submit a dossier includes:

  • Value added tax return according to a concomitant form No. 01/GTGT promulgated Circular 26/2015/TT-BTC.

2. Methods of Submission: Directly at tax office, post office or electronic transactions (Article 7 of Circular 156/2013/TT-BTC)

3. Deadline for submission of dossier: No later than the 30th (thirtieth) day of the quarter succeeding the quarter in which tax obligation arises. (Clause 3, Article 10 of Circular 156/2013/TT-BCT guiding a number of articles of the Law on Tax Administration)

4. Place to submit tax dossier: Department of Taxation where the company is headquartered (Clause 2 Article 3 127/2015/TT-BTC issues code to the new enterprise establishment and assigns a tax authority to manage)

5. Tax payment

  • Deadline is the last day of deadline for submitting tax dossier
  • Places: Through commercial banks, other credit institutions and service organizations in accordance with the laws; At the State Treasury; At the tax office managing the tax collection; Through organizations authorized to collect taxes by tax agencies;
  • Form: cash payment or bank transfer or electronic form.
  • To Enterprise income tax:

1. Submitting dossier:

According to Clause 3, Article 16 of Circular 151/2014/TT-BTC guiding the implementation of Decree No. 91/2014/ND-CP, Company will declare Enterprise income tax in the form of annual settlement. The dossier for enterprise income tax audit includes:

  • Enterprise income tax audit return according to form No. 03/TNDN enclosed with this Circular;
  • Annual financial statement;
  • One or several appendices attached to the return, which are promulgated in Circular No. 156/2013/TT-BTC and this Circular (depending on the actual arising of taxpayers).

2. Methods of Submission: Directly at tax office, post office or electronic transactions (Article 7 of Circular 156/2013/TT-BTC)

3. Deadline for submission of dossier: No later than 90th (ninetieth) day from the end of the calendar year or fiscal year. (Clause 3, Article 10 of Circular 156/2013 / TT-BCT)

4. Place to submit tax dossier: Department of Taxation where the company is headquartered (Clause 2 Article 3 127/2015/TT-BTC issues code to the new enterprise establishment and assigns a tax authority to manage)

5. Tax payment

  • Deadline is the last day of deadline for submitting tax dossier
  • Places: Through commercial banks, other credit institutions and service organizations in accordance with the laws; At the State Treasury; At the tax office managing the tax collection; Through organizations authorized to collect taxes by tax agencies;
  • Form: cash payment or bank transfer or electronic form.

For more details, please contact Hnlaw & Partners Law Firm

Hotline: 0912.918.296

Email: tuvan.hnlaw@gmail.com

http://www.hnlaw.vn/en/enterprise-consultancy/

https://en.wikipedia.org/wiki/Software

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