TTO – The Ministry of Finance said in the draft Law amending and supplementing a number of articles of the 6 Tax Laws, fertilizers will be converted to VAT subject to 5% preferential tax rate.
This is the opinion that the Ministry of Finance gives in replying to the voters’ opinion on the value added tax (VAT) on fertilizers to remove difficulties for domestic fertilizer production enterprises as proposed in advance. There (“Unsuccessful business, State losses”, Tuoi Tre on June 2).
Under this plan, fertilizer producers will be deducted input VAT. Because the output VAT is calculated at the rate of 5% while machinery, equipment, raw materials, electricity … serving the production of fertilizers are subject to VAT at the rate of 10%, so these businesses can basically VAT refund.
According to the Ministry of Finance, the imposition of VAT at 0% as a number of proposals is not consistent with international practices and the provisions of the Law on Value Added Tax.
According to the Law on Value Added Tax (there are 3 tax rates of 0%, 5% and 10%), the 0% tax rate applies to goods and services exported according to international practice.
The tax rate of 5% applies to goods and services essential to livelihoods and goods and services that are inputs used for agricultural production. The tax rate of 10% applies to other ordinary goods and services.
Lê Thanh