Official letter 968/CTVLO-TTHT about VAT deduction:
Based on the above provisions and according to the content presented in Official Dispatch No. 326/CV.DCL: In case the Company imports raw materials from foreign suppliers to serve the production and business activities of goods subject to VAT, has paid VAT on the goods at the import stage, the shipment is damaged before arriving at the Company's warehouse, the principle of VAT deduction is implemented as follows:
- In case the input VAT of goods subject to VAT is lost (due to damage or loss of quality) and is not compensated, it can be deducted if it meets the deduction conditions as prescribed in Clause 10, Article 1 of Circular No. 26/2015/TT-BTC. The company must have complete records and documents proving the cases of loss that are not compensated to deduct tax as prescribed in Clause 1, Article 14 of Circular No. 219/2013/TT-BTC.
- In case the goods subject to VAT are lost (due to damage or loss of quality) and are compensated by the supplier or the insurance company, the input VAT of the lost goods subject to VAT will be handled as follows:
+ If the compensation value does not include VAT of the lost VAT-taxable goods, the input VAT of the lost goods shall be fully deducted if it satisfies the provisions in Clause 1, Article 14 of Circular No. 219/2013/TT-BTC and Clause 10, Article 1 of Circular No. 26/2015/TT-BTC.
+ If the compensation value includes VAT of the lost VAT-taxable goods, the input VAT of the lost goods shall be deducted if it satisfies the provisions of Clause 1, Article 14 of Circular No. 219/2013/TT-BTC and Clause 10, Article 1 of Circular No. 26/2015/TT-BTC. Upon receiving compensation, the Company must issue a VAT invoice (the invoice must clearly state the value of the compensated loss excluding VAT and the amount of VAT compensated), the Company shall declare and pay output VAT corresponding to the amount of VAT compensated.
- In case the supplier takes back the damaged goods to destroy and compensate the Company with another batch, this is essentially a form of compensation from the supplier. The Company will base on the actual compensation value incurred to declare and deduct VAT according to the above instructions.
