Quang Binh Student Meals: Tax Authorities Clarify "Double Taxation" Concerns

Quang Binh is currently grappling with a contentious issue: public schools being required to pay Value Added Tax (VAT) on student semi-boarding meals. Many schools are calling this “double taxation,” leading to widespread confusion and concerns about increased costs for parents. What’s the true story behind this, and how are the tax authorities explaining it?

The “Confusing” Reality At Quang Binh Schools

Recently, numerous preschools and primary schools in Quang Binh received official requests to declare and pay VAT for various services, including student semi-boarding meals, cooking staff salaries, security services, and drinking water, for the 2024-2025 school year. This has left principals and school boards perplexed.

Ms. Nguyen Thi Huyen, Principal of Nam Ly No. 1 Primary School (Dong Hoi City), expressed her bewilderment: “We already purchase food with full invoices. Now, having to pay an additional 3% for each meal is very difficult to understand. Our school has over 500 semi-boarding students, and each student will have to pay an extra 85,000 VND just for meal-related taxes, which is truly unusual.”

Similarly, the Board of Directors at Lam Hoa Commune Preschool (Tuyen Hoa District) confirmed that all ingredients are sourced with proper invoices, making the additional tax on each meal illogical. This situation isn’t isolated to a few schools; it’s widespread across the province. Many schools are forced to temporarily use budget funds to pay the tax, then consider collecting it from parents – a “difficult conversation,” especially given the current economic challenges.

What The Tax Authorities Say About Vat Collection On Semi-Boarding Meals

On May 18, the Regional Tax Department XI officially addressed the issue. Mr. Doan Vi Tuyen, Deputy Head of the Regional Tax Department XI, affirmed that the collection of VAT from public schools in Quang Binh is in accordance with legal regulations and does not contradict the resolution issued by the Provincial People’s Council.

Mr. Tuyen explained that the current Tax Law allows for two methods of VAT calculation:

• Deduction Method: Applicable to entities that maintain complete accounting records and invoices as regulated. In this case, input VAT can be deducted, reducing the amount of tax payable.
• Direct Method: Applicable to entities that do not meet the conditions for accounting. The tax is calculated directly on total revenue with tax rates ranging from 1% to 5%, and input VAT cannot be deducted.

According to the guidance, each meal valued at 23,000 VND will be subject to a 3% VAT if the direct method is applied, while the cost of hiring a cook is taxed at 5%.

Solutions And Recommendations From Tax Authorities

To safeguard the schools’ interests, Mr. Tuyen encouraged them to apply the deduction method. He also stated that the Tax Department would send officials to provide detailed on-site guidance on how to declare and pay taxes correctly, aiming to avoid misunderstandings and errors.

Despite the tax authorities’ explanation, many schools remain concerned about potential penalties for incorrect or late tax declarations while awaiting specific instructions.