1. Input VAT

Are raw cashew nuts subject to VAT exemption?

According to Article 1, Clause 1 of Circular No. 26/2015/TT-BTC, issued by the Ministry of Finance on February 27, 2015, the VAT exemption applies to agricultural products, including raw cashew nuts:

“Products from farming (including forest-grown products), livestock, aquaculture, and fishing that have not been processed into other products or have only undergone preliminary processing, when sold domestically or imported, are not subject to VAT.”

Preliminary processing includes cleaning, drying, shelling, etc. Therefore, if a business imports raw cashew nuts that have only undergone simple processes like cleaning or drying, these products fall under the VAT-exempt category. This helps businesses reduce costs and enhance competitiveness by not having to pay VAT at the import stage.

2. Output VAT

According to Clause 5, Article 5 of Circular No. 219/2013/TT-BTC, issued by the Ministry of Finance on December 31, 2013, cases where VAT declaration is not required are defined as:

“Businesses and cooperatives that pay VAT using the credit method and sell unprocessed or preliminarily processed agricultural, livestock, and aquaculture products to other businesses or cooperatives are not required to declare or pay VAT.”

Thus, when a business imports raw cashew nuts and sells them to other enterprises or cooperatives in Vietnam, they do not need to declare or pay output VAT. This makes it easier for businesses to operate and reduces management costs. However, if the raw cashew nuts are sold to individual households or business entities, VAT must be declared at a rate of 5%.

3. Full Deduction of Input VAT

According to Clause 11, Article 14 of Circular No. 219/2013/TT-BTC, businesses can fully deduct input VAT for goods and services used in non-VAT taxable activities:

“Input VAT for goods and services used for activities that are not subject to VAT declaration and payment can be fully deducted.”

As such, a company can claim a full deduction of input VAT for invoices related to the purchase of goods and services used for VAT-exempt activities, provided they meet the conditions specified in Circular No. 26/2015/TT-BTC and Circular No. 173/2016/TT-BTC. Utilizing this tax policy helps businesses optimize cash flow and improve financial efficiency.

This content provides essential insights into the tax policies for businesses dealing with raw cashew nut imports and sales. To succeed in this sector, it is crucial to grasp the relevant tax regulations. Contact TPM Tax Agency today for expert advice and comprehensive support to ensure your business complies with the law and maximizes profitability.

Hotline: 028 3505 1800 or email: htdn@tpm.com.vn

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