On May 18, the Office of Quang Binh Provincial People's Committee said that Chairman of the Provincial People's Committee Tran Phong assigned the Tax Department of the XI region to preside and coordinate with relevant departments and branches to check and verify reflections from the press about the situation of collecting student meals at public and public primary schools. At the same time, the tax industry is required to guide schools to comply with regulations, so that the tax payment is twice for the same service.
As reported by Lao Dong Newspaper, many schools in the province have received documents requesting declaration and payment of VAT for expenses such as boarding meals, hiring cooking staff, security guards, drinking water, inspection papers, etc. In particular, each meal worth VND 23,000 is charged an additional 3% VAT, causing many worries.
Ms. Nguyen Thi Huyen - Principal of Nam Ly Primary School No. 1 (Dong Hoi City) said that the school is facing many confusion before the new guidance document.
Mr. Doan Vi Tuyen - Deputy Head of the Tax Department of Region XI said that the current tax collection at public schools is not contrary to the Resolution of the People's Council of Quang Binh province.
According to Mr. Tuyen, the current tax law has two methods of calculating value added tax, deduction methods and direct methods. The deduction method, the unit must account the accounting books and invoice vouchers in accordance with the Accounting Law, then the VAT must be paid by the output VAT excluding the VAT eligible for deduction and this case applies the output VAT rate of 10%, the unit must have adequate input invoices and are eligible for deduction. At that time, the input tax will be deducted and the payable tax is the difference.
Direct method, applied to units that do not fully account according to the provisions of the law on accounting. In this case, the law stipulates a fixed tax rate on total revenue from goods and services, the VAT rate in this case is 1%, 2%, 3%, 5% depending on goods and services, if there is input VAT, it will not be deducted.
Regarding the calculation of tax for boarding meals, Mr. Tuyen explained that if the school applies the deduction method and has full invoices when purchasing raw materials (rice, meat, vegetables, etc.), it will be deducted when determining VAT payable. If the deduction method is not applied but the direct method is applied, the value added tax paid when purchasing raw materials will not be deducted.
Schools can choose one of two methods of tax calculation, depending on how they account for accounting and determine revenue and expenditure, the tax sector always encourages accounting units to have full accounting and documents and apply the tax deduction method, Mr. Tuyen emphasized.
