Concerns about new tax collection
Many schools in Quang Binh are expressing concerns about the tax industry's request to pay value-added tax (VAT) for school service fees, especially boarding meals for students.
Recently, a series of kindergartens and primary schools in the province received documents from the tax authority requesting tax payment obligations for the 2024-2025 school year. The content of the document refers to items such as: boarding meals tax rate, hiring cooking staff, hiring security guards, drinking water cost, inspection papers, etc.
In particular, the content related to student meal tax rates is causing many schools confusion. According to instructions from the tax authority, each meal worth VND23,000 will be subject to a VAT of 3%; the hiring of cooking staff is subject to a tax of 5%.
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.
Ms. Huyen informed that the boarding meals were all purchased by the school from food suppliers with full red invoices and have paid VAT. But now each meal has to collect an additional 3% tax.
Similarly, Lam Hoa Kindergarten (Tuyen Hoa district) with a scale of 114 students - also received documents requesting declaration and payment of taxes for student support services. The school's board of directors said that the purchase of raw materials must have valid invoices from the supplier. Therefore, if we apply more direct tax to each meal of students, it is not satisfactory.
According to research, not only a few schools but many other units in the whole province of Quang Binh are in a similar situation. Faced with the pressure of being fined for late payment, some schools are forced to advance money to pay taxes first, then find a way to collect it back from parents - something that many teachers find "very difficult to say" in the context of many difficult family finances.
Currently, the petitions have been sent to higher authorities for consideration, but while waiting for answers, many schools are still confused and worried.
Notice in accordance with regulations
On the morning of May 17, talking to the Lao Dong newspaper, Mr. Doan of the parallel - Deputy Director of the XI Regional Tax Department said that the tax collection at public schools is currently not contrary to the resolution of the People's Council of Quang Binh province. Because the Resolution only specifies the revenue level, and the calculation and payment of taxes are comply with the tax law.
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, invoices vouchers in accordance with the Accounting Law, then the VAT must be paid by the output VAT excluding VAT eligible for deduction conditions and in this case, applying the output VAT rate of 10%, the unit must have adequate and eligible input invoices. 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.
He also said that he will direct tax officials to work directly with schools to provide detailed instructions on how to declare and pay taxes in accordance with regulations - to avoid the situation of misunderstanding and incorrect determination of taxes payable for the same service as at present.
