Guidance on recording taxable revenue for Export Activities

Learn: What is exporting goods? When to record export revenue? Documents & how to record taxable revenue from export activities. There are specific examples

I. What is export?

Export is a form of business buying and selling, exchanging goods between countries (outside Vietnam territory) including: 

• Direct export: is a form of exchange of goods and services between buyers and sellers without going through an intermediary;
• Export entrustment: is a form of hiring a business unit specializing in import and export to carry out import and export activities on behalf of the buyer or seller;
• On-site export: is a form in which Vietnamese enterprises sell to foreign traders, then the goods will be delivered to other enterprises in Vietnam as designated by the foreign trader;
• Temporary import and re-export: is a form of importing goods into Vietnam for a short period of time, after which the goods will be exported to another country or to the original exporting country.

II. Documents used for tax declaration for export activities

According to Clause 5, Article 43 of the Law on Tax Administration No. 38/2019/QH14 dated June 13, 2019, for exported goods, customs dossiers as prescribed by the Customs Law are used as tax declaration dossiers.
Clause 8, Article 4 of the Customs Law No. 54/2014/QH13 dated June 23, 2014, customs dossiers include customs declarations and documents that must be submitted or presented to customs authorities.
➨ Thus, a complete set of documents for tax declaration dossiers for export activities includes:

1. Value added tax invoice/sales invoice;
2. Customs declaration and clearance confirmation;
3. Economic contract;
4. Commercial invoice;
5. Packing list;
6. Non-cash payment voucher;
7. Some other documents attached to the Customs Law.

Note:

• Lack of the above documents will affect the declaration of tax records and the application of the 0% VAT rate;
• If all other documents are sufficient but non-cash payment documents are missing, the enterprise will not be able to deduct input VAT;
• If there is no customs declaration as prescribed but there is a non-cash payment document, the enterprise’s export goods will be considered as domestically consumed goods;
• Particularly for on-site export goods and transit processed goods, if one of the required procedures and documents is not available, VAT must be calculated and paid as for domestically consumed goods and input VAT can be deducted.

III. Time to issue export invoice

According to the provisions of Point c, Clause 3, Article 13 of Decree 123/2020/ND-CP dated October 19, 2020, when exporting goods to the place of export procedures, enterprises use the internal delivery and transport note as prescribed as a document for circulation on the market. After completing the procedures for customs clearance of goods, enterprises issue value-added invoices for exported goods for enterprises declaring and calculating tax according to the deduction method.

➨ Conclusion: The time to issue an export invoice is after completing the export declaration procedure with the customs authority.
>> See more: How to issue an export invoice according to Decree 123.

IV. Time of recording export revenue

According to Clause 7, Article 3 of Circular 119/2014/TT-BTC, the date to determine export revenue for tax calculation is the date of confirmation of completion of customs procedures on the customs declaration.

V. Instructions for recording export revenue

Refer to the following example to understand how to record export revenue.
For example:
Enterprise A operates in the field of plastic production for export to foreign markets, the enterprise declares and calculates tax according to the deduction method.

• On January 5, 2023, goods were shipped to the port awaiting export, ex-warehouse price 5,000,000 VND;
• On January 6, 2023, after completing customs procedures and export declarations (customs clearance), the goods were delivered to the ship. The enterprise issued VAT invoice form No. 1, code C22TTT, dated January 6, 2023, knowing the pre-tax selling price of 1,000 USD. Customer B has not paid, export tax of 500,000 VND, related costs (loading, unloading, transportation…) paid in cash is 600,000 VND;
• On January 20, 2023, enterprise A received a credit note from Vietcombank regarding the amount paid by customer B of 990 USD with the following content: Record an increase in the enterprise’s USD bank deposit account of 990 USD, bank fee of 10 USD.

Know that:

• Actual exchange rate of Vietcombank on January 6, 2023 when delivering goods to ship for export is as follows: Buying rate: 23,310 VND/USD – Selling rate: 23,630 VND/USD;
• Actual exchange rate of Vietcombank on January 20, 2023 when customers pay is as follows: Buying rate: 23,280 VND/USD – Selling rate: 23,620 VND/USD.

➨ Accounting entries are as follows:

• On January 5, 2023, goods were shipped for sale:
     Debit account 157: 5,000,000;
     Credit account 156: 5,000,000.
• January 6, 2023, delivery of goods to ship:
     ➢ Revenue recognition: (recorded at the purchase exchange rate on January 6, 2023):
     Debit account 131: 23,310,000 (1,000 USD x 23,310 VND/USD);
     Credit account 511 (5111): 23,310,000 (1,000 USD x 23,310 VND/USD).
     ➢ Cost of goods sold:
     Debit account 632: 5,000,000;
     Credit account 157: 5,000,000.
• Related expenses:
     Debit account 641: 600,000;
     Credit account 111 (1111): 600,000.
• Export tax:
     Debit account 511 (5111): 500,000;
     Credit account 333 (3333): 500,000.
• Upon receipt of the credit note: (recorded at the purchase rate on January 20, 2023, the difference with the recorded exchange rate on January 6, 2023 will be recorded in account 515 (Profit) or account 635 (Loss)):
     Debit account 635: 29,700 [990USD x (23,310 – 23,280)];
     Debit account 112 (1122): 23,047,200 (990USD x 23,280 VND/USD);
     Credit account 131: 23,076,900 (990USD x 23,310 VND/USD).
• Bank fees: (recorded at the selling rate on January 20, 2023):
     Debit account 641/642: 236,200 (10USD x 23,620 VND/USD);
     Credit account 131: 233,100 (10USD x 23,310 VND/USD);
    Credit account 515: 3,100 [10USD x (23,620 – 23,310)].
• When transacting in foreign currency, an exchange rate difference will arise. When receiving payment, if:
     ➢ The actual transaction exchange rate is greater than the recorded exchange rate. The enterprise records profit in account 515 (Financial activity revenue);
     ➢ The actual transaction exchange rate is less than the recorded exchange rate. The enterprise records loss in account 635 (Financial activity expenses).

>> See more: Accounting methods, formulas and ways to calculate export tax.

VI. Frequently asked questions when recording export revenue