x Wondering what internal consumption goods mean?
What types of goods are mainly included? x Do you want to know whether you have to issue invoices and declare taxes for internal consumption items?
x Are you interested in the regulations on VAT and corporate income tax for internal consumption goods?
If your business is a manufacturing enterprise, there will be cases where your products are produced to serve your unit's own production and business activities and those products are considered internal consumer goods. . PROSHIP.VN will explain more clearly what the term internal consumption goods is? Which type? What are the regulations on invoice issuance and tax declaration? Join us in reading to get the correct answer about this item.
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What are internal consumables? What type is there? Invoice content?
Concept of internal consumer goods
Internal consumption goods are goods exported from warehouse for consumption by businesses to serve production and business activities or to consume products and goods not to serve production and business activities. In fact, internal consumption goods are understood as goods used for circulation within the business unit such as goods transferred from internal warehouses; Goods exported as materials and semi-finished products continue the production process in a production and business facility of the enterprise; Goods and services exported or supplied by business establishments for use in business activities, etc.
Classification of goods for internal consumption
There are two ways to classify internal consumption goods:
* Classified by purpose of use:
- Internal consumption goods do not serve production and business activities;
- Internal consumer goods serve production and business activities.
* Classified by method of use:
- Internal circulation: Is the use of goods, services, finished products (or semi-finished products) as input materials for the next finished product production process;
- Internal consumption: The use of goods, services, finished products (or semi-finished products) internally is the consumption stage.
Content of internal consumption invoice
According to Clause 1, Article 4 of Decree 123/2020, internal consumer invoices need to have all the required content like regular invoices. Specifically:
- Invoice name, invoice symbol, invoice number symbol;
- Some bills;
- Name, address, code of seller;
- Name, address, code of buyer;
- Name, unit of calculation, quantity, unit price: amount without VAT, VAT rate, total VAT amount according to each type of tax rate, total VAT amount, total payment amount with VAT;
- Name, unit, quantity, unit price;
- Signature of seller and buyer.
* Note: Enterprises account for internal consumption according to the provisions of Circular 133 and Circular 200 as follows:
LATEST UPDATE PICTURES OF CONTAINER PROSHIP LOGISTICS TRACTOR
- Debit Account 154, 211, 241, 242, 641, 642,...depending on each department and purpose of use;
- Account 155, 156,...: Product production costs or cost of goods.
>>See more: 9 groups of dangerous goods in transportation
Is it necessary to declare taxes and issue invoices for internal consumption goods?
Do internal consumption goods have to declare tax?
Depending on the purpose of use of the goods, if they serve production or business, they do not have to declare or calculate value-added tax and vice versa. According to Clause 2, Article 3, Circular No. 119/2014/TT-BTC amending and supplementing Clause 4, Article 7, Circular No. 219/2013/TT-BTC stipulates as follows:
4. Taxable prices for products, goods and services for internal consumption.
Internally circulated goods such as goods exported for internal warehouse transfer, export of materials, semi-finished products, to continue the production process in a production or business establishment or goods and services provided by the establishment. Export or supply business used to serve business activities is not required to calculate and pay VAT.
[…]
Depending on the purpose of using the goods, it determines whether the internal consumption goods are subject to tax or not, specifically:
- In the case of internal consumption not serving production and business, enterprises must declare and calculate VAT according to the value-added tax price of goods and services of the same or equivalent type at the time of consumption. internal.
- In the case of internal consumption serving production and business, businesses do not have to declare and calculate VAT.
Do internal consumables require invoices?
Goods and services for internal consumption must still be issued with Internal Consumption Invoices, except in cases where the goods are circulated internally to continue the enterprise's production process. In there:
Internally consumed goods are goods produced by the Company that are used for internal activities that may or may not serve production and business. Internally circulated goods are understood as goods exported for internal warehouse transfer, materials, semi-finished products, to continue the production process in a production, business/goods or service facility. Used by export/supply business establishments to serve business activities.
Pursuant to Clause 1, Article 4 of Decree No. 123/2020/ND-CP stipulates as follows:
1. When selling goods or providing services, the seller must issue an invoice to deliver to the buyer (including cases of goods and services used for promotion, advertising, sample goods, goods and services). services used to give, donate, exchange, pay on behalf of employees and for internal consumption (except for goods circulated internally to continue the production process); exporting goods in the form of loans , loan or return of goods) and must fully record the content as prescribed in Article 10 of this Decree. In case of using electronic invoices, it must follow the tax authority's standard data format as prescribed in Article 12 of this Decree.
=> In short, except for goods and services circulated internally, invoices are not required, but other cases of internal consumption must be invoiced.
* Note: Particularly for the transportation, aviation, railway, post and telecommunications industries, business establishments MUST HAVE documents regulating the subjects and levels of control over goods and services for internal use according to their authority. regulatory rights.
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Regulations on VAT and corporate income tax for internal consumption goods
For VAT
Circular 119/2014/TT-BTC dated August 25, 2014 of the Ministry of Finance stipulates:
“Article 3. Amending and supplementing Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance guiding the implementation of the Law on Value Added Tax and Decree No. 209/2013/ND-CP dated December 18, 2013 of the Government detailing and guiding the implementation of a number of articles of the Law on Value Added Tax as follows:
2. Amend and supplement Clause 4, Article 7 of Circular No. 219/2013/TT-BTC as follows:
“4. Taxable prices for products, goods and services for internal consumption.
Internally circulated goods such as goods exported for internal warehouse transfer, export of materials, semi-finished products, to continue the production process in a production or business establishment or goods and services provided by the establishment. Export or supply business used to serve business activities is not required to calculate and pay VAT.
Examples of internal consumer goods used for production and business purposes:
- Example 1: Garment manufacturing facility B has a yarn workshop and a sewing workshop. Facility B exports finished yarn from the yarn workshop to the garment factory to continue the production process. Facility B does not have to calculate and pay VAT on the yarn exported to the garment workshop.
- Example 2: Unit A is an electric fan manufacturing enterprise, using 50 fan products installed in its production workshops to serve its business activities. Unit A does not have to calculate and pay VAT on its activities. Producing 50 electric fan products.
Examples of internal consumer goods used not for production and business purposes:
Company Y is a bottled water production enterprise, the price without VAT of 1 bottle of bottled water on the market is 4,000 VND. Company Y exports 300 bottles of bottled water for the purpose of not serving production and business (giving to employees), then Company Y must declare and calculate VAT on 300 bottles of water exported for non-business use. production and business mentioned above with a taxable price of 4,000 x 300 = 1,200,000 VND.
According to this regulation:
- Internal consumption goods used for production and business purposes do not have to calculate and pay VAT;
- Internally consumed goods used for the purpose of internal circulation to serve production and business do not have to calculate and pay VAT;
- Internal consumption goods used not for production or business must be calculated and paid VAT.
For corporate income tax
Circular 119/2014/TT-BTC dated August 25, 2014 of the Ministry of Finance stipulates:
“Article 6. Amending and supplementing Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance guiding the implementation of Decree No. 218/2013/ND-CP dated December 26, 2013 of The Government regulates and guides the implementation of the Corporate Income Tax Law as follows:
1. Amend and supplement point b, clause 3, Article 5 of Circular No. 78/2014/TT-BTC as follows:
“b) For goods and services used for exchange (excluding goods and services used to continue the enterprise's production and business process), it is determined according to the selling price of the product or goods. Goods and services of the same or equivalent type on the market at the time of exchange.
For example: Enterprise A has the function of producing auto parts and assembling cars. Enterprise A uses automobile tire products produced by the enterprise to display and introduce products or uses automobile tires to continue assembling into complete cars, in this case the enterprise's automobile tire products are not subject to regulation. converted to be included in revenue for corporate income tax purposes.
For example: Enterprise B is a computer manufacturing enterprise. During the year, enterprise B exports a number of computers manufactured by the enterprise to its employees for use at the enterprise. These computer products do not have to be converted into revenue for income tax purposes. enterprise".
=> Thus, internal consumption goods used for the purpose of serving production and business (internal to the enterprise) will NOT be COUNTED in revenue for calculating Corporate Income Tax.
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the concept of the term internal consumables , whether it is necessary to issue invoices and declare taxes or not has been answered. Along with that, Proship also points out regulations related to VAT and Corporate Income Tax for internal consumption goods, this is important knowledge to support each unit in the production and business process. . Please continue to follow and update news stories about secondary goods, value-added invoices, sales invoices, VAT invoices, etc. Contact now 0909 344 247 to be provided with multimodal transport services. Cheap formula and answers to all related questions.
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Ms Tien: 0909 986 247
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