Circular No. 54/2000/TT-BTC guiding accounting for goods of business establishments selling at subordinate units under dependent accounting in other provinces and cities and selling through agents at fixed prices with commission.

 

CIRCULAR

||| GUIDELINES FOR ACCOUNTING OF GOODS SOLD BY BUSINESS UNITS AT SUBORDINATE AFFILIATED UNITS IN OTHER PROVINCES AND CITIES AND THROUGH AGENTS WITH COMMISSIONS

Pursuant to the Value Added Tax Law; Decree No. 28/1998/NĐ-CP dated May 11, 1998 of the Government detailing the implementation of the Value Added Tax Law; Circular No. 10/2000/TT-BTC dated February 1, 2000 of the Ministry of Finance on guidelines for declaring and paying VAT on goods sold by business units at subordinate affiliated units in other provinces and cities and through agents with commissions, the Ministry of Finance provides the following accounting guidelines:

I. For goods sold by business units at subordinate affiliated units in other provinces and cities where the main office of the production and business unit is located.

A. For goods subject to VAT

1. When a production and business unit dispatches goods to subordinate affiliated units such as branches and stores in other provinces and cities, it must issue an Internal Dispatch and Transportation Note. Based on this note, the accountant determines the cost of goods dispatched to be sold by the subordinate units, recording:

Debit Account 157 - Goods Sent for Sale (Cost)

Credit Accounts 155, 156...

2. When a subordinate affiliated unit receives goods transferred from the company or superior unit for sale, based on the Internal Dispatch and Transportation Note and related documents, the accountant records:

Debit Accounts 155, 156 (Internal Sales Price)

Credit Account 336. Internal Payable.

3. For a subordinate affiliated unit that is a VAT taxpayer under the deduction method, when selling goods transferred from the company or superior unit, it must issue a VAT Invoice for goods sold according to regulations. Based on the VAT Invoice, the accountant reflects sales revenue, recording:

Debit Accounts 111, 112, 131...

Credit Account 511. Sales Revenue (Sales Price Excluding VAT)

Credit Account 3331. VAT Due.

4. The production and business unit (company or superior unit) must issue a VAT Invoice reflecting internal consumption based on the Sales Invoice List provided by the subordinate affiliated unit. Based on the VAT Invoice, the accountant reflects internal sales revenue at the internal sales price excluding VAT, recording:

Debit Accounts 111, 112, 136 (Internal Sales Price Including VAT)

Credit Account 3331. VAT Due

Credit Account 512. Internal Sales Revenue (Internal Sales Price Excluding VAT).

Simultaneously, reflect the cost of goods sold:

Debit Account 632. Cost of Goods Sold

Credit Account 157. Goods Sent for Sale.

5. When a subordinate affiliated unit receives a VAT Invoice for internally consumed goods transferred from the company or superior unit based on the quantity sold, based on the VAT Invoice, the accountant reflects deductible VAT input, recording:

Debit Account 133. Deductible VAT Input

Credit Account 156. Goods (If not yet transferred cost of goods sold)

Credit Account 632. Cost of Goods Sold (If already transferred cost of goods sold)

6. In cases where due to management and accounting requirements, if subordinate affiliated units do not want to use the Internal Dispatch and Transportation Note but directly use the VAT Invoice, when dispatching goods to subordinate affiliated units in different locations, they must issue a VAT Invoice. Based on the VAT Invoice, the accountant reflects sales revenue, recording:

Debit Accounts 111, 112, 136 (Internal Sales Price Including VAT)

Credit Account 3331. VAT Due

Credit Account 512. Internal Sales Revenue (Internal Sales Price Excluding VAT).

When a subordinate affiliated unit receives a VAT Invoice and goods transferred from the company (superior unit) for sale, based on the VAT Invoice and related documents, the accountant reflects the cost of goods received at the internal sales price excluding VAT and deductible VAT input, recording:

Debit Accounts 155, 156 (Internal Sales Price Excluding VAT)

Debit Account 133. Deductible VAT Input

Credit Accounts 111, 112, 336 (Total Internal Payment).

When a subordinate affiliated unit sells goods subject to VAT transferred from the company (superior unit) for sale, it must issue a VAT Invoice for goods sold according to regulations and reflect sales revenue, recording:

Debit Account 111, 112, 131 (Total payment amount)

Credit Account 3331. VAT Due

Credit Account 511. Sales Revenue.

B. For goods subject to Special Consumption Tax and goods exempt from VAT

1. When a production and business unit (company or superior unit) dispatches goods subject to Special Consumption Tax and goods exempt from VAT to subordinate affiliated units in other provinces and cities for sale, it must issue an Internal Dispatch and Transportation Note according to regulations. Based on this note, the accountant calculates and determines the cost of goods dispatched to be sold by the subordinate units, recording:

Debit Account 157. Goods Sent for Sale (Cost)

Credit Account 155. Finished Products.

2. When a subordinate affiliated unit receives products transferred from the company or superior unit for sale, based on the Internal Dispatch and Transportation Note and related documents, the accountant reflects the cost of products and goods received, recording:

Debit Account 155. Finished Products (Internal Sales Price)

Credit Accounts 111, 112, 336.

3. When a subordinate affiliated unit sells products and goods subject to Special Consumption Tax and goods exempt from VAT transferred from the company (superior unit) for sale, it must issue a Sales Invoice. Based on the Sales Invoice, the accountant reflects sales revenue, recording:

Debit Account 111, 112, 131

Credit Account 511. Sales Revenue (Total Payment).

4. The production and business unit (company or superior unit) must issue a Sales Invoice based on the Sales Invoice List provided by the subordinate affiliated unit. Based on the Sales Invoice, the accountant reflects sales revenue, recording:

Debit Accounts 111, 112, 136

Credit Account 512. Internal Sales Revenue (Total Internal Sales Price).

Simultaneously, reflect the cost of goods sold, recording:

Debit Account 632. Cost of Goods Sold

Credit Account 157. Goods Sent for Sale.

5. In cases where due to management and accounting requirements, if subordinate affiliated units do not want to use the Internal Dispatch and Transportation Note but directly use the Sales Invoice, when dispatching products and goods to subordinate affiliated units in different locations, they must issue a Sales Invoice. Based on the Sales Invoice, the accountant reflects sales revenue, recording:

Debit Accounts 111, 112, 136

Credit Account 512. Internal Sales Revenue (Total Internal Sales Price).

When subordinate units under dependent accounting receive products (goods) from the company or superior unit for sale, the accountant shall base on the Sales Invoice and related documents to reflect the cost of goods received into inventory, record:

Debit Account 155. Finished Products (Internal Sales Price)

Credit Accounts 111, 112, 336.

When subordinate units under dependent accounting sell products (goods) given by the company or superior unit for sale, they must issue a Sales Invoice. Based on the Sales Invoice, the accountant reflects revenue, record:

Debit Account 111, 112, 131

Credit Account 511. Sales Revenue (Total Payment).

II. For goods sold through agents at the correct price with commission

1. For production and business establishments (the entity that entrusts the agent) when dispatching goods to sales agents to sell at the correct price with commission (commission agent entity), they must issue a Goods Dispatch Note sent to the sales agent according to the prescribed regulations. Based on the Goods Dispatch Note sent to the sales agent, record:

Debit Account 157. Goods dispatched for sale

Credit Accounts 155, 156, ...

2. For sales agents selling at the correct price with commission:

When dispatching goods for the agent to sell, they must issue a VAT Invoice or Sales Invoice according to the prescribed regulations. Based on the VAT Invoice or Sales Invoice and related documents, the accountant reflects the amount the agent must pay to the principal for the sale, record:

Debit Accounts 111, 112, 131, ...

Credit Account 331. Amount payable to seller (Total payment).

Periodically, the accountant of the entity receiving goods for sale through agents at the correct price with commission determines the commission income from sales through agents and issues a VAT Invoice or Sales Invoice according to the regulations and reflects the commission income from sales through agents, record:

Debit Account 331. Amount payable to seller

Credit Account 511. Sales Revenue.

When paying the proceeds from sales through agents to the principal, record:

Debit Account 331. Amount payable to seller

Credit Accounts 111, 112, ...

3. In cases where the entity dispatches goods to agents who are taxpayers subject to VAT under the deduction method, upon receipt of the Sales Invoice Summary of goods sold through agents that have been consumed, issued by sales agents at the correct price with commission, if the goods sold are subject to VAT, they must issue a VAT Invoice and reflect sales revenue, record:

Debit Account 111, 112, 131 (Total payment amount)

Credit Account 3331. VAT Due

Credit Account 511. Sales Revenue (Sales Price excluding VAT).

Simultaneously, reflect the cost of goods sold:

Debit Account 632. Cost of Goods Sold

Credit Account 157. Goods Sent for Sale.

4. In cases where the entity dispatches goods to agents who are taxpayers subject to VAT under the deduction method, but the goods dispatched for sale through agents are not subject to VAT, upon receipt of the Sales Invoice Summary of goods that have been consumed, issued by sales agents at the correct price with commission, the accountant bases on the Sales Invoice Summary, issues a Sales Invoice and reflects sales revenue, record:

Debit Account 111, 112, 131

Credit Account 511. Sales Revenue.

Simultaneously, reflect the cost of goods sold:

Debit Account 632. Cost of Goods Sold

Credit Account 157. Goods Sent for Sale.

5. Based on documents and invoices regarding the commission payable to the entity receiving goods for sale through agents at the correct price with commission, the accountant records:

Debit Account 641. Selling Expenses

Credit Accounts 131, 111, 112, ...

III. Implementation Provisions

This Circular takes effect from February 16, 2000, concurrently with the effectiveness of Circular No. 10/2000/TT-BTC dated February 1, 2000, of the Ministry of Finance guiding the declaration and payment of VAT on goods sold by businesses at subordinate units under dependent accounting in other provinces and cities and through agents selling at the correct price with commission. All previous provisions contrary to this Circular are abolished. Provisions not covered in this Circular shall be implemented according to current regulations.

During implementation, if there are any difficulties, please report to the Ministry of Finance for study and resolution./.