According to the new Law on VAT, which goods and services are not eligible for the 0% tax rate in Vietnam?

According to the new Law on VAT, which goods and services are not eligible for the 0% tax rate in Vietnam?

Based on the provisions of point d, clause 1, Article 9 of the Law on Value-Added Tax 2024 (effective from July 1, 2025) regarding the 0% VAT rate as follows:

Tax Rate

1. The 0% tax rate is applied to the following goods and services:

...

d) Cases where the 0% tax rate is not applied include: transfer of technology, transfer of intellectual property rights abroad; reinsurance services abroad; credit granting services; capital transfer; derivative products; postal and telecommunications services; export products specified in clause 23, Article 5 of this Law; tobacco, alcohol, beer imported for export; gasoline, oil purchased domestically and sold to businesses in non-tariff zones; automobiles sold to organizations and individuals in non-tariff zones.

...

Thus, from July 1, 2025, cases not eligible for the 0% VAT rate include:

- Transfer of technology, transfer of intellectual property rights abroad;

- Reinsurance services abroad;

- Credit granting services;

- Capital transfer;

- Derivative products;

- Postal and telecommunications services;

- Export products that are unprocessed, or processed into different products natural resources and minerals as specified by the Government of Vietnam in line with state policy on discouraging and restricting the export of raw natural resources and minerals.

- Tobacco, alcohol, beer imported for export;

- Gasoline, oil purchased domestically and sold to businesses in non-tariff zones;

- Automobiles sold to organizations and individuals in non-tariff zones.

What goods and services are not eligible for the 0% tax rate in Vietnam under the new Law on VAT? (Image from the Internet)

Which goods and services are eligible for the 0% tax rate in Vietnam according to the new Law on VAT?

Goods and services eligible for the 0% VAT rate are specified in clause 1, Article 9 of the Law on Value-Added Tax 2024 (effective from July 1, 2025) as follows:

(1) Export goods include:

+ Goods from Vietnam sold to organizations and individuals abroad and consumed outside Vietnam;

+ Goods from domestic Vietnam sold to organizations in non-tariff zones and consumed in non-tariff zones for direct service to export production activities;

+ Goods sold in isolation areas to individuals (foreigners or Vietnamese) who have completed exit procedures;

+ Goods sold at duty-free shops;

(2) Export services include:

+ Services provided directly to organizations and individuals abroad and consumed outside Vietnam;

+ Services provided directly to organizations in non-tariff zones and consumed in non-tariff zones for direct service to export production activities;

(3) Other exported goods and services include:

+ International transportation;

+ Rental services for transportation vehicles used outside the territory of Vietnam;

+ Aviation and maritime services provided directly or through agents for international transportation;

+ Construction and installation activities abroad or in non-tariff zones;

+ Digital content products provided to foreign parties with documentation proving consumption outside Vietnam as stipulated by the Government of Vietnam;

+ Parts and materials for the repair and maintenance of vehicles, machinery, equipment for foreign parties and consumed outside Vietnam;

+ Forwarded processing goods for export according to legal regulations;

+ Goods and services exempt from VAT when exported;

When is the time of determining VAT in Vietnam from July 1, 2025?

The time of determining VAT is stipulated in Article 9 of the Law on Value-Added Tax 2024 (effective from July 1, 2025) as follows:

(1) The time of determining VAT is stipulated as follows:

- For goods, it is the time of transfer of ownership or right to use the goods to the buyer or the time of issuing the invoice, regardless of whether money has been received;

- For services, it is the time of completion of service provision or the time of issuing the service invoice, regardless of whether money has been received.

(2) The time of determining VAT for the following goods and services is determined by the Government of Vietnam:

- Export goods, import goods;

- Telecommunications services;

- Insurance business services;

- Electricity supply activities, electricity production, clean water;

- Real estate business activities;

- Construction and installation activities, and oil and gas activities.