Are funeral services subject to VAT in Vietnam?

Are funeral services subject to VAT in Vietnam?

Based on Clause 11, Article 5 of the Law on Value Added Tax 2008, supplemented by Clause 1, Article 3 of the Law Amending and Supplementing a Number of Laws on Taxation 2014, and amended by Clause 1, Article 1 of the Amended Law on Value Added Tax 2013, regulations on non-taxable objects are as follows:

Non-taxable Objects

...

10. Public postal, telecommunications services, and Internet services according to the programs of the Government of Vietnam.

11. Maintenance services for zoos, botanical gardens, parks, street greenery, public lighting, and funeral services.

12. Maintenance, repair, and construction works funded by public contributions and humanitarian aid for cultural, artistic, public serving constructions, infrastructure, and housing for social policy beneficiaries.

13. Educational and vocational training services as prescribed by law.

14. Broadcasting and television services funded by the state budget.

...

Therefore, under the above regulations, funeral services are not subject to Value Added Tax.

Are funeral services subject to VAT in Vietnam? (Image from the Internet)

Which entities is VAT payers in Vietnam?

According to Article 4 of the Law on Value Added Tax 2008, the following persons are specified as liable to pay tax:

The taxpayers liable to Value Added Tax are organizations and individuals engaged in the production, business of goods, and services subject to Value Added Tax (hereinafter referred to as business establishments) and organizations and individuals who import goods subject to Value Added Tax (hereinafter referred to as importers).

How to determine VAT taxable price in Vietnam?

According to Article 7 of the Law on Value Added Tax 2008, amended by Clause 2, Article 1 of the Amended Law on Value Added Tax 2013 and the provision on exchange rates for determining the taxable price abolished by point c, Clause 2, Article 6 of the Law Amending and Supplementing a Number of Laws on Taxation 2014, specific regulations on the taxable price are as follows:

- For goods and services sold by the production and business establishment, the taxable price is the selling price excluding Value Added Tax; for goods and services subject to special consumption tax, the taxable price is the selling price including special consumption tax but excluding Value Added Tax; for goods subject to environmental protection tax, the taxable price is the selling price including environmental protection tax but excluding Value Added Tax; for goods subject to both special consumption tax and environmental protection tax, the taxable price is the selling price including both taxes but excluding Value Added Tax;

- For imported goods, the taxable price is the import price at the border, including import duty (if any), special consumption tax (if any), and environmental protection tax (if any). The import price at the border is determined according to regulations on the taxable price of imports;

- For goods and services used for exchange, internal consumption, or gifts, the VAT taxable price is the price of similar goods and services at the time these activities occur;

- For asset leasing, the taxable price is the rent excluding Value Added Tax.

- In cases where rent is paid periodically or in advance for the lease term, the taxable price is the rent paid periodically or in advance for the lease term excluding Value Added Tax;

In cases of leasing machinery, equipment, or means of transport from foreign countries that cannot be produced domestically for re-leasing, the taxable price is deductible from the rent paid to the foreign country.

- For goods sold in installments or deferred payment, the taxable price is the one-time sale price excluding Value Added Tax, not including interest on installment sales or deferred payments;

- For goods processing, the taxable price is the processing price excluding Value Added Tax;

- For construction and installation activities, the taxable price is the value of the construction, work item, or part of the work handed over excluding Value Added Tax. In cases of construction and installation excluding materials, machinery, and equipment, the taxable price is the construction and installation value excluding the value of materials, machinery, and equipment;

- For real estate business activities, the taxable price is the selling price excluding Value Added Tax, except for the land use right transfer price or land rent that must be paid to the state budget;

- For agency, brokerage activities of purchasing and selling goods and services enjoying commissions, the taxable price is the commission received from these activities excluding Value Added Tax;

- For goods and services using payment vouchers which record the payment price as a price inclusive of Value Added Tax, the taxable price is determined by the following formula:

Tax-exclusive price = Payment price / 1 + VAT rate (%)

- The taxable price for goods and services specified in Clause 1, Article 7 of the Law on Value Added Tax 2008 includes all surcharges and additional fees the business establishment is entitled to.