Are imports that are specialized electronic equipment subject to value-added tax in Vietnam?

Are imports that are specialized electronic equipment subject to value-added tax in Vietnam?

Based on Article 2 of Circular 219/2013/TT-BTC, which stipulates the subjects subject to value-added tax as follows:

Subjects subject to tax

Subjects to value-added tax (VAT) are goods and services used for production, business, and consumption in Vietnam (including goods and services purchased from organizations and individuals abroad), except for those not subject to VAT as guided in Article 4 of this Circular.

Simultaneously, according to the provisions of Article 4 of Circular 219/2013/TT-BTC, which regulates the cases in which imports are not subject to VAT.

Thus, imports that are specialized electronic equipment may be subject to value-added tax unless they fall into the following cases:

- Specialized electronic equipment that is humanitarian aid, non-refundable aid, and must be confirmed by the Ministry of Finance or the Department of Finance.

- Specialized electronic equipment that is gifts for state agencies, political organizations, socio-political organizations, socio-political-professional organizations, social organizations, socio-professional organizations, and people's armed units, following the law on gifts.

- Specialized electronic equipment that is gifts for individuals in Vietnam, following the law on gifts.

- Specialized electronic equipment that is personal belongings of foreign organizations and individuals exempt from diplomatic privileges under the law on diplomatic privilege exemptions.

- Specialized electronic equipment that is the personal belongings of Vietnamese residing abroad when returning to the country.

- Specialized electronic equipment carried by individuals within the duty-free luggage standards;

- Specialized electronic equipment sold to foreign organizations or individuals, international organizations for humanitarian aid, and non-refundable aid to Vietnam.

- Specialized electronic equipment that is temporarily imported for re-export; temporarily exported for re-import.

Are imports that are specialized electronic equipment subject to value-added tax in Vietnam? (Image from the Internet)

What is the tax rate for imports that are specialized electronic equipment in Vietnam?

Based on Official Dispatch 4262/TCHQ-TXNK in 2023 of the General Department of Customs guiding VAT on imported specialized electronic equipment with the following contents:

According to the provisions in Clause 15, Article 3 of Decree 71/2007/ND-CP, amended by Clause 7, Article 147 of Decree 96/2023/ND-CP as follows:

Terminology explanation

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Specialized electronic equipment is electronic equipment used in specific fields. Specialized electronic equipment includes measuring devices, automation, medical, biological equipment, and other industries.

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Based on the provisions in Appendix 02, the List of Software and Hardware, Electronic Products issued with Circular 09/2013/TT-BTTTT.

In Appendix III of Decree 72/2024/ND-CP - Other Information Technology Goods according to IT laws that regulate Section IV - Group of specialized electronic equipment products.

Based on the regulation at Point c, Clause 1, Article 1 of Decree 72/2024/ND-CP it is stipulated as follows:

Reduction of value-added tax

1. Reduce value-added tax for groups of goods and services applying a tax rate of 10%, excluding the following groups of goods and services:

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c) Information technology according to information technology law. Details in Appendix III issued with this Decree.

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Based on the provisions of Decree 72/2024/ND-CP and Appendix III of Decree 72/2024/ND-CP above, if imports are determined to be specialized electronic equipment, they belong to Section IV Part B Appendix III issued with Decree 72/2024/ND-CP and apply a VAT of 10%.

Thus, according to the above legal grounds and guidance in Official Dispatch 4262/TCHQ-TXNK, imports that are specialized electronic equipment will apply a value-added tax rate of 10%.

What is the value-added tax calculation price for imports in Vietnam?

Based on Clause 2, Article 7 of Circular 219/2013/TT-BTC, the calculation price for value-added tax on imports is determined by the following formula:

Tax calculation price for imports = Price at the border gate + Import tax (if any) + Special consumption tax (if any) + Environmental protection tax (if any)

Additionally, if imports are exempted or reduced from import tax:

Tax calculation price for imports = Import price + Import tax determined according to the tax payable after exemption, reduction