Are medical physiological measurement devices subject to value-added tax (VAT) in Vietnam?

Are medical physiological measurement devices subject to value-added tax (VAT) in Vietnam?

Pursuant to Article 3 of the Value-Added Tax Law 2008, which provides for the subjects subject to value-added tax as follows:

Subjects subject to tax

Goods and services used for production, business, and consumption in Vietnam are subject to value-added tax, except for the subjects specified in Article 5 of this Law.

Additionally, referring to the provisions in Article 5 of the Value-Added Tax Law 2008, as supplemented by Clause 1, Article 3 of the Law amending Tax Laws 2014 and amended by Clause 1, Article 1 of Law No. 106/2016/QH13, Clause 1, Article 1 of the Amended Value-Added Tax Law 2013 which provides for subjects not subject to value-added tax.

Thus, medical physiological measurement devices are subject to value-added tax.

Are medical physiological measurement devices subject to value-added tax in Vietnam? (Image from the Internet)

What is the VAT rate applied to physiological measurement devices in Vietnam?

Based on point c, clause 1, Article 1 of Decree 72/2024/ND-CP regulating the reduction of value-added tax as follows:

Reduction of Value-Added Tax

1. Reduction of value-added tax for groups of goods and services currently applying the 10% tax rate, except for the following groups of goods and services:

...

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

...

Also, according to Appendix 3 issued together with Decree 72/2024/ND-CP regulations on the list of information technology goods and services not subject to VAT reduction include specialized electronic devices, including physiological measurement devices.

Thus, the VAT rate applied to physiological measurement devices is 10%.

How to determine the place for submitting value-added tax in Vietnam?

According to Article 20 of Circular 219/2013/TT-BTC regarding the place for submitting value-added tax as follows:

Place for submitting tax

1. Taxpayers declare and pay VAT at the locality of production and business.

2. Taxpayers who declare and pay VAT by the deduction method with a dependent accounting production facility located in a different province, city directly under the Central Government from where the headquarters is located must pay VAT at the locality where the production facility and headquarters are located.

3. In cases where enterprises, cooperatives apply the direct method, have production facilities in a different province, city than the location of the headquarters or engage in itinerant sales activities in other provinces, enterprises and cooperatives shall declare and pay VAT according to a percentage on the revenue for revenue generated in other provinces at the place where the production facility, itinerant sales take place. Enterprises and cooperatives do not have to pay VAT at the headquarters for revenue earned in other provinces that have been declared and taxes have been paid.

4. In cases where telecommunications service business establishments engage in postpaid telecommunications services in a different province, city under central authority from where the headquarters is located and establish a dependent accounting branch paying VAT by deduction which participates in this activity, then the telecommunications service business establishment declares and pays VAT for postpaid telecommunications service revenue as follows:

- Declare VAT for the revenue of postpaid telecommunications services of the entire business establishment with the tax agency directly managing the headquarters.

- Pay VAT at the locality where the headquarters is located and at the locality where the dependent accounting branch is located.

The VAT amount to be paid at the locality with the dependent accounting branch is determined by 2% (for postpaid telecommunications services subject to VAT at a 10% rate) on the revenue (exclusive of VAT) of postpaid telecommunications services at the locality where the dependent accounting branch is located.

5. The declaration and payment of VAT is implemented according to the provisions of the Tax Administration Law and its guiding documents.

Therefore, the places for submitting value-added tax are regulated as:

- The locality where production and business take place.

- The locality where the production facility and the head office are located if the taxpayer using the deduction method has a dependent accounting production facility in a different province, city from the head office.

- The locality where the production facility is situated, the place of itinerant sales if enterprises or cooperatives applying the direct method have production facilities in a different province, city from the headquarters or engage in itinerant sales activities in another province.

- The locality where the head office is located and the locality where the dependent accounting branch is situated if a telecommunications service business establishment engages in postpaid telecommunications services in a different province from the headquarters and establishes a dependent accounting branch paying VAT by the deduction method that participates in this local activity.