Does the Law on Value-Added Tax 2024 supplement any subjects to which a 0% tax rate is applied in Vietnam?
What are the current subjects to which a 0% tax rate is applied in Vietnam?
Based on Clause 1, Article 8 of the Law on Value-Added Tax 2008, as amended by Clause 3, Article 1 of the Amended Law on Value-Added Tax 2013 and Clause 2, Article 1 of Law No. 106/2016/QH13, the 0% tax rate applies to exported goods and services, international transportation, and goods and services not subject to value-added tax as stipulated in Article 5 of the Law on Value-Added Tax 2008 when exported, except in the following cases:
- Transfer of technology, transfer of intellectual property rights abroad;
- Reinsurance services abroad;
- Credit provision services;
- Capital transfer;
- Derivative financial services;
- Postal and telecommunications services;
- Exported products specified in Clause 23, Article 5 of the Law on Value-Added Tax 2008.
- Export goods and services are those consumed outside Vietnam, in non-tariff zones; goods and services supplied to foreign customers according to regulations of the Government of Vietnam.
Does the Law on Value-Added Tax 2024 supplement any subjects to which a 0% tax rate is applied in Vietnam?
Based on Clause 1, Article 9 of the Law on Value-Added Tax 2024 (effective from July 1, 2025) regulations on the subjects to which a 0% tax rate applies are as follows:
Tax Rate
- The 0% tax rate applies to the following goods and services:
a) Exported goods including goods sold from Vietnam to organizations or individuals abroad and consumed outside Vietnam; goods sold domestically from Vietnam to organizations in non-tariff zones and consumed in non-tariff zones directly serving export production activities; goods sold in isolated areas to individuals (foreigners or Vietnamese) who have completed exit procedures; goods sold in duty-free shops;
b) Exported services including services provided directly to organizations or individuals abroad and consumed outside Vietnam; services provided directly to organizations in non-tariff zones and consumed in non-tariff zones directly serving export production activities;
c) Other exported goods and services including: international transport; rental of means of transport used outside the territory of Vietnam; services of the aviation and maritime industries provided directly or through agents for international transport; construction and installation activities abroad or in non-tariff zones; digital information content products provided to foreign parties and with documentation proving consumption outside Vietnam as stipulated by the Government of Vietnam; spare parts, consumables for the repair and maintenance of vehicles, machinery, equipment for foreign parties and consumed outside Vietnam; goods processed for export as per the law; goods and services not subject to value-added tax when exported, except cases where the 0% tax rate does not apply as stipulated in point d of this clause;
d) Cases where the 0% tax rate does not apply include: transfer of technology, transfer of intellectual property rights abroad; reinsurance services abroad; credit provision services; capital transfer; derivative products; postal and telecommunications services; exported products as stated in Clause 23, Article 5 of this Law; tobacco, alcohol, beer imported and subsequently exported; gasoline and oil purchased domestically sold to businesses in non-tariff zones; automobiles sold to organizations, individuals in non-tariff zones.
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Thus, the Law on Value-Added Tax 2024 has added several subjects to which the 0% tax rate applies, including:
- International transport;
- Construction and installation projects abroad, in non-tariff zones;
- Goods sold in isolation areas to individuals (foreigners or Vietnamese) who have completed exit procedures; goods sold in duty-free shops;
- Exported services provided to foreign organizations, individuals, including: rental services of means of transport used outside the territory of Vietnam; aviation and maritime services supplied directly for international transport or through agents.
How is the time for determining value-added tax in Vietnam from July 1, 2025?
Based on Article 8 of the Law on Value-Added Tax 2024 (effective from July 1, 2025), the time for determining value-added tax is specified as follows:
- For goods: at the time of transfer of ownership or the right to use goods to the buyer or the time of issuing the invoice, regardless of whether money has been collected or not;
- For services: at the time of completion of service provision or the time of issuing the service provision invoice, regardless of whether money has been collected or not.
- The Government of Vietnam details the timing of value-added tax determination for goods and services including: Exported and imported goods; Telecommunications services; Insurance business services; Activities of providing electricity, clean water production activities; Real estate business activities; Construction, installation, and petroleum activities.
