From December 24, 2024, shall telecommunication services only be provided to verified subscribers in Vietnam? Are telecommunication services eligible for VAT reduction in Vietnam?

From December 24, 2024, shall telecommunication services only be provided to verified subscribers in Vietnam?

Pursuant to Article 20 of Decree 163/2024/ND-CP which stipulates the provision of telecommunication services to terrestrial mobile subscribers after subscriber information registration as follows:

Provision of telecommunication services to terrestrial mobile subscribers after subscriber information registration

The telecommunication enterprise is only allowed to provide telecommunication services to terrestrial mobile subscribers after ensuring the following contents:

1. Terrestrial mobile telecommunications subscribers have completed subscriber information registration as stipulated.

2. The enterprise has completed the verification, and storage of complete, accurate subscriber information of terrestrial mobile phones according to regulations.

Simultaneously, based on Article 18 of Decree 163/2024/ND-CP which details the verification of terrestrial mobile subscriber information as follows:

Verification of terrestrial mobile subscriber information

After receiving documents used to register subscriber information (directly or online), the enterprise has the responsibility to execute the following regulations:

1. Compare and verify that the documents match the individuals or organizations contracting, registering information as per the regulations.

2. Implement measures to verify terrestrial mobile subscriber information (for both direct and online registration forms) ensuring at least the following criteria:

a) Verify and ensure consistency with the National Database on population for at least 3 information fields on Vietnamese citizens' identification documents as stated in point a, clause 1, Article 17 of this Decree, including personal identification number; full name; date of birth;

b) For registration, activation from the second and subsequent H2H subscriber SIM, verification must be through a one-time password (OTP) sent to the previously registered and activated SIM;

c) Apply video call solutions to collect, check, and verify customer identification information during subscriber registration ensuring efficiency similar to in-person recognition and verification processes. The video call solution must meet minimum requirements: safety and security according to legal regulations; high resolution; continuous signal allowing real-time audio and visual interaction with customers to ensure the identification of real persons, displaying images of the transaction staff and the customers registering terrestrial mobile subscriber information;

d) Periodically, the Ministry of Information and Communications will coordinate with the Ministry of Public Security to guide the verification of terrestrial mobile subscriber information (including research and supplementing the verification of portrait photo information on identification documents with the National Database on population).

3. Refuse to contract or provide services to individuals or organizations that do not meet any of the following contents: present documents for subscriber information registration that are not conformable, or the documents presented are not clear, do not ensure the clarity, sharpness, and completeness of digitized documents, or the identification documents have information that does not match after verification or cannot be verified.

Thus, from December 24, 2024, telecommunication services will only be provided to subscribers who have verified information, and telecommunication enterprises can refuse to provide services to subscribers who do not meet any of the requirements regarding documents for subscriber information registration.

From December 24, 2024, shall telecommunication services only be provided to verified subscribers in Vietnam? Are telecommunication services eligible for VAT reduction in Vietnam? (Image from the Internet)

Are telecommunication services eligible for VAT reduction in Vietnam?

According to Article 2 of Circular 219/2013/TT-BTC regarding subjects liable to value-added tax, it is specified as follows:

Subjects liable to tax

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

Also, according to the provisions in Articles 4, 9, 10, and 11 of Circular 219/2013/TT-BTC regarding cases not subject to VAT and cases where VAT rates of 0%, 5% apply, the provision of telecommunication services is subject to a tax rate of 10%.

Furthermore, under point a, clause 1, Article 1 of Decree 72/2024/ND-CP which stipulates VAT reduction as follows:

VAT Reduction

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

a) Telecommunications, financial, banking, securities, insurance services, real estate business, metals and fabricated metal products, mining products (excluding coal mining), coke, refined petroleum, chemical products. Details are in Appendix I issued with this Decree.

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Thus, telecommunication service activities are not eligible for VAT reduction and are subject to a tax rate of 10%.

When is the VAT determination time for telecommunication services in Vietnam?

According to Article 8 of Circular 219/2013/TT-BTC regarding the time of determining value-added tax is as follows:

Time of determining VAT

1. For the sale of goods, it is the time of transfer of ownership or right to use goods to the buyer, regardless of whether the money has been collected or not.

2. For service provision, it is the time of completion of the service provision or the time of invoicing for the service, regardless of whether the money has been collected or not.

For telecommunication services, it is the time of completion of the reconciliation of telecommunication service charge data according to the economic contract between telecommunication service business entities but no later than 2 months from the month the telecommunication service charge arises.

3. For electricity and clean water supply activities, it is the date the electricity or water consumption is read on the meter to be recorded on the invoice.

4. For real estate business activities, infrastructure construction, house construction for sale, transfer, or lease, it is the time of money collection according to the project implementation progress or payment schedule recorded in the contract. Based on the collected amount, the business establishment declares the arising output VAT.

5. For construction and installation, including shipbuilding, it is the time of acceptance and handover of completed works, construction stages regardless of whether money has been collected or not.

6. For imported goods, it is the time of registration of the customs declaration.

Thus, the time of determining VAT for telecommunication service activities will be based on the time of completion of the reconciliation of telecommunication service charge data according to the economic contract between telecommunication service business entities but no later than 2 months from the month the telecommunication service charge arises.