From July 1, 2025, are veterinary services subject to value-added tax in Vietnam?

From July 1, 2025, are veterinary services subject to value-added tax in Vietnam?

Pursuant to point b, clause 10, Article 5 of the Law on Value-Added Tax 2024 (effective from July 1, 2025), which stipulates the subjects not subject to value-added tax as follows:

Subjects not subject to tax

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10. The following medical and veterinary services:

a) Medical services include: services for examination, treatment, and prevention for people; family planning services; health care and rehabilitation services for patients; services for the care of the elderly and disabled; patient transportation; renting of hospital rooms and beds; laboratory, imaging, and diagnostic services; blood and blood products for patients.

Services for care of the elderly and disabled include health care, nutrition, and organizing cultural, sports, entertainment, physiotherapy, and rehabilitation activities for the elderly and disabled.

In cases where the medical package services stipulated by the Ministry of Health include the use of therapeutic drugs, the revenue from therapeutic drugs in the package is also not subject to value-added tax;

b) Veterinary services include: services for examination, treatment, and prevention for animals.

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Thus, according to the above regulations, veterinary services, including services for examination, treatment, and prevention for animals, are not subject to value-added tax.

From July 1, 2025, are veterinary services subject to value-added tax in Vietnam? (Image from the Internet)

When is the new regulation for determining value-added tax in Vietnam?

Pursuant to Article 8 of the Law on Value-Added Tax 2024 (effective from July 1, 2025), the regulations for determining value-added tax time are as follows:

- For goods, it is the time of transferring ownership or usage rights of goods to the buyer or the time of issuing an invoice, regardless of whether payment has been received;

- For services, it is the time of completion of service provision or the time of issuing the service provision invoice, regardless of whether payment has been received.

- The time of determining value-added tax for the following goods and services is regulated by the Government of Vietnam:

+ Export and import goods;

+ Telecommunications services;

+ Insurance business services;

+ Electricity supply, electricity production, and clean water activities;

+ Real estate business activities;

+ Construction, installation, and oil and gas activities.

How many value-added tax rates are specified in the new regulation in Vietnam?

According to Article 9 of the Law on Value-Added Tax 2024 (effective from July 1, 2025), there are 3 value-added tax rates as follows:

(1) 0% Tax rate

The 0% tax rate is applied to the following goods and services:

- Exported goods including: goods from Vietnam sold to organizations or individuals abroad and consumed outside Vietnam; domestic goods sold to organizations in non-tariff areas and consumed within non-tariff areas for direct support of production and export activities; goods sold in isolation zones to individuals (foreigners or Vietnamese) who have completed exit procedures; goods sold in duty-free shops;

- Exported services including: services provided directly to organizations or individuals abroad and consumed outside Vietnam; services provided directly to organizations in non-tariff areas and consumed within non-tariff areas for direct support of production and export activities;

- Other exported goods and services include: international transportation; renting of transport vehicles for use outside the territory of Vietnam; aviation and maritime services provided directly or through agents for international transportation; construction, installation activities abroad or in non-tariff areas; digital content products provided to foreign parties with documents proving consumption abroad as prescribed by the Government of Vietnam; spare parts and supplies for maintaining, repairing vehicles, machinery, equipment for foreign parties and consumed outside Vietnam; transshipment goods for export processing according to legal regulations; goods, services not subject to value-added tax when exported, except for cases where the 0% tax rate is not applicable;

- Cases where the 0% tax rate is not applied include: technology transfer, transfer of intellectual property rights abroad; reinsurance services abroad; credit services; capital transfer; derivative products; postal, telecommunications services; export products specified in clause 23, Article 5 of the Law on Value-Added Tax 2024; imported tobacco, alcohol, beer subsequently exported; gasoline, oil purchased domestically and sold to businesses in non-tariff areas; cars sold to organizations or individuals in non-tariff areas.

(2) 5% Tax rate

The 5% tax rate applies to the following goods and services:

- Clean water serving production and living purposes, excluding bottled, canned drinking water, and other beverages;

- Fertilizers, ore for fertilizer production, plant protection drugs and livestock growth stimulants according to legal regulations;

- Services of digging, dredging canals, trenches, ponds, and lakes for agriculture; breeding, caring for, and protecting plants from pests; primary processing and preservation of agricultural products;

- Products from plantations, cultivated forests (excluding timber, bamboo shoots), livestock, aquaculture, capture fisheries not yet processed into other products or only through ordinary processing, except for products specified in clause 1, Article 5 of the Law on Value-Added Tax 2024;

- Natural rubber in crepe rubber, sheet rubber, crumb rubber, coagulated rubber forms; fishing netting, ropes, and fibers for knitting fishing nets;

- Products made of jute, sedge, bamboo, rattan, leaves, straw, coconut shell, coconut fibers, water hyacinth, and other handmade products made from agricultural by-products; cotton fibers through coarse or fine combing; newsprint;

- Fishing vessels operating at sea; machinery and specialized equipment serving agricultural production as stipulated by the Government of Vietnam;

- Medical equipment as prescribed by the law on medical equipment management; disease prevention and treatment drugs; pharmaceutical substances, medicinal ingredients used for drug production for disease treatment and prevention;

- Devices used for teaching and learning, including: models, illustrations, boards, chalk, rulers, compasses;

- Traditional and folk performing arts activities;

- Toys for children; books of all kinds, except for those specified in clause 15, Article 5 of the Law on Value-Added Tax 2024;

- Scientific and technological services according to the Law on Science and Technology;

- Sale, lease, and lease-purchase of social housing in accordance with the Housing Law.

(3) 10% Tax rate

The 10% tax rate applies to goods and services not specified in clauses 1 and 2 of Article 8 of the Law on Value-Added Tax 2024, including services provided by foreign suppliers without a permanent establishment in Vietnam to organizations and individuals in Vietnam through e-commerce channels and digital platforms.