Is an information technology center subject to VAT in Vietnam?

Is an information technology center subject to VAT in Vietnam?

According to the provisions of Clause 13, Article 4 of Circular 219/2013/TT-BTC regarding objects not subject to VAT as follows:

Objects not subject to VAT

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13. Teaching and vocational training as prescribed by law, including language and computer teaching; teaching dance, singing, painting, music, drama, circus, physical education, and sports; childcare and other vocational training aimed at improving cultural, professional, and occupational knowledge.

In cases where educational institutions from kindergarten to high school collect fees for meals, transportation of students, and other collections in the form of collection on behalf and disbursement on behalf, these meal and transportation charges and other collections will also not be subject to tax.

Dormitory fees for students, learners; training activities (including organizing exams and issuing certificates in the training process) provided by the training institution are not subject to VAT. In cases where the training institution does not directly organize the training but only organizes exams and issues certificates within the training process, the exam organization and certificate issuance activities are also not subject to tax. In cases where examination and certificate issuance services are provided outside the training process, they are subject to VAT.

Example 7: Training Center X is authorized to conduct training to issue professional certificates for insurance agents. Training Center X assigns training tasks to Unit Y to execute, and Training Center X organizes exams and issues insurance agent certificates. Therefore, the exam organization and certificate issuance activities of Training Center X are not subject to VAT.

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Thus, if an enterprise operates in the field of teaching and vocational training according to the law, including computer teaching, it is not subject to VAT.

Vietnam: Is an information technology center entitled to a preferential tax rate of 10% throughout its operation?

Based on the provisions of Clause 3, Article 19 of Circular 78/2014/TT-BTC, amended by Clause 3 and 4, Article 11 of Circular 96/2015/TT-BTC on a preferential tax rate of 10% as follows:

Preferential Tax Rate

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3. The preferential tax rate of 10% throughout the operation period applies to:

a) The income portion of the enterprise from private investment activities in the education - training, vocational training, healthcare, culture, sports, and environmental sectors, judicial expertise (hereinafter collectively referred to as socialization fields).*

The category of types, scale criteria, and standards of enterprises implementing socialization are implemented according to the list prescribed by the Prime Minister of the Government of Vietnam.

b) The income portion from publishing activities by Publishers as regulated by the Law on Publishing.

Publishing activities include areas of publishing, printing, and releasing publications as stipulated in the Law on Publishing.

Publications are implemented according to the provisions of Article 4 of the Law on Publishing and Article 2 of Decree No. 111/2005/ND-CP dated August 26, 2005, of the Government of Vietnam. If the provisions of the Law on Publishing, Decree No. 111/2005/ND-CP, and other legal documents related to the field of publishing change, they shall be applied according to the new corresponding regulations in line with these documents.

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Thus, if an enterprise operates in the field of teaching and vocational training according to the law, including computer teaching, it will be eligible for the preferential enterprise income tax rate of 10% throughout its operation period.

Is an information technology center subject to VAT in Vietnam? (Image from the Internet)

What are the duties and powers of an information technology center in Vietnam?

Based on the provisions of Article 3 of the Regulation on Organization and Operation of Foreign Language and information technology centers issued under Circular 21/2018/TT-BGDDT regarding the duties and powers of an information technology center as follows:

- Organize and implement training programs to improve IT skills to meet learners' needs.

- Recruit and manage learners.

- Compile or select teaching materials that meet the output standards of training programs suitable for the target learners.

- Organize assessments and issue certificates for completing IT training programs conducted by the center. Organize tests and issue IT certificates recognized by the national education system when meeting the conditions as prescribed by the Ministry of Education and Training.

- Perform related tasks such as translation, interpretation, programming, and software installation.

- Provide training and improvement programs for the professional competence of the center's staff and teachers.

- Organize research activities to develop the center and improve education quality.

- Publicize conditions ensuring education quality.

- Determine and announce tuition levels according to learners' courses, suitable with training and enhancement quality.

- Develop internal regulations, defining the functions and duties of units within the center; manage, recruit, and develop the managerial and teaching staff according to the center's development strategy.

- Manage the center's finances and assets and enjoy preferential support policies according to legal provisions.

- Other duties and powers as prescribed by law.