Is healthcare service providers for the elderly subject to VAT in Vietnam?

Which industry code to register for healthcare service providers for the elderly in Vietnam?

Based on the provisions at No. 87, Part Q, Section 2, Appendix 2 - Contents of the Vietnam Standard Industrial Classification issued with Decision 27/2018/QD-TTg as follows:

873 - 8730: Activities for the care of people with merits, the elderly, and disabled individuals who cannot care for themselves

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87302: Elderly care activities

This group includes: Providing care services for elderly people who cannot care for themselves adequately or those who do not wish to live independently. The care includes housing, meal policies, monitoring, and assistance in daily living, such as housekeeping services. In some cases, these units also provide specialized nursing care for individuals living in other separate areas.

This group also includes:

- Activities of assisted living facilities;

- Continued healthcare activities for retirees;

- Homes for the elderly with minimal nursing care;

- Retirement homes without nursing care.

Exclusions:

- Homes for the elderly with nursing care are classified under group 87109 (Activities of nursing facilities for other groups);

- Centralized social assistance activities where medical care or lodging is not a crucial matter are classified under group 87909 (Other centralized care activities not classified elsewhere).

Therefore, if providing healthcare service providers for the elderly, register under industry code 87302.

Is healthcare service providers for the elderly subject to VAT in Vietnam? (Image from Internet)

Is healthcare service providers for the elderly subject to VAT in Vietnam?

Based on the provisions of Clause 9, Article 4 of Circular 219/2013/TT-BTC on subjects not subject to value-added tax as follows:

Subjects Not Subject to VAT

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9. Medical services, veterinary services, including examination, treatment, prevention services for humans and animals, planned childbirth services, health rehabilitation services, rehabilitation services for patients, elderly care services, and services for the disabled; patient transport, rental services for hospital rooms, hospital beds provided by medical facilities; testing, scanning, imaging, blood and blood products for patient use.

Elderly and disabled care services include healthcare, nutrition, and organizing cultural, sports, recreational, physiotherapy, and rehabilitation activities for the elderly and the disabled.

In cases where a medical service package (per regulations by the Ministry of Health) includes the use of therapeutic drugs, the revenue from such drugs included in the service package is also not subject to VAT.

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Therefore, healthcare service providers for the elderly are not subject to value-added tax.

What is the taxable value for VAT on services provided by business establishments in Vietnam?

Based on the provisions of Clause 1, Article 7 of Circular 219/2013/TT-BTC on the taxable value for VAT as follows:

Taxable Value

1. For goods and services sold by production and business establishments, it is the sale price excluding VAT. For goods and services subject to special consumption tax, it is the sale price including special consumption tax but excluding VAT.

For goods subject to environmental protection tax, it is the sale price including environmental protection tax but excluding VAT; for goods subject to both special consumption tax and environmental protection tax, it is the sale price including special consumption tax and environmental protection tax but excluding VAT.

2. For imported goods, it is the import price at the border plus (+) import tax (if any), plus (+) special consumption tax (if any), plus (+) environmental protection tax (if any). The import price at the border is determined according to regulations on the taxable value of imported goods.

In cases where imported goods are exempt from or have reduced import tax, the taxable value for VAT is the import price plus (+) import tax calculated based on the amount payable after exemption or reduction.

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Thus, the taxable value for value-added tax on services provided by business establishments is the sale price before VAT. For goods and services subject to special consumption tax, it is the sale price including special consumption tax but excluding VAT.

For goods subject to environmental protection tax, it is the sale price including environmental protection tax but excluding value-added tax; for goods subject to both special consumption tax and environmental protection tax, it is the sale price including special consumption tax, environmental protection tax but excluding value-added tax.