Is the vaccine injection service subject to value-added tax in Vietnam? Which goods and services are exempt from value-added tax in Vietnam?

Is the vaccine injection service subject to value-added tax in Vietnam?

Based on Clause 10, Article 2 of the Law on Prevention and Control of Infectious Diseases 2007, it is stipulated:

Terminology Explanation

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10. Vaccine is a preparation containing an antigen that provides the body with the ability to mount an immune response, used for disease prevention purposes.

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According to Clause 9, Article 5 of the Law on value-added Tax 2008 (amended by Clause 2, Article 1 of the Law amending the value-added Tax Law, the Special Consumption Tax Law, and the Tax Management Law 2016), the subjects not subject to tax are specified as follows:

Non-taxable Objects

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9. Medical services, veterinary services, including medical examination, treatment, disease prevention for humans and animals; eldercare services, services for people with disabilities.

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Additionally, based on Point a, Clause 1, Article 1 of Circular 130/2016/TT-BTC issued by the Ministry of Finance guiding non-VAT objects:

Medical services, veterinary services, including medical examination, treatment, disease prevention for humans and animals, family planning services, health care services, rehabilitation for the sick, eldercare services, services for people with disabilities; patient transportation, room rental services, hospital beds of medical facilities; tests, screenings, imaging, blood and derivative products used for patients.

Eldercare services, services for people with disabilities include medical care, nutrition, and organizing cultural, sports, entertainment, physical therapy, rehabilitation activities for the elderly, people with disabilities.

In cases where the package of treatment services (as regulated by the Ministry of Health) includes the use of therapeutic drugs, the revenue from therapeutic drugs within the treatment package is also not subject to VAT.

Therefore, based on the above guidelines and regulations, the vaccine injection service for disease prevention for humans is classified as a disease prevention service for humans and is not subject to VAT.

Is the vaccine injection service subject to value-added tax in Vietnam? (Image from the Internet)

Which goods and services are exempt from value-added tax in Vietnam?

Based on Article 5 of the Law on value-added Tax 2008 (amended by Clause 1, Article 1 of the Law amending the value-added Tax Law 2013, Clause 1, Article 1 of Law No. 106/2016/QH13 and supplemented by Clause 1, Article 3 of the Law Amending Laws on Taxation 2014), the non-taxable subjects are defined as follows:

- Crops, livestock, aquaculture products harvested or caught that have not been processed into other products or are only preliminarily processed by organizations or individuals directly engaged in production, catching, and selling them and during importation.

Enterprises, cooperatives purchasing unprocessed agricultural products, livestock, aquaculture products sold by organizations, individuals directly engaged in production, catching, are not required to declare and pay VAT but are entitled to input VAT credit.

- Products being breeding animals, plant seeds, including breeding eggs, breeding animals, plant seeds, breeding seeds, semen, embryos, genetic materials.

- Watering, drainage; plowing, harrowing soil; dredging canals, ditches serving agricultural production; agricultural product harvesting services.

- Fertilizers; specific machinery, equipment used for agricultural production; offshore fishing vessels; livestock, poultry feed, and other feed for animals.

- Salt products made from seawater, natural rock salt, refined salt, iodized salt with sodium chloride (NaCl) as the main component.

- State-owned housing sold by the State to current tenants.

- Land use right transfer.

- Life insurance, health insurance, study insurance, and other insurance services related to humans; livestock insurance, plant insurance, other agricultural insurance services; insurance for ships, boats, equipment, and necessary tools directly serving fishing operations; reinsurance.

- The following financial, banking, and securities services:

+ Credit services include: lending; discounting, rediscounting negotiable instruments and other valuable papers; guarantee; finance leasing; credit card issuance; domestic factoring; international factoring; other credit provision forms as prescribed by law;

+ Lending services of taxpayers who are not credit institutions;

+ Securities business includes: securities brokerage; securities dealing; securities underwriting; securities investment consulting; securities custody; securities investment fund management; securities portfolio management; market organization services of the stock exchange or securities trading center; other securities business activities as prescribed by securities law;

+ Capital assignment includes: assignment of part or all of the invested capital, including the sale of an enterprise to another enterprise for production, business purposes, securities transfer; other capital transfer forms as prescribed by law;

+ Debt trading;

+ Foreign currency trading;

+ Derivatives financial services include: interest rate swaps; forward contracts; futures contracts; foreign currency options purchasing, selling; other derivatives financial services as prescribed by law;

+ Sale of secured debt assets of the organization wholly owned by the Government of Vietnam established to handle bad debt of Vietnamese credit organizations.

- Medical services, veterinary services, including examination, treatment, disease prevention for humans and animals; eldercare services, services for people with disabilities.

- Public postal, telecommunications services and universal Internet services under the Government of Vietnam's program.

- Maintenance services for zoos, flower gardens, parks, street green spaces, public lighting; funeral services.

- Repair, maintenance, construction funded by public contributions, humanitarian aid for cultural, art projects, public utility projects, social policy housing, infrastructure.

- Education and vocational training according to the provisions of the law.

- Broadcasting funded by the state budget.

- Publishing, importing, distributing newspapers, journals, newsletters, specialized publications, political books, textbooks, textbooks, legal documents, scientific-technical books, books published in minority languages, propaganda pictures, posters, including audio, video recordings, electronic data; currency, currency printing.

- Public passenger transport by bus, electric vehicles.

- Machinery, equipment, spare parts, materials not yet produced domestically needing to be imported for direct use in scientific research, technology development; machinery, equipment, spare parts, special-use transportation, and materials not yet produced domestically needing to be imported to deploy oil, gas exploration activities; aircraft, drilling rigs, ships not yet produced domestically needing to be imported to form fixed assets of enterprises or rented from abroad for production, business, leasing, sub-leasing.

- Special-use weapons, ammunition for national defense, security.

- Imported goods in cases of humanitarian aid, non-refundable aid; gifts to state agencies, political organizations, political-social organizations, social-political-professional organizations, social organizations, social-professional organizations, armed force units; gifts to individuals in Vietnam within the limits prescribed by the Government of Vietnam; personal belongings of foreign organizations, individuals treated under diplomatic immunity; goods carried by individuals within tax-exempt luggage norms.

Goods, services sold to foreign organizations, individuals, and international organizations for humanitarian aid, non-refundable aid to Vietnam.

- Goods trans-shipped, transited through Vietnam; temporarily imported goods for re-export; temporarily exported goods for re-import; imported raw materials for the production, processing of exported goods based on production, processing contracts signed with foreign parties; goods, services sold between foreign countries and non-tariff zones and between non-tariff zones.

- Technology transfer under the Law on Technology Transfer; intellectual property rights transfer under the Law on Intellectual Property; computer software.

- Gold imported in the form of bullion, not yet processed into jewelry, decorative items, or other products.

- Exported products are natural resources, minerals that have not been processed into other products; exported products processed from resources, minerals with total value of resources, minerals plus energy costs accounting for 51% or more of the product cost.

- Artificial products used to replace parts of the human body; crutches, wheelchairs, and other special-use tools for disabled people.

- Goods, services of households, business individuals with annual revenue of one hundred million VND or less.

When is the time for determining VAT in Vietnam?

According to Article 5 of Decree 209/2013/ND-CP, the time for determining value-added tax is regulated as follows:

- The time for determining VAT for goods is the time of transfer of ownership or use rights of goods to the buyer, regardless of whether payment has been collected or not.

- The time for determining VAT for services is at the time of completion of service provision or the time of invoicing for service provision, regardless of whether payment has been collected or not.