Is there a reduction in value-added tax for office and residential cleaning services in Vietnam?

Is there a reduction in value-added tax for office and residential cleaning services in Vietnam?

Pursuant to Article 1 of Decree 72/2024/ND-CP provisions are as follows:

Value-Added Tax Reduction

1. Reduction of value-added tax for goods and services groups currently applying the 10% tax rate, except for the following goods and services groups:

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

b) Products and services subject to special consumption tax. Details in Appendix II issued with this Decree.

c) Information technology as per information technology laws. Details in Appendix III issued with this Decree.

d) The reduction in value-added tax for each type of goods and services stipulated in clause 1 of this Article shall be uniformly applied at the stages of importation, production, processing, commercial trading. For coal products sold (including cases where the extracted coal is screened, classified and then sold under a closed process) under the category subject to value-added tax reduction. Coal products listed in Appendix I issued with this Decree, at stages other than extraction and sale are not subject to value-added tax reduction.

All major corporations and economic groups implementing a closed process before sale are also subject to value-added tax reduction for extracted coal sold.

In cases where goods and services listed in Appendices I, II, and III issued with this Decree fall under non-taxable or 5% taxable value-added tax according to the Law on Value-Added Tax, follow the provisions of the Law on Value-Added Tax, and they are not eligible for value-added tax reduction.

2. Value-Added Tax Reduction Rate

a) Businesses calculating value-added tax using the deduction method shall apply an 8% value-added tax rate to the goods and services specified in clause 1 of this Article.

Therefore, the principle is to reduce the value-added tax for groups of goods and services currently applying a 10% tax rate, except those listed in the appendices above. Comparing with the service catalog in these appendices, cleaning services are not listed there, so in principle, they will be reduced to 8% as per the regulations.

Is there a reduction in value-added tax for office and residential cleaning services in Vietnam? (Image from the Internet)

Are goods exported for exhibitions required a customs declaration for 0% VAT application in Vietnam?

Pursuant to point a clause 1, clause 2 Article 9 of Circular 219/2013/TT-BTC provisions are as follows:

0% Tax Rate

1. 0% tax rate: applicable to exported goods and services; construction and installation operation in foreign countries and in non-tariff zones; international transportation; goods and services not subject to VAT when exported, except cases where the 0% tax rate does not apply as guided in clause 3 of this Article.

Exported goods and services are those sold and provided to organizations and individuals abroad and consumed outside Vietnam; sold and provided to organizations and individuals in non-tariff zones; goods and services provided to foreign customers according to legal regulations.

a) Exported goods include:

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- Cases considered as export according to legal regulations:

+ Goods exported to sell at fairs and exhibitions abroad.

2. Conditions for applying the 0% tax rate:

a) For exported goods:

- There is a contract for sale, processing, or export entrustment;

- Documents for payment for exported goods through banks and other documents as prescribed by law;

- A customs declaration as stipulated in clause 2 of Article 16 of this Circular.

Specifically for cases where goods are sold and the delivery point is outside Vietnam, businesses (sellers) must have documents proving delivery and receipt of goods outside of Vietnam such as: purchase contract with foreign sellers; selling contract with buyer; documents proving that goods are delivered and received outside Vietnam such as: commercial invoice according to international customs, bill of lading, packing note, certificate of origin...; bank payment documents including: bank documents of the business paying the foreign seller; bank payment documents of the buyer towards the business.

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Therefore, based on the above information, goods exported for sale at fairs and exhibitions abroad are eligible for a 0% tax rate. However, the condition to apply necessitates a customs declaration as stipulated.

When shall enterprises submitting VAT by the deduction method entitled to VAT refunds in Vietnam?

Pursuant to clause 7 Article 1 of the Law on Amendments to Law on Value-Added Tax 2013 (amended by the Law on Value-Added Tax, Special Consumption Tax Law, and Tax Management Law 2016) provisions on tax refunds are as follows:

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1. Businesses submitting value-added tax by the deduction method, if having remaining input value-added tax not deducted fully in a month or quarter, may carry forward to the next period.

In cases where the business registered for tax submission by the deduction method with new investment projects is in the investment stage, having the value-added tax of purchased goods and services used for investment not yet deducted, and having a remaining tax amount of not less than three hundred million dong, the business shall be entitled to VAT refunds.

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2. Businesses in a month or quarter having exported goods or services, if having remaining input value-added tax not yet deducted from three hundred million dong or more, shall be entitled to VAT refunds monthly or quarterly, except for imported goods intended for export, or exported goods not processed through customs areas as prescribed by the Customs Law. Implement refunds first, inspect later for tax payers that produce export goods without tax or customs law violations in the last two consecutive years, and tax payers not under high-risk categories as stipulated by the Tax Management Law.

3. Businesses submitting value-added tax by the deduction method are entitled to VAT refunds upon ownership conversion, enterprise conversion, merger, consolidation, division, separation, dissolution, bankruptcy, or termination of operation with remaining or surplus paid input value-added tax.

4. Businesses with a VAT refund decision from competent authorities according to the law and in cases of VAT refund as per international treaties of which the Socialist Republic of Vietnam is a member.

Therefore, enterprises submitting value-added tax by the deduction method are entitled to VAT refunds upon ownership conversion, enterprise conversion, mergers, consolidations, division, separation, dissolution, bankruptcy, or termination of operation with surplus paid or undeducted input VAT.