Shall VAT apply to educating activity provision in Vietnam from July 1, 2025?

Shall VAT apply to educating activity provision in Vietnam from July 1, 2025?

Based on Clause 13, Article 5 of the Law on Value-Added Tax 2024 (effective from July 1, 2025), specific provisions regarding non-taxable subjects are as follows:

Non-taxable subjects

...

12. Activities of upkeep, repair, construction funded by public contributions, humanitarian aid funds (constituting 50% or more of the total capital used for the works) for historical-cultural monuments, scenic spots, cultural works, art works, public utility works, infrastructure, and housing for social policy beneficiaries.

13. Teaching and vocational training activities pursuant to the provisions of the laws on education, vocational education.

14. Broadcasting via state budget capital.

....

Thus, through the above provision, educating activity provision according to educational regulations are not subject to value added tax from July 1, 2025.

Shall VAT apply to educating activity provision in Vietnam from July 1, 2025? (Image from the Internet)

Where is VAT paid? What are the forms of VAT payment in Vietnam?

Pursuant to Article 56 of the Law on Tax Administration 2019, specific provisions regarding the location and form of tax payment are as follows:

[1] Taxpayers shall pay tax money into the state budget according to the following regulations:

- At the State Treasury;

- At the tax administration agency where the tax return is submitted;

- Through an organization authorized by the tax administration agency to collect taxes;

- Through commercial banks, other credit institutions, and service organizations as prescribed by law.

[2] The State Treasury, commercial banks, other credit institutions, and service organizations as prescribed by law are responsible for arranging locations, means, officials, staff to ensure convenience for taxpayers to promptly pay tax money into the state budget.

[3] Agencies or organizations, when receiving tax money or withholding tax, must issue a tax collection voucher to the taxpayer.

[4] Within 08 working hours from the time of collecting tax money from the taxpayer, the agency or organization receiving the tax money must transfer it into the state budget. In the case of tax collection in cash in remote, island areas or areas with difficult access, the time limit for transferring tax money into the state budget follows the regulations of the Minister of Finance.

Which entities are the value-added taxpayers in Vietnam from July 1, 2025?

Based on Article 4 of the Law on Value-Added Tax 2024 (effective from July 1, 2025), the specific provisions regarding VAT payers are as follows:

- Organizations, households, individuals producing, trading goods, services subject to value added tax (hereinafter referred to as business establishments).

- Organizations, individuals importing goods subject to value added tax (hereinafter referred to as importers).

- Organizations, individuals producing, doing business in Vietnam purchasing services (including services associated with goods) from foreign organizations without permanent establishments in Vietnam, individuals abroad not residing in Vietnam, except where specified in Clause 4 and Clause 5, Article 4 of the Law on Value-Added Tax 2024; organizations producing, doing business in Vietnam purchasing goods, services to conduct oil and gas exploration, development activities from foreign organizations without permanent establishments in Vietnam, individuals abroad not residing in Vietnam.

- Overseas suppliers without permanent establishments in Vietnam engaged in e-commerce, digital-based business with organizations, individuals in Vietnam (hereinafter referred to as overseas suppliers); organizations managing overseas digital platforms deducting, paying tax obligations on behalf of overseas suppliers; business entities in Vietnam applying the credit method of value added tax for purchases from overseas suppliers without permanent establishments in Vietnam through e-commerce channels or digital platforms deducting, paying tax obligations on behalf of overseas suppliers.

- Organizations managing e-commerce platforms, managing digital platforms with payment functions deducting, paying tax on behalf of, declaring deducted tax amounts for business households, individuals trading on e-commerce platforms, digital platforms.

According to the Law on Value-Added Tax 2024, what is the timing for determining VAT in Vietnam?

Based on Article 8 of the Law on Value-Added Tax 2024 (effective from July 1, 2025), specific provisions regarding the timing for determining VAT are as follows:

[1] The timing for determining value added tax is stipulated as follows:

- For goods, it is the time of transfer of ownership or right to use the goods to the buyer or the time of issuance of the invoice, regardless of whether money has been collected or not;

- For services, it is the completion time of providing the service or the issuance time of the service provision invoice, regardless of whether money has been collected or not.

[2] The timing for determining value added tax for the following goods, services is stipulated by the Government of Vietnam:

- Exported goods, imported goods;

- Telecommunication services;

- Insurance business services;

- Electricity supply activities, electricity production activities, clean water supply activities;

- Real estate business activities;

- Construction, installation activities, and oil and gas activities.