Vietnam: Is the VAT rate for dental examination and treatment chairs 5% or 10%?

What are the bases for VAT calculation for dental examination and treatment chairs in Vietnam?

Based on the provisions of Article 6 of Circular 219/2013/TT-BTC, the VAT calculation base for dental examination and treatment chairs is the tax base and tax rate.

Vietnam: Is the VAT rate for dental examination and treatment chairs 5% or 10%? (Image from the Internet)

Vietnam: Is the VAT rate for dental examination and treatment chairs 5% or 10%?

According to the guidance in Official Dispatch 18765/BTC-CST of 2014 regarding the value-added tax for dental examination and treatment chairs as follows:

"The Ministry of Finance received feedback from local customs authorities concerning difficulties in applying the value-added tax (VAT) rate at the import stage for the product of dental examination and treatment chairs. To ensure consistent guidance on VAT policy for this product, the Ministry of Finance has consulted with the Ministry of Health as follows:

- Clause 5, Article 4 of Circular No. 83/2014/TT-BTC dated June 26, 2014, by the Ministry of Finance guiding VAT according to the list of imported goods, stipulates "5. Medical equipment and instruments include specialized machinery and instruments for medicine such as: types of scanning, imaging devices for medical examination and treatment; specialized equipment and instruments for surgery, wound treatment, ambulances; blood pressure, cardiac, and vascular meters, blood transfusion instruments; syringes; contraceptive devices; other specialized medical instruments and equipment as regulated in the VAT tariff schedule attached to this Circular"

- According to the VAT tariff schedule attached to Circular No. 83/2014/TT-BTC, the item "dental chair" is specifically named under code 9402.10.10 with a VAT rate of 10% (classified under group 94.02 - Furniture used in medical, surgical, dental, or veterinary sciences). Items of equipment and instruments used in the medical, surgical, dental, or veterinary fields classified under group 90.18 have a VAT rate of 5%.

- As per the detailed HS 2012 explanation for group 94.02: "Dental chairs (including those that can be used as both a chair and a bed for anesthesia) that do not come with the dental instruments of group 90.18 have components (usually a telescopic column) to lift, tilt, and sometimes rotate on the main pedestal, regardless of whether these chairs are equipped with other devices (such as lighting instruments). The mouthwash appliances accompanied by a dentist's saliva ejector (even if placed on a support or stand) and dental chairs equipped with dental instruments of group 90.18 do not belong to this group (group 90.18). Note that this group is limited to furniture designed exclusively for use in the medical, surgical, dental, or veterinary fields; furniture with general use not having these characteristics are excluded."'

Accordingly:

+ In the case where the item "dental examination and treatment chair" is determined as specialized medical equipment or instrument, it belongs to group 90.18 and is subject to a VAT rate of 5%;

+ In the case where the item "dental examination and treatment chair" is determined as furniture used in the dental field, it belongs to group 94.02 and is subject to a VAT rate of 10%."

Therefore, the applicable VAT rate for dental examination and treatment chairs is determined as follows:

- If the item "dental examination and treatment chair" is identified as specialized medical equipment or instrument, it belongs to group 90.18 and is subject to a VAT rate of 5%;

- If the item "dental examination and treatment chair" is identified as furniture used in the dental field, it belongs to group 94.02 and is subject to a VAT rate of 10%.

Is the VAT rate for dental examination and treatment chairs 5% or 10%? (Image from the Internet)

When is the determination time for VAT on dental examination and treatment chairs in Vietnam?

Based on the provisions of Article 8 of Circular 219/2013/TT-BTC regarding the determination point for VAT as follows:

Determination Point for VAT

1. For sales of goods, it is the time of transferring ownership or the right to use goods to the buyer, regardless of whether payment has been received or not.

2. For service provision, it is the time of completion of service provision or the time of issuing the service provision invoice, regardless of whether payment has been received or not.

For telecommunications services, it is the time of completion of reconciliation of service connection charges data under the economic contract between telecommunications service businesses, but no later than 2 months from the month in which the service connection charges arise.

3. For electricity and clean water supply activities, it is the date of recording the electricity or water consumption index on the meter to be recorded on the invoice.

4. For real estate business, infrastructure construction, house construction for sale, transfer, or lease, it is the time of receiving payments according to project implementation progress or payment schedule specified in the contract. Based on the collected amount, the enterprise must declare the VAT revenue generated in the period.

5. For construction, installation, including shipbuilding, it is the time of acceptance, transfer of the project, project category, construction volume, and installation completion, regardless of whether payment has been received or not.

6. For imported goods, it is the time of registration of the customs declaration.

Thus, the determination point for VAT on dental examination and treatment chairs is identified according to each case mentioned above.