Vietnam: What are the codes of 5 sub-sections for VAT payment in 2024?

What are the codes of 5 sub-sections for VAT payment in 2024 in Vietnam?

According to point b clause 1 Article 4 of Circular 324/2016/TT-BTC, a sub-section code (also known as an economic content code - NDKT) is a detailed classification of an section, used to categorize specific revenue and expenditure sections in the state budget according to management subjects within each section.

Under  Appendix 3 of the List of Sections and Sub-sections issued along with Circular 324/2016/TT-BTC, the sub-section codes for VAT payment in 2024 are regulated as follows:

See the full list of chapter codes: Here

What are the codes of 5 sub-sections for VAT payment in 2024 in Vietnam? (Image from the Internet)

Which entities are required to pay VAT in Vietnam?

Under the provisions at clauses 1 and 2 of Article 2 of Decree 209/2013/ND-CP, the following entities are required to pay VAT in Vietnam:

- Value-added tax payers include organizations and individuals producing or trading in goods or services subject to value-added tax (below referred to as business establishments) and organizations and individuals importing goods subject to value-added tax (below referred to as importers).

- Vietnam-based production and business organizations and individuals that purchase services (including services associated with goods) from foreign organizations without permanent establishments in Vietnam or overseas individuals not residing in Vietnam shall be value-added tax payers, unless they are not required to declare, calculate and pay value-added tax defined at point b Clause 3 of Article 2 of Decree 209/2013/ND-CP.

Note: Permanent establishments and overseas individuals being non-residents at this Clause must comply with the laws on enterprise income tax and personal income tax.

What are the applicable VAT rates in Vietnam?

According to Article 8 of the Law on Value-Added Tax 2008 (as amended by clause 3, Article 1 of the Law on Amending the Law on Value-Added Tax 2013, Article 1 of the Law Amending the Law on Value-Added Tax, Law on Special Consumption Tax, and Law on Tax Administration 2016, and Article 3 of the Law Amending Various Tax Laws 2014), and Decree 72/2024 ND-CP, the applicable VAT rates are stipulated as follows:

(1) The 0% tax rate applies to exported goods and services, international transportation, and goods and services not subject to value-added tax as specified in Article 5 of the Law on Value-Added Tax 2008 when exported, except in the following cases:

- Transferring technology, transferring intellectual property rights abroad.

- Reinsurance services carried out abroad;

- Credit provision services;

- Capital transfer;

- Financial derivative services;

- Postal, telecommunication services;

- Exported products specified in clause 23, Article 5 of the Law on Value-Added Tax 2008.

Exported goods and services are those consumed outside Vietnam, in non-tariff zones; goods and services provided to foreign customers as regulated by the Government of Vietnam.

(2) The 5% tax rate applies to the following goods and services:

- Clean water for production and domestic use;

- Ores for fertilizer production; pesticides and growth stimulants for animals and plants;

- Canal, ditch, pond dredging services for agricultural production; cultivating, caring for, preventing diseases of plants; preliminary processing, preserving agricultural products;

- Unprocessed crop, livestock, aquaculture products, except for products stipulated in clause 1, Article 5 of this Law;

- Semi-processed rubber latex; semi-processed pine resin; fishing nets, ropes, and fibers used to weave fishing nets;

- Fresh food; unprocessed forest products, except timber, bamboo shoots, and products stipulated in clause 1, Article 5 of the Law on Value-Added Tax 2008;

- Sugar; by-products from sugar production, including molasses, bagasse, and mud;

- Products made from jute, sedge, bamboo, rattan, straw, coconut shells, coconut fibers, water hyacinth, and other handicraft products produced from agricultural waste; semi-processed cotton; newspaper printing paper;

- Medical equipment, tools, medical gauze, sanitary napkins; disease prevention and treatment drugs; pharmaceuticals, medicinal materials used as raw materials for the production of medicines for disease prevention and treatment;

- Teaching and learning aids, including models, drawings, boards, chalk, rulers, compasses, and specialized teaching, research, and experimental equipment;

- Cultural, exhibition, sports activities; art performances, film production; import, distribution, and screening of films;

- Children's toys; books of all kinds, except those specified in clause 15, Article 5 of the Law on Value-Added Tax 2008;

- Scientific and technological services as stipulated by the Law on Science and Technology;

- Sale, lease, lease-purchase of social housing as stipulated by the Law on Housing.

(3) An 8% tax rate applies to certain goods and services with reduced VAT (from 10% to 8%) according to Decree 72/2024/ND-CP.

(4) The 10% tax rate applies to goods and services not subject to the 0%, 5%, and 8% tax rates.

Thus, depending on the goods and services subject to VAT, the VAT rate applied is 0%, 5%, 10%, or 8%.