What are cases where imports are exempt from VAT in Vietnam?

What are cases where imports are exempt from VAT in Vietnam?

According to Article 4 of Circular 219/2013/TT-BTC, the cases in which imports are not subject to VAT are as follows:

- Animal breed products, plant breed products that are not subject to VAT when imported by business entities with a business registration certificate for animal and plant breeds issued by a state management agency.

- Newspapers, magazines, specialized newsletters, political books, textbooks, educational materials, law documents, technical and scientific books, books printed in ethnic minority languages, and posters, photographs, and propaganda posters including in audio or video tape, electronic data format; money, minting money.

- imports of types that are not yet produced domestically:

+ Machinery, equipment, spare parts, supplies imported for direct use in scientific research and technological development activities;

+ Machinery, equipment, replacement parts, specialized transport vehicles, and materials to be imported for conducting exploration activities, the development of oil and gas fields;

+ Aircraft (including aircraft engines), drilling rigs, ships of types that are not yet produced domestically, imported for forming fixed assets of enterprises or leased from abroad to be used for production, business, leasing, and sub-leasing.

- Weapons, military equipment (including materials, machinery, equipment, spare parts) specialized for national defense and security imported and exempted from import tax according to regulations of the Export Tax and Import Tax Law, or imported under annual quotas approved by the Prime Minister of Vietnam.

- Goods imported as humanitarian aid, non-refundable aid, and confirmed by the Ministry of Finance or the Department of Finance.

- Goods imported as gifts to state agencies, political organizations, socio-political organizations, socio-political-professional organizations, social organizations, social-professional organizations, people's armed units as regulated by law on gifts and donations.

- Goods imported as gifts and donations to individuals in Vietnam as regulated by law on gifts and donations.

- Goods imported as personal belongings of foreign organizations and individuals exempt from diplomatic according to the law on diplomatic immunities.

- Goods imported as belongings of overseas Vietnamese returning to the country.

- imports as personal luggage within the duty-free allowance.

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

- Temporary import for re-export goods; temporary export for re-import goods; raw materials, supplies imported for manufacturing, processing export goods under manufacturing and processing contracts signed with foreigners.

- Gold imported in bar or ingot form that has not been processed into fine art, jewelry, or other products.

What are cases where imports are exempt from VAT in Vietnam? (Image from the Internet)

When is the time to determine VAT on imports in Vietnam?

According to Clause 6, Article 8 of Circular 219/2013/TT-BTC, the time to determine VAT on imports is from the time of registering the customs declaration.

Where is the place to pay VAT for imports in Vietnam?

According to Article 20 of Circular 219/2013/TT-BTC, the following are the places for VAT submission:

Place of Tax Payment

1. Taxpayers declare and pay VAT at the location of production and business activities.

2. Taxpayers using the deduction method, with production establishments accounting for dependent accounting in a province or city different from where the headquarters is located, must pay VAT at the location of the production establishment and the headquarters.

3. If enterprises or cooperatives apply the direct method with production establishments in different provinces or cities from their headquarters or have itinerant sales outside the province, they will declare and pay VAT based on a percentage on revenue in those locations. Enterprises or cooperatives do not have to pay VAT by revenue percentage at the headquarters for revenue arising outside the province that has been declared and paid.

4. If a telecommunication service business has postpaid telecommunication service activities in a different province or city from its headquarters and has established dependent branches liable to VAT under the deduction method, it will declare and pay VAT for postpaid telecommunication services as follows:

- Declare VAT for the postpaid telecommunication service revenue of the entire business to the tax authority directly managing the headquarters.

- Pay VAT at the headquarters and where the dependent branch is located.

The VAT to be paid at the location where the dependent branch is located is determined at a rate of 2% (for postpaid telecommunication services subject to 10% VAT) on revenue (excluding VAT) from postpaid telecommunication services at the location of the dependent accounting branch.

5. Tax declaration and VAT payment are implemented according to the regulations of the Tax Administration Law and its guiding documents.

Thus, VAT on imports can be paid at:

- The location of production and business activities.

- The location of production establishment and the headquarters if taxpayers paying VAT by deduction have a dependent production establishment in a different province or city from where the headquarters is located.

- The location of the production establishment or itinerant sales location if enterprises or cooperatives apply the direct method, having production establishments in different provinces or cities from the headquarters or outside selling activities.

- The location of the headquarters and where the dependent accounting branch is located if a telecommunication service business involves postpaid telecommunication services in a different province or city from the headquarters and has dependent branches subject to VAT under the deduction method involved in postpaid telecommunication services at that location.