What is the VAT rate for children's toys in Vietnam? What is the formula for calculating VAT on children's toys in Vietnam?
What is the VAT rate for children's toys in Vietnam?
According to Article 10 of Circular 219/2013/TT-BTC, the specific VAT rate of 5% is stipulated as follows:
5% VAT Rate
..
- Cultural activities, exhibitions, sports; performing arts; film production; importation, distribution, and screening of films.
a) Cultural, exhibition, and sports activities, excluding revenues from: sales of goods, venue rentals, and booth rentals at fairs and exhibitions.
b) Performing arts activities such as: opera, traditional opera, reformed opera, singing, dancing, music, drama, circus; other performing arts activities and the service of organizing such performances by theaters or troupes with permits issued by competent State authorities.
c) Film production; importation, distribution, and screening of films, excluding products mentioned in item 15 of Article 4 of this Circular.
14. Children's toys; various books, excluding books not subject to VAT as guided in item 15 of Article 4 of this Circular.
- Science and technology services, which include activities supporting and serving scientific research and technological development; activities related to intellectual property; technology transfer, standards, technical regulations, measurement, product and goods quality, radiation safety, nuclear and atomic energy; information, consultation, training, and dissemination services, and the application of scientific and technological achievements in socio-economic fields according to science and technology service contracts as prescribed by the Law on Science and Technology, excluding online games and entertainment services on the Internet.
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Therefore, according to the above stipulation, children's toys are subject to a VAT rate of 5%.
What is the VAT rate for children's toys in Vietnam? (Image from the Internet)
How is the tax value for children's toys determined in Vietnam?
According to Article 7 of the Law on Value Added Tax 2008 as amended by item 2 of Article 1 Amended Law on Value Added Tax 2013, the specific regulations on tax value are as follows:
- For goods and services sold by producers or businesses, it is the selling price excluding VAT; for goods and services subject to special consumption tax, it is the price including the special consumption tax but excluding VAT; for goods subject to environmental protection tax, it is the price including the environmental protection tax but excluding VAT; for goods subject to both special consumption tax and environmental protection tax, it is the price including these taxes but excluding VAT.
- For imported goods, the tax value is the import price at the port plus import tax (if any), plus special consumption tax (if any), and plus environmental protection tax (if any). The import price at the port is determined by the regulations on taxable prices of imported goods.
- For goods and services used for exchange, internal consumption, or gifting, the tax value is the VAT taxable price of equivalent goods and services at the time these activities occur.
- For property leasing activities, it is the rental amount excluding VAT.
- If the lease is paid periodically or prepaid for a lease term, the tax value is the lease amount paid periodically or prepaid for the lease term excluding VAT.
- In the case of renting machinery, equipment, or transport vehicles that cannot be produced domestically for leasing, the tax value is minus the rental fee payable to the foreign party.
- For goods sold on an installment or deferred payment basis, the tax value is the one-time selling price excluding VAT without including installment or deferred payment interests.
- For goods processing, it is the processing cost excluding VAT.
- For construction and installation activities, it is the value of the project, project segments, or executed work handed over excluding VAT. If construction and installation do not include materials, machinery, and equipment, then the tax value is the construction and installation value excluding those materials, machinery, and equipment.
- For real estate business activities, it is the real estate selling price excluding VAT, minus the land use transfer price or land rent payable to the State.
- For agency and brokerage activities in goods sales and services with commission, the tax value is the commission earned from these activities excluding VAT.
- For goods and services with payment documents stating a payment price that includes VAT, the tax value is determined by the following formula:
Tax-free price = Payment price/(1 + VAT rate of goods, services (%))
- The tax value for goods and services specified in item 1 Article 7 of the Law on Value Added Tax 2008 includes additional surcharges and fees that the business entity is entitled to.
What is the formula for forward VAT calculation for children's toys in Vietnam?
The formula for calculating VAT using the forward method is:
VAT = Taxable value x VAT rate |
Where:
The VAT taxable value is the selling price of goods or services excluding VAT.
The VAT rate is the percentage of VAT applied to goods or services (e.g., 5%, 10%,…).
Therefore, to calculate the VAT for children's toys, we use the following formula:
Children's Toy VAT = Selling Price x 5%
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