What is the VAT rate for fresh food in Vietnam?

What is the VAT rate for fresh food in Vietnam?

Based on point g, clause 2, Article 8 of the Law on Value-Added Tax 2008 as supplemented by clause 3, Article 1 of the Amended Law on Value-Added Tax 2013, the specific tax rates are regulated as follows:

Tax Rate

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2. A 5% tax rate applies to the following goods and services:

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d) Services of excavation, dredging of canals, ditches, ponds, and lakes serving agricultural production; cultivation, care, pest control for plants; preliminary processing, preservation of agricultural products;

đ) Unprocessed agricultural, breeding products, aquatic products, except for the products specified in clause 1, article 5 of this Law;

e) Preliminary processed rubber resin; preliminary processed rosin; nets, grid ropes, and threads for weaving fishing nets;

g) Fresh food; unprocessed forestry products, excluding wood, bamboo shoots, and products specified in clause 1, article 5 of this Law;

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Thus, according to the above regulation, the value-added tax (VAT) rate for fresh food is 5%.

What is the VAT rate for fresh food in Vietnam? (Image from the Internet)

What are regulations on the taxable value for VAT in Vietnam?

According to Article 7 of the Law on Value-Added Tax 2008 as amended by clause 2, Article 1 of the Amended Law on Value-Added Tax 2013 and with the foreign exchange rates regulation for determining taxable value abolished by point c, clause 2, Article 6 of the Law amending Tax laws 2014, the specific taxable value is regulated as follows:

- For goods and services sold by manufacturing, business establishments, it is the selling price without VAT; for goods and services subject to special consumption tax, it is the selling price including special consumption tax but excluding VAT; for goods subject to environmental protection tax, it is the selling price including environmental protection tax but excluding VAT; for goods subject to both special consumption tax and environmental protection tax, it is the selling price including both taxes but excluding VAT;

- For imported goods, it is the price at the border plus import tax (if any), plus special consumption tax (if any) and environmental protection tax (if any). The price at the border is determined according to the regulations on taxable imported goods price;

- For goods, services used for exchange, internal consumption, gifts, the taxable value is the VAT value of similar or equivalent goods, services at the time these activities occur;

- For asset leasing activities, it is the rental amount excluding VAT.

- In case of leasing on a periodical payment basis or advance payment for the lease term, the taxable value is the periodical or pre-paid rental amount excluding VAT;

- In case of leasing machinery, equipment, transport means of foreign kinds not domestically produced for subleasing, the taxable value is deducted by the rental amount payable to the foreign party.

- For goods sold on installment and deferred payment, it is calculated according to the single payment selling price excluding VAT of those goods, not including installment interest and deferred payment interest;

- For processing goods, it is the processing price excluding VAT;

- For construction, installation activities, it is the value of the project, construction segments, or things handed over excluding VAT. For construction, installation without covering raw materials, machinery, and equipment, the taxable value is the value excluding these items;

- For real estate business activities, it is the selling price of real estate excluding VAT, except for land use right transfer or land rent payable to the state budget;

- For agency, brokerage activities of buying and selling goods and services earning commission, it is the commission obtained from these activities excluding VAT;

- For goods, services using payment documents recording the payment as the price inclusive of VAT, the taxable value is determined as follows:

Taxable price without VAT = Payment price / (1 + goods, service tax rate) (%)

- The taxable value for goods and services as prescribed in clause 1, Article 7 of the Law on Value-Added Tax 2008 includes surcharges and additional fees received by the business entity.

Who is liable to pay VAT in Vietnam?

According to Article 4 of the Law on Value-Added Tax 2008 the specific regulations on taxpayers are as follows:

VAT payers are organizations, individuals producing, trading goods, services subject to VAT (hereafter referred to as business establishments) and organizations, individuals importing goods subject to VAT (hereafter referred to as importers).