What is the VAT rate for imported sphygmomanometers in Vietnam?

What is the VAT rate for imported sphygmomanometers in Vietnam?

The sphygmomanometer (blood pressure monitor) is defined according to sub-item 3.2 Section 3 National Standard TCVN 8333-2:2011 (ISO 81060-2:2009) as a medical electrical device for non-invasive estimation of arterial blood pressure.

Based on the guidance in Official Dispatch 51358/CTHN-TTHT in 2023 regarding the value-added tax rate issued by the Tax Department of Hanoi City as follows:

"In the case where a company imports medical equipment subject to regulations stipulated in Article 1 of Circular No. 43/2021/TT-BTC which amends and supplements clause 11, Article 10 of Circular No. 219/2013/TT-BTC dated December 31, 2013, of the Ministry of Finance, a VAT rate of 5% is applicable."

"The VAT rates mentioned in Articles 10 and 11 are uniformly applied to each type of goods and services through stages of importation, production, processing, or commercial business according to the regulations stated in Article 11 of Circular No. 219/2013/TT-BTC."

Referencing the provisions in clause 11, Article 10 Circular 219/2013/TT-BTC (as amended by clause 8, Article 1 Circular 26/2015/TT-BTC, Article 1 Circular 43/2021/TT-BTC and the term "medical equipment" as amended by clause 7, Article 147 Decree 96/2023/ND-CP) as follows:

5% tax rate

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11. Medical equipment and instruments include machinery and medical instruments: types of screening and diagnostic machines for examining and treating patients; specialized equipment and tools used for surgery and wound treatment, ambulances; sphygmomanometers, heart monitors, blood vessel tools, blood transfusion instruments; syringes and needles; contraceptive instruments***;*** medical equipment and instruments that have an import license or registration certificate or standard publication receipt in accordance with medical laws or according to the List of medical equipment under specialized management of the Ministry of Health which are classified with the commodity codes under the Vietnam export and import goods list issued with Circular No. 14/2018/TT-BYT dated May 15, 2018, of the Minister of Health and any amendments or supplements (if any).

Swabs, medical dressing and medical sanitary pads; disease prevention and treatment drugs including finished drugs and drug ingredients, excluding functional foods; vaccines; medical biologicals, distilled water for drug preparation, injection solutions; medical hats, garments, masks, surgical drapes, gloves, foot covers, shoe covers, towels, specialized gloves for medical use, breast implant bags, and skin fillers (excluding cosmetics); chemical reagents and disinfecting materials used in medical tests.

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According to the above provisions, if a company imports sphygmomanometers, a tax rate of 5% is applicable.

What is the VAT rate for imported sphygmomanometers in Vietnam? (Image from Internet)

How to determine the VAT taxable price for imported sphygmomanometers in Vietnam?

The VAT taxable price for imported goods is stipulated in clause 2, Article 7 of Circular 219/2013/TT-BTC as follows:

Article 7. Taxable price

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2. For imported goods, it is the import price at the checkpoint plus (+) import tax (if any), plus (+) special consumption tax (if any), plus (+) environmental protection tax (if any). The import price at the checkpoint is determined according to regulations on taxable values for import goods.

In cases where import goods are exempt from or reduced import tax, the VAT taxable price is the import price plus (+) import tax determined after exemption or reduction.

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Hence, the VAT taxable price for imported sphygmomanometers is determined as the import price at the checkpoint plus (+) import tax (if any), plus (+) special consumption tax (if any), plus (+) environmental protection tax (if any).

Note:

- The import price at the checkpoint is determined according to regulations on taxable values for import goods.

- In cases where import goods are exempt from or reduced import tax, the VAT taxable price is the import price plus (+) import tax determined after exemption or reduction.

When is the VAT determination time for imported sphygmomanometers in Vietnam?

The VAT determination point for imported goods is regulated in Article 8 Circular 219/2013/TT-BTC as follows:

Point of determining VAT

1. For selling goods, it is the time when the ownership or right to use the goods is transferred to the buyer, regardless of whether money has been collected.

2. For providing services, it is the time when service provision is completed or when the service provision invoice is issued, regardless of whether money has been collected.

For telecommunications services, it is the time when data checking for telecommunications service charge connection is completed under an economic contract between telecommunications service business entities but no later than 2 months from the month the telecommunications service connection charge arises.

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

4. For real estate business activities, infrastructure construction, house construction for sale, transfer, or lease, it is the time of collecting money according to the project's progress or payment schedule recorded in the contract. Based on the collected amount, the business entity declares the VAT arising in the period.

5. For construction and installation, including shipbuilding, it is the time of acceptance and handover of works, work items, quantities of completed construction, and installation, regardless of whether money has been collected.

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

Thus, the VAT determination point for imported sphygmomanometers is the time of registration of the customs declaration.