What is the VAT rate for selling, leasing, or leasing to buy social housing in Vietnam?

What is the VAT rate for selling, leasing, or leasing to buy social housing in Vietnam?

Based on Point q, Clause 2, Article 8 of the Value Added Tax Law 2008, supplemented by Clause 3, Article 1 of the Amended Value Added Tax Law 2013 which provides regulations on VAT rates as follows:

Tax Rates

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

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l) Medical equipment and instruments, medical cotton, medical sanitary wipes; disease prevention and treatment drugs; pharmaceutical products, medicinal materials which are raw materials for manufacturing disease treatment drugs, and disease prevention drugs;

m) Teaching and learning aids, including models, drawings, boards, chalk, rulers, compasses, and specialized equipment and instruments for teaching, research, and scientific experiments;

n) Cultural activities, exhibitions, exercise, sports, artistic performances, film production; importation, distribution, and screening of films;

o) Children's toys; all kinds of books, except books specified in Clause 15, Article 5 of this Law;

p) Scientific and technological services as prescribed by the Science and Technology Law.

q) Selling, leasing, leasing to buy social housing as prescribed by the Housing Law.

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Thus, the VAT rate for selling, leasing, or leasing to buy social housing is 5%.

What is the VAT rate for selling, leasing, or leasing to buy social housing in Vietnam? (Image from the Internet)

What is the basis for calculating VAT in Vietnam?

According to the provisions of Article 6 of the Value Added Tax Law 2008, the basis for calculating VAT is the taxable price and tax rate.

How to determine the taxable price for VAT in Vietnam?

According to the provisions of Article 7 of the Value Added Tax Law 2008, as amended by Clause 2, Article 1 of the Amended Value Added Tax Law 2013 and Point c, Clause 2, Article 6 of the Law on Amending Tax Laws 2014, the taxable price for VAT is defined as follows:

- For goods and services sold by production and business establishments, it is the selling price excluding VAT; for goods and services subject to special consumption tax, it is the selling price inclusive of special consumption tax but excluding VAT; for goods subject to environmental protection tax, it is the selling price inclusive of environmental protection tax but excluding VAT; for goods subject to both special consumption tax and environmental protection tax, it is the selling price inclusive of both taxes but excluding VAT.

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

- For goods and services used for exchange, internal consumption, as gifts or donations, it is the taxable price of similar goods or services at the time these activities occur.

- For the rental of assets, it is the rental amount excluding VAT.

In case of rental payment on a periodic basis or upfront for the rental duration, the taxable price is the periodic rental amount or upfront payment excluding VAT.

- For installment or deferred payment sales, it is the taxable price calculated as the lump-sum selling price excluding VAT, not including installment or deferred payment interest.

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

- For construction and installation activities, it is the value of the construction or installation project, work item, or part of the work handed over excluding VAT. For construction and installation without material, machinery, and equipment supply, the taxable price is the construction or installation value excluding the value of materials and machinery, and equipment.

- For real estate business activities, it is the selling price of real estate excluding VAT, excluding land use rights transfer costs or land rent payable to the state budget.

- For agency and brokerage activities receiving commissions from the sale or purchase of goods and services, it is the commission earned from these activities excluding VAT.

- For goods and services using payment vouchers that include VAT, the taxable price is calculated as follows:

* The taxable price for goods and services as prescribed includes additional charges and fees that the business is entitled to receive.

The taxable price is determined in Vietnamese Dong. If the taxpayer has revenue in foreign currency, it must be converted into Vietnamese Dong at the average interbank exchange rate announced by the State Bank of Vietnam at the time the revenue is generated to determine the taxable price.