Which entities are exempted from VAT payment in Vietnam under the Law on Value-Added Tax in 2024?

Which entities are VAT payers in Vietnam under the Law on Value-Added Tax in 2024?

According to the provisions of Article 5 of the Law on Value-Added Tax 2024...Download (document effective from July 1, 2025), the subjects liable to tax are goods and services used for production, business, and consumption in Vietnam, excluding those specified in Article 5 of the Law on Value-Added Tax 2024.

Which entities are exempted from VAT payment in Vietnam under the Law on Value-Added Tax in 2024?

Based on the provisions of Article 5 of the Law on Value-Added Tax 2024...Download, the non-taxable subjects are defined as follows:

(1) Products of crops, plantations, livestock, aquaculture that have not been processed into other products or only through simple preliminary processing by individuals or organizations who produce, catch, and sell them, and at the import stage.

(2) Breeding animal products in accordance with the law on animal husbandry, plant breeding materials as prescribed by the law on crop production.

(3) Animal feed as per the law on animal husbandry; aquaculture feed as per the law on fisheries.

(4) Salt products produced from seawater, natural rock salt, refined salt, iodized salt, with sodium chloride (NaCl) as the main component.

(5) State-owned housing sold to the tenants.

(6) Irrigation, drainage; plowing, harrowing; dredging canals, ditches within the agricultural field for service of agricultural production; services for harvesting agricultural products.

(7) Transfer of land use rights.

(8) Life insurance, health insurance, student insurance, and other human-related insurance services; livestock insurance, crop insurance, other agricultural insurance services; insurance for ships, boats, equipment, and other necessary tools directly serving aquaculture; reinsurance; insurance for oil and gas projects, equipment, and vessels bearing foreign nationality rented by oil and gas contractors or foreign subcontractors for operations in Vietnam's maritime areas or overlapping sea areas where Vietnam and coastal adjoining or opposite states have agreed to place under joint exploitation policies.

(9) The following financial, banking, stock, and commercial services:

- Credit granting services in accordance with the law on credit institutions and fees specifically stated in the Loan Agreement of the Government of Vietnam with a foreign lender;

- Loan services provided by taxpayers who are not credit institutions;

- Securities trading including brokerage, proprietary trading, underwriting, securities investment consultant, management of securities investment funds, portfolio management as per the law on securities;

- Capital transfer including partial or full transfer of invested capital in other economic organizations (whether or not a new legal entity is established), securities transfer, capital contribution rights transfer, and other capital transfer methods as prescribed by law, including the case of selling a business to another business for production, and the purchasing business inherits all rights and obligations of the selling business as per the law. Capital transfers specified here do not include project transfers, sale of assets;

- Debt sales including sale of receivables and payables;

- Foreign currency trading;

- Derivative products as per the law on credit institutions, the law on securities, and the law on commerce, including interest rate swaps; forward contracts; futures contracts; purchase and sale option contracts, and other derivative products;

- Sale of collateral for the debts of entities wholly owned by the state capital established by the Government of Vietnam with the function of buying, selling debt to handle bad debts of Vietnam's credit institutions.

(10) The following medical and veterinary services:

- Medical services including: medical examination, treatment, prevention services for people, family planning services, health care, rehabilitation services for the patient; care services for the elderly, people with disabilities; transportation of sick people, leasing of hospital rooms, patient beds of medical facilities; testing, scanning; blood and blood preparations for patient use.

- Care services for the elderly, people with disabilities, including health care, nutrition, and organization of cultural, sports, recreational activities, physiotherapy, and rehabilitation for the elderly and people with disabilities.

In cases where the medical service package as prescribed by the Ministry of Health includes the use of medicine, charges collected for medicines included in the medical service package are also non-VATable;

- Veterinary services including medical examination, treatment, prevention services for animals.

(11) Funeral services.

(12) Maintenance, repair, construction activities funded by people's contributions, humanitarian aid capital (accounting for at least 50% of total capital used in the project) for historical-cultural relics, scenic spots, cultural works, artistic works, public service structures, infrastructure, and housing for policy beneficiaries.

(13) Education, vocational education activities as per the laws on education and vocational education.

(14) Broadcasting of radio and television funded by state budget capital.

(15) Publishing, import, distribution of newspapers, magazines, bulletins, special issues, political books, textbooks, training materials, legal documents, scientific-technical books, books serving external information, books printed in ethnic minority languages, and propaganda materials, including audio or video tapes, discs, electronic data; money, printing money.

(16) Public passenger transportation by bus, tram, inland waterway vehicles.

(17) Machinery, equipment, spare parts, materials not manufactured domestically that need to be imported for direct use in scientific research, technology development activities; machinery, equipment, replacement parts, special-use transportation means, and materials not manufactured domestically for exploration, oil and gas development; airplanes, helicopters, gliders, rigs, ships that are not manufactured domestically needed to be imported for the creation of fixed assets of enterprises or leased from foreign countries for production, business, leasing.

(18) National defense products according to the list issued by the Minister of Defense, the Minister of Public Security; imported products, services serving the national defense industry according to the list issued by the Prime Minister of the Government of Vietnam.

(19) Imported goods in the following cases: humanitarian aid, non-refundable aid; goods, services sold to foreign organizations, individuals, international organizations for humanitarian aid, non-refundable aid to Vietnam.

(20) Transited goods through Vietnam's territory; temporary import for re-export; temporary export for re-import; raw materials imported for production, processing of exported goods under processing contracts signed with foreign parties; goods, services traded between foreign countries with tax-free zones and between tax-free zones with each other.

Imported goods from abroad by leasing companies transported directly to tax-free zones for financial leasing by enterprises within those zones.

(21) Technology transfer as prescribed by the Law on Technology Transfer; intellectual property right transfer as prescribed by the Intellectual Property Law; software products and software services as per the law.

(22) Gold bars, ingots not processed into jewelry, fine arts items or other products at the import stage.

(23) Exported products that are unprocessed resources, minerals or processed into other products according to the list specified by the Government of Vietnam suited to state directions on discouraging, limiting export of unprocessed, raw resources and minerals.

(24) Artificial products replacing body parts of patients, including implanted body parts; crutches, wheelchairs, and specialized tools for people with disabilities.

(25) Goods, services of households, individual producers, businesses with annual turnover of 200 million VND or less; assets of organizations, individuals not trading, not being VAT taxpayers sold out; national reserves sold by national reserve agencies; fees, charges as per the law on fees and charges.

(26) Imported goods in the following cases:

- Gifts to state agencies, political organizations, political-social organizations, political-social-professional organizations, social organizations, social-professional organizations, people's armed forces units within the import duty exemption limits as per export and import tax laws;

- Gifts in the duty-free import limits as per export and import tax laws from foreign organizations, individuals to Vietnamese individuals; goods of foreign organizations, individuals as per diplomatic exemption standards and personal belongings within the duty-free import limits as per export and import tax laws;

- Goods within the duty-free luggage standards as per export and import tax laws;

- Imported goods donated, sponsored for disaster, epidemic, disease, war prevention, rescue, recovery as per the Government of Vietnam;

- Goods bought, exchanged across the border for production, consumption of border residents as per the goods buying, exchange list regulated by the law and within duty-free import limits as per export and import tax laws;

- Artifacts, antiquities, national treasures as per the cultural heritage laws imported by authorized state agencies.

Which entities are exempted from VAT payment in Vietnam under the Law on Value-Added Tax in 2024? (Image from the Internet)

When is the time for calculating VAT in Vietnam?

According to Article 8 of the Law on Value-Added Tax 2024...Download, the time for calculating value-added tax is stipulated as follows:

- For goods, it is the time of transferring ownership or right to use goods to the buyer or the time of issuing the invoice, regardless of whether payment has been received or not;

- For services, it is the time of service provision completion or the time of issuing the service provision invoice, regardless of the payment status.

Additionally, the time for calculating VAT for goods and services specified here is regulated by the Government of Vietnam:

- Export goods, import goods;

- Telecommunication services;

- Insurance business services;

- Electricity provision activities, electricity, clean water production activities;

- Real estate business activities;

- Construction, installation, and oil and gas activities.