Which insurance services are exempt from VAT in Vietnam from July 1, 2025?

What are the principles for provision and use of insurance services in Vietnam?

Pursuant to the provisions of Article 6 of the Law on Insurance Business 2022 regarding principles for provision and use of insurance services as follows:

- Organizations and individuals in Vietnam wishing to participate in insurance may only engage in insurance with an insurer, a foreign non-life insurer's branch, or a mutual organization providing microinsurance with a license to establish and operate in Vietnam, except in cases of using cross-border insurance services complying with international agreements to which the Socialist Republic of Vietnam is a member.

The state will ensure the legal rights and interests of organizations and individuals participating in insurance and those engaging in insurance business activities. (Clause 1, Article 5 of the Law on Insurance Business 2022)

- The Government of Vietnam shall stipulate in detail the provision and use of cross-border insurance services, cross-border insurance brokerage services, and cross-border ancillary insurance services in accordance with international treaties to which the Socialist Republic of Vietnam is a member.

Which insurance services are exempt from VAT in Vietnam from July 1, 2025?

Based on the provisions of Clause 8, Article 5 of the Value Added Tax Law 2024 (Effective from July 1, 2025), certain insurance services exempt from VAT include:

- Life insurance, health insurance, student insurance, and other insurance services related to individuals;

- Livestock insurance, crop insurance, and other agricultural insurance services;

- Insurance for ships, fishing vessels, and other necessary equipment directly serving fisheries catching;

- Reinsurance;

- Insurance for foreign-flagged oil rigs, oil equipment, and storage vessels rented by foreign oil contractors or subcontractors for operations in the Vietnamese waters, overlapping waters that Vietnam and adjacent countries have agreed to jointly explore.

Which insurance services are exempt from VAT in Vietnam from July 1, 2025? (Image from Internet)

Which entities are VAT payers in Vietnam from July 1, 2025?

According to the provisions of Article 4 of the Value Added Tax Law 2024 (Effective from July 1, 2025), the VAT payers are specified as follows:

- Organizations, households, individuals producing and trading in goods and services subject to value-added tax (hereinafter referred to as business establishments).

- Organizations, individuals importing goods subject to value-added tax (hereinafter referred to as importers).

- Organizations, individuals producing, doing business in Vietnam that purchase services (including cases of purchasing services attached to goods) from foreign organizations without permanent establishments in Vietnam, or individuals abroad who are non-resident entities in Vietnam, except as provided in Clauses 4 and 5, Article 4 of the Value Added Tax Law 2024 (Effective from July 1, 2025);

Organizations producing, doing business in Vietnam that purchase goods and services for conducting search, exploration, development of oil and gas fields from foreign organizations without permanent establishments in Vietnam or individuals abroad who are non-resident entities in Vietnam.

- Foreign suppliers without permanent establishments in Vietnam engaging in e-commerce, digital platform-based business with organizations, individuals in Vietnam (hereinafter referred to as foreign suppliers); organizations that are managers of foreign digital platforms implementing VAT deduction, payment for foreign suppliers; business organizations in Vietnam applying the VAT credit method which purchase services from foreign suppliers without permanent establishments in Vietnam through e-commerce channels, or digital platforms implementing VAT deduction, payment for foreign suppliers.

- Organizations that are managers of e-commerce trading floors, managers of digital platforms with payment functions implementing VAT deduction, paying tax on behalf of business households, individual businesses on e-commerce platforms, and digital platforms.

Note: The Government of Vietnam shall detail Clauses 1, 4, and 5, Article 4 of the Value Added Tax Law 2024 (Effective from July 1, 2025); stipulate the tax payer in cases where a foreign supplier provides services to buyers that are business organizations in Vietnam applying the credit method specified in Clause 4, Article 4 of the Value Added Tax Law 2024 (Effective from July 1, 2025).