Hanoi, Vietnam: Applying 5% VAT rate to scientific, technological contracts and tasks of the Institute of Monuments Conservation?
What is the tax rate for science and technology services in Vietnam?
According to Article 10 of Circular 219/2013/TT-BTC stipulating:
“Article 10. Tax rate of 5%
10% tax shall be levied on the goods and services below:
1. Clean water serves manufacturing and everyday life, except for bottled water and other soft drinks subject to 10% tax.
..
12. Teaching aids include models, pictures, boards, chalks, rulers, compasses, other equipment and instruments for teaching, research, and scientific experimentation.
13. Artistic activities, exhibitions, sports; art performances; cinematography; importing, distributing, and showing films.
a) Revenues from activities, exhibitions, sports do not include the revenues from goods sale, lease on yards or exhibition booths.
b) Art performances and art performance organization services must be licensed by competent authorities.
c) Cinematography; importing, distributing, and showing films
14. Children’s toys; books other than those that are not subject to VAT mentioned in Clause 15 Article 4 of this Circular.
15. Scientific and technological services, which mean the activities that serve or assist in scientific research and technology development; the activities related to intellectual property; transfer of technologies, technical regulations and standards related to measurement, product quality, goods, nuclear and radiation safety, and atomic energy; consultancy, training, dissemination, and application of scientific and technological achievements to socio-economic fields under contracts for scientific and technological services defined in the Law on Science and technology, not including online games and Internet-based entertainments.
16. Sale, lease, and lease-option of social housing according to the Law on Housing. Social housing means the housing invested by the state or the organizations and individuals from various economic sectors, which satisfy the criteria for housing in terms of selling prices, rents, and eligible buyers according to housing laws.”
Thus, science and technology services are activities serving and providing technical support for scientific research and technological development under science and technology service contracts, subject to the tax rate of 5%.
Hanoi, Vietnam: Applying 5% VAT rate to scientific, technological contracts and tasks of the Institute of Monuments Conservation?
Does the Hanoi Tax Department answer VAT policy for contracts, scientific and technological tasks of the Institute for Monuments Conservation in Vietnam?
According to Official Dispatch 27132/CTHN-TTHT in 2022 on the value-added tax policy for science and technology services issued by the Hanoi Tax Department, guiding:
Pursuant to Clause 15, Article 10 of Circular 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance guiding the VAT law and Decree 209/2013/ND-CP dated December 18, 2013 of the Government guiding About 5% VAT rate:
- Science and technology services mean activities serving and providing technical support for scientific research and technological development; activities related to intellectual property; technology transfer, standards, technical regulations, measurement, product and goods quality, radiation safety, nuclear and atomic energy; services on information, consulting, training, fostering, dissemination and application of scientific and technological achievements in the socio-economic fields under the contract of science and technology services specified in Law of Science and technology of Vietnam, excluding online games and Internet entertainment services.
Pursuant to the above provisions, in case the Institute for Monuments Conservation is a scientific and technological non-business unit providing science and technology services under the contract of science and technology services specified in the Law on Science and Technology, technology, these services are subject to the VAT rate of 5% as guided in Clause 15, Article 10 of Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance of Vietnam.
What is the guideline to 5% VAT rate in Vietnam?
According to Clause 2, Article 6 of Decree 209/2013/ND-CP stipulates:
The tax rate of 5% applies to goods and services specified in Clause 2, Article 8 of the Law on Value-Added Tax:
"2. The tax rate of 5% applies to the following goods and services:
a/ Clean water for production and daily life;
b/ Fertilizers; ores for fertilizer production; insecticides, pesticides and plant and animal growth stimulators;
c/ Feeds for cattle, poultry and other domestic animals;
d/ Services of digging, embanking and dredging canals, ditches, ponds and lakes for agricultural production; growing, tending, and preventing pests and insects for, plants; preliminary processing and preservation of agricultural products;
e/ Unprocessed cultivation, husbandry and fishery products, except products specified in Clause 1, Article 5 of this Law;
f/ Preliminarily processed rubber latex; preliminarily processed turpentine; nets, main ropes and fibers for making fishing-nets;
g/ Fresh and live food; unprocessed forest products, except timber, bamboo shoots and products specified in Clause 1, Article 5 of this Law;
h/ Sugar; by-products in sugar production, including molasses, bagasse and sludge;
i/ Products made of jute, rush, bamboo, leaf, straw, coconut husks and shells and Eichhornia crassipes, and other handicrafts made of agricultural raw materials; preliminarily processed cotton; paper for newspaper printing;
j/ Special-purpose machinery and equipment for agricultural production, including ploughing machines, harrowing machines, rice-planting machines, seeding machines, rice-plucking machines, reaping machines, combine harvesters, agricultural product harvesters, insecticide or pesticide pumps or sprayers;
k/ Medical equipment and instruments; medical cotton and bandage; preventive and curative medicines; pharmaco-chemistry products and pharmaceuticals used as raw materials for the production of curative and preventive medicines;
l/ Teaching and learning aids, including models, figures, boards, chalk, rulers, compasses, and equipment and tools exclusively used for teaching, research and scientific experiments;
m/ Cultural, exhibition, physical training and sports activities; art performances; film production; film import, distribution and screening;
n/ Children toys; books of all kinds, except books specified in Clause 15, Article 5 of this Law;
o/ Scientific and technological services under the Law on Science and Technology."
Thus, for contracts, scientific and technological tasks of the Institute of Monuments Conservation, the VAT rate of 5% will be applied.
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