What are VAT rates in Vietnam in 2024? What goods and services are subject to each VAT rate?
What are VAT tax rates in Vietnam in 2024?
Pursuant to the provisions of the Law on Value Added Tax 2008, guided by Article 9, Article 10, Article 11 of Circular 219/2013/TT-BTC and Resolution 110/2023/QH15, the tax rates will apply in 2024 in the following 2 stages:
- The period from January 1, 2024 to June 30, 2023 will apply 04 tax rates: 0%, 5%, 8% and 10%.
- The period from July 1, 2023 to December 31, 2023 will apply 03 tax rates: 0%, 5% and 10%.
What are VAT tax rates in Vietnam in 2024? What goods and services are subject to each VAT rate?
What goods and services are subject to VAT rate of 0% in Vietnam?
Currently, there is no policy to adjust VAT for goods that are subject to a 0% VAT rate, so the regulation on subjects subject to the 2024 0% VAT rate in Clause 1, Article 8 of the Law on Value Added Tax 2008 and instructions in Article 9 of Circular 219/2013/TT-BTC (amended by Clause 2, Article 1 of Circular 130/2016/TT-BTC) are subject to the 0% VAT rate, including:
Tax rate of 0%
1. 0% VAT is applied to exported goods and services; construction and installation overseas and in free trade zones; international transport; exported goods and services that are not subject to VAT, except for the cases in Clause 3 of this Article, in which 0% VAT is not applied.
Exported goods and services are those that are sold to overseas organizations and individuals and are consumed outside Vietnam, sold to the entities in free trade zones, or sold to foreign customers as prescribed by law.
a) Exported goods include:
- The goods exported to other countries, including those under entrustment contracts;
- The goods sold to free trade zones as prescribed by the Prime Minister; the goods sold to duty-free shops;
- The goods that are delivered to the recipients outside Vietnam;
- Parts and supplies for repairing, maintaining vehicles, machinery, and equipment of foreign entities, and those that are used outside Vietnam;
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2. Condition for application of 0% tax:
a) The documents below are compulsory for exported goods:
- A sale contract, export processing contract, or export entrustment contract;
- Bank receipts for payment for exported goods and other documents prescribed by law;
- A customs declaration prescribed in Clause 2 Article 16 of this Circular.
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3. The tax rate of 0% is not applicable to:
- Overseas reinsurance; technology transfer, overseas transfer of intellectual property; capital transfer, granting of credit, outward securities investment; financial derivatives services; outbound postal and telecommunications services (including those provided for the entities in free trade zones; provision of sale of prepaid phone cards abroad or in free trade zones); exports that are or originate from natural resources and minerals as per Section 23, Article 4 of the Circular; tobacco and alcoholic beverages imported then re-exported; goods and services provided for individuals who have not registered any business in free trade zones, except circumstances that the Prime Minister defines;
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Accordingly, the group of goods that meet the above conditions will be subject to a value-added tax rate of 0%.
What goods and services are subject to VAT rate of 5% in Vietnam?
Up to now, there is no policy to adjust VAT for goods that are subject to a 5% VAT rate, so in 2024 the regulation on subjects subject to the 5% tax rate in Clause 2 of Article 8 of Law on Value Added Tax 2008 and guidance in Article 10 of Circular 219/2013/TT-BTC (amended by Clause 6 and Clause 7, Article 1 of Circular 26/2015/TT-BTC and Article 1 of Circular 43/2021/TT-BTC), including:
Tax rate of 5%
10% tax shall be levied on the goods and services below:
1. Clean water serving manufacture and everyday life, except for bottled water and other soft drinks subject to 10% tax.
2. Fertilizers; ores used for fertilizer manufacture; pesticides and Growth stimulants for plants and animals, including:
a) Organic and inorganic fertilizers such as phosphate fertilizers, nitrogenous fertilizer (urea), NPK fertilizer, mixed urea, potash; biofertilizers and other fertilizers;
b) Ores used for manufacture of fertilizers such as apatite ore, humus used for manufacture of biofertilizers;
c) Pesticides those in the List of pesticides complied by the Ministry of Agriculture and Rural Development and other pesticides;
d) Growth stimulants for plants and animals.
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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.
Accordingly, the goods and services specified above will be subject to a value-added tax rate of 5%.
What goods and services are subject to VAT rate of 10% in Vietnam?
Up to now, there is no policy on subjects subject to the 10% VAT rate, so in 2024 the regulation on subjects subject to the 10% tax rate in Clause 3, Article 8 of the Law on Value Added Tax 2008 and guidance in Article 11 of Circular 219/2013/TT-BTC stipulates as follows:
Tax rate of 10%
10% tax shall be levied on the goods and services that are not mentioned in Article 4, Article 9 and Article 10 of this Circular.
The rates of VAT mentioned in Article 10 and Article 11 shall be uniformly applied to the each type of goods and services, whether they are imported, manufactured, processed, or traded.
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If a taxpayer sells various goods and services that are subject to various rates of VAT, they must be sorted by VAT rates. Otherwise, the highest rate of VAT among which shall apply.
If the rate of VAT in the preferential import tariff schedule is found not conformable with this Circular, this Circular shall apply. If different rates of VAT are applied to the same kind of goods that are imported or manufactured in Vietnam, the local tax authority and customs authority must send a report to the Ministry of Finance for guidance.
Accordingly, the 10% VAT rate will be applied to goods and services that are not subject to value-added tax, subject to 5% tax, 0% tax, and subject to the 8% VAT rate.
What goods and services are subject to VAT rate of 8% in Vietnam?
On the morning of November 29, 2023, at the closing session of the 6th Session of the 15th National Assembly, the National Assembly passed the Resolution on the 6th Session of the 15th National Assembly, which includes the content of VAT reduction for 2024.
The National Assembly agreed to continue reducing the value added tax rate by 2% according to Resolution 43/2022/QH15 during the period from January 1, 2024 to June 30, 2024 for groups of goods and services applying the VAT rate of 10% (remaining 8%).
According to the provisions of Decree 44/2023/ND-CP stipulating the VAT reduction policy under Resolution 101/2023/QH15, goods and services currently subject to a 10% VAT rate will be reduced to 8%, except for some of the following goods and services:
- telecommunication, financial activities, banking activities, securities, insurance, trading of real estate, metal, precast metal products, mining products (excluding coal mining), coke mining, refined oil, chemical products;
- goods and services subject to excise tax: Cigarettes, cigars, wine, beer, cars with less than 24 seats, two-wheeled and three-wheeled motorbikes with a cylinder capacity of over 125 cm3, Airplanes, yachts, gasoline of all kinds...
- Information technology according to the law on information technology: Sound, video, network cards and similar cards used for automatic data processing machines, smart cards, computers and external devices computer micro...
The VAT reduction for each type of goods and services is applied uniformly at all stages of import, production, processing, and commercial business.
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