Which entities are not subject to Value-Added Tax? What is the Value-Added Tax rate for shrimp salt products?
Which entities are exempt from value-added tax?
Based on the provisions of Article 5, Law on Value-Added Tax 2008 (amended and supplemented by Clause 1, Article 3, Law on Amendments and Supplements to Tax Laws 2014, Clause 1, Article 1, Law on Value-Added Tax, Excise Tax, and Tax Administration Amendments 2016, and Clause 1, Article 1, Law on Amendments and Supplements to the Value-Added Tax Law 2013), the following items are not subject to value-added tax:
- Products from cultivation, livestock farming, aquaculture, captured seafood that have not been processed into other products or only undergone ordinary preliminary processing by organizations and individuals who self-produce and sell or import such products.
Enterprises and cooperatives that purchase products from cultivation, livestock farming, aquaculture, and captured seafood that have not been processed into other products or only undergone ordinary preliminary processing and sell them to other enterprises or cooperatives do not need to declare, calculate, and pay value-added tax but are entitled to deduction of input VAT.
- Breeding animals and plant varieties, including breeding eggs, seed, seedlings, genetic materials, saplings, and embryos.
- Watering, drainage; plowing, harrowing land; dredging intra-field canals to serve agricultural production; agricultural product harvesting services.
- Fertilizers; specialized machinery and equipment for agricultural production; offshore fishing vessels; feed for livestock, poultry, and other animals.
- Salt products produced from sea water, natural rock salt, refined salt, and iodized salt with a primary component of Sodium Chloride (NaCl).
- State-owned houses sold by the State to existing tenants.
- Transfer of land use rights.
- Life insurance, health insurance, student insurance, and other human-related insurance services; animal insurance, plant insurance, and other agricultural insurance services; vessel, equipment, and necessary tool insurance directly serving the catch of fisheries; reinsurance.
- Financial, banking, and securities services.
- Medical services, veterinary services, including examination, treatment, and disease prevention services for humans and animals; services for the care of the elderly and disabled.
- Public postal, telecommunications, and Internet services under a Government of Vietnam program.
- Maintenance services for zoos, gardens, parks, roadside trees, and public lighting; funeral services.
- Maintenance, repair, and construction funded by contributions from the public or humanitarian aid capital for cultural and artistic works, public-serving works, infrastructure, and housing for social policy beneficiaries.
- Teaching and vocational training according to legal regulations.
- Broadcasting services funded by the state budget.
- Publishing, importing, and distributing newspapers, magazines, professional bulletins, political books, textbooks, law books, science-technical books, books printed in ethnic minority languages, posters, banners, and leaflets for propaganda purposes, even in the form of audio or video tapes, visual recordings, electronic data; money and printing of money.
- Public passenger transport by bus or tram.
- Machinery, equipment, spare parts, and supplies that cannot be produced domestically and need to be imported for use directly in scientific research and technological development; specialized machinery, equipment, and transport means, and supplies that cannot be produced domestically and need to be imported for oil and gas exploration and operation activities; airplanes, drilling platforms, ships not produced domestically and need to be imported to form fixed assets of enterprises or leased from abroad for use in production, business, lease, or sublease.
- Specialized weapons and military equipment for national defense and security purposes.
- Imported goods in cases of humanitarian aid, non-refundable aid; gifts to state agencies, political organizations, socio-political organizations, socio-professional political organizations, social organizations, socio-professional organizations, People's Armed Forces units; gifts to individuals in Vietnam according to government regulations; items used by foreign organizations and individuals under diplomatic immunity regulations; items carried by people within the duty-free baggage allowance.
Goods and services sold to foreign organizations and individuals, and international organizations for humanitarian aid, non-refundable aid to Vietnam.
- Transit goods, goods temporarily imported for re-export, goods temporarily exported for re-import, and raw materials imported for producing and processing export goods.
- Technology transfer under the Law on Technology Transfer; assignment of intellectual property rights; computer software.
- Imported gold in bar and assorted forms not yet crafted into fine arts or jewelry products.
- Exported products are natural resources and minerals that have not been processed into other products; exported products are goods processed from natural resources and minerals where the total value of natural resources, minerals plus energy costs account for 51% of the product cost or more.
- Artificial products used to replace human body parts; crutches, wheelchairs, and other specialized aids for people with disabilities.
- Goods and services of households and individuals with annual turnover of one hundred million dong or less.
Which entities are exempt from value-added tax? What is the value-added tax rate for shrimp salt products? (Image from the Internet)
Are shrimp salt products exempt from value-added tax?
Based on the provisions at Clause 4, Article 5, Law on Value-Added Tax 2008 (amended and supplemented by Clause 1, Article 1, Law on Amendments and Supplements to the Value-Added Tax Law 2013):
Entities exempt from tax
...
4. Salt products produced from sea water, natural rock salt, refined salt, and iodized salt with a primary component of Sodium Chloride (NaCl).
Additionally, in Official Dispatch 51584/CT-TTHT 2022 on the application of the value-added tax rate for shrimp salt products:
+ Clause 4, Article 4 on tax-exempt entities:
“4. Salt products produced from sea water, natural rock salt, refined salt, and iodized salt with a primary component of Sodium Chloride (NaCl).”
+ Article 9 specifies a 0% tax rate.
+ Article 10 specifies a 5% tax rate.
+ Article 11 specifies a 10% VAT rate:
“The 10% tax rate applies to goods and services not specified in Articles 4, 9, and 10 of this Circular.”
Based on the above provisions, if Vietnam Salt One Member Limited Liability Company produces processed salt products such as salted apricots, chili salt, shrimp salt, salt for soaking feet, etc., these products are not covered under Clause 4, Article 4 of Circular 219/2013/TT-BTC dated December 31, 2013, of the Ministry of Finance, they are subject to a 10% VAT rate.
Since shrimp salt products do not primarily contain NaCl, they are subject to value-added tax at a rate of 10%.
Are shrimp salt products eligible for value-added tax reduction?
Based on the provisions at Clause 1, Article 1, Decree 15/2022/ND-CP on goods and services eligible for value-added tax reduction:
Value-added tax reduction
1. Reduce the value-added tax for goods and services currently subject to a 10% tax rate, except for the following groups of goods and services:
a) Telecommunications, financial activities, banking, securities, insurance, real estate business, metals and metal-formed goods, mineral products (excluding coal), coke, refined petroleum, chemical products. Specific details in Annex I attached to this Decree.
b) Products and services subject to special consumption tax. Specific details in Annex II attached to this Decree.
c) Information technology according to the law on information technology. Specific details in Annex III attached to this Decree.
Since shrimp salt products are subject to value-added tax and do not fall under the categories excluded from tax reduction, they are subject to a reduced value-added tax rate as specified in Clause 2, Article 1, Decree 15/2022/ND-CP at 8%.
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