Are goods sold at duty-free shops subject to value-added tax in Vietnam?

Are goods sold at duty-free shops subject to value-added tax in Vietnam?

Pursuant to Article 9 of the Law on Value-Added Tax 2024 stipulating the tax rates:

Article 9. Tax Rates

1. The 0% tax rate applies to the following goods and services:

a) Exported goods include: goods exported from Vietnam sold to organizations or individuals abroad and consumed outside of Vietnam; goods sold domestically in Vietnam to organizations in non-tariff zones and consumed within these zones directly serving export production activities; goods sold in isolated areas to individuals (foreigners or Vietnamese) who have completed exit procedures; goods sold at duty-free shops;

b) Exported services include: services provided directly to organizations or individuals abroad and consumed outside Vietnam; services provided directly to organizations in non-tariff zones and consumed within these zones directly serving export production activities;

c) Other exported goods and services include: international transport; leasing of transport means used outside the territory of Vietnam; aviation and maritime services provided directly or through agents for international transport; construction, installation works abroad or in non-tariff zones; digital content products supplied to foreign parties and having documentation and evidence proving consumption outside Vietnam as regulated by the Government of Vietnam; spare parts, materials supplied for repairing, maintenance of means, machinery, equipment for foreign parties and consumed outside Vietnam; processed goods for export as per the law; goods and services not subject to value-added tax when exported, excluding cases not applying the 0% tax rate specified at point d of this clause;

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According to the above regulation, goods sold at duty-free shops are subject to a value-added tax rate of 0%.

Are goods sold at duty-free shops subject to value-added tax in Vietnam?​ (Image from the Internet)

Who is liable to pay value-added tax in Vietnam?

Pursuant to Article 4 of the Law on Value-Added Tax 2024 stipulating taxpayers:

Article 4. Taxpayers

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

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

3. Organizations, individuals doing business in Vietnam purchasing services (including cases of purchasing services associated with goods) from foreign organizations without permanent establishments in Vietnam, individuals abroad who are non-residents in Vietnam, except as provided in clauses 4 and 5 of this Article; organizations doing business in Vietnam purchasing goods and services to conduct oil and gas exploration, development and exploitation activities from foreign organizations without permanent establishments in Vietnam, individuals abroad who are non-residents in Vietnam.

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Thus, those liable to pay value-added tax include:

[1] Organizations, households, individuals producing, trading goods, services subject to value-added tax

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

[3] Organizations, individuals doing business in Vietnam purchasing services (including cases of purchasing services associated with goods) from foreign organizations without permanent establishments in Vietnam, individuals abroad who are non-residents in Vietnam, except [4] [5]

Organizations doing business in Vietnam purchasing goods and services to conduct oil and gas exploration, development activities from foreign organizations without permanent establishments in Vietnam, individuals abroad who are non-residents in Vietnam.

[4] Foreign suppliers without a permanent establishment in Vietnam conducting e-commerce business, conducting business based on a digital platform with organizations, individuals in Vietnam (hereinafter referred to as foreign suppliers);

Organizations managing digital platforms abroad execute withholding, paying on behalf of the tax obligations of foreign suppliers

Organizations doing business in Vietnam applying the method of calculating value-added tax using the credit method purchase services from foreign suppliers without permanent establishments in Vietnam through e-commerce or digital platforms to execute withholding, paying on behalf of the tax obligations of foreign suppliers.

[5] Organizations managing e-commerce exchange floors, digital platform managers with payment functions execute withholding, paying tax on behalf, declaring the tax amount withheld for business households, individuals doing business on e-commerce exchange floors, digital platforms.

What is the Form 04 - Value-added tax declaration according to Circular 80?

According to Form 04/GTGT Appendix 2 issued together with Circular 80/2021/TT-BTC stipulating the value-added tax declaration form:

Download the Form 04 - Value-added tax declaration according to Circular 80.