Cases where the VAT rate of 5% is applied in Vietnam
In what cases does the VAT rate of 5% apply? Which documents regulate these cases?
Doan Minh Kha (kha***@gmail.com)
Cases where the VAT rate of 5% is applied in Vietnam (Image from the Internet)
According to the provisions of Clause 2, Article 6 of Decree 209/2013/ND-CP guiding implementation of a number of articles of Law on value-added tax:
The tax rate of 5% is applied to the goods and services defined in Clause 2, Article 8 of the Law on Value-Added Tax, and Clause 3 Article 1 of Law amending and supplementing a number of articles of Law on Value-Added Tax. Some cases apply the value-added tax rate of 5% are specified as follows:
a) Clean water for production and daily life specified at Point a Clause 2 Article 8 of the Law on Value-Added Tax excludes bottled drinking water and other beverages which are subject to the tax rate of 10%.
b) Products specified at Point b Clause 2 Article 8 of the Law on Value-Added Tax include:
- Fertilizers, including organic fertilizers, inorganic fertilizers, microbiological fertilizers and other fertilizers;
- Ores for fertilizer production, including those used as raw materials for fertilizer production;
- Pesticides including plant protection drugs and other drugs for prevention against pests;
- Plant and animal growth stimulants.
c) Feeds for cattle, poultry and other domestic animals specified at Point c, Clause 2, Article 8 of the Law on Value-Added Tax include processed or unprocessed products, such as: bran, offal, assorted oil cakes, fish paste, bone meal.
d) Product preliminary processing and preservation services specified at Point d, Clause 2, Article 8 of the Law on Value-Added Tax include: drying, peeling, pitting, slicing, grinding, freezing, salting or other ordinary methods of preservation.
dd) Fresh and live foods specified at Point g, Clause 2, Article 8 of the Law on Value-Added Tax include foods not yet cooked or processed into other products.
Unprocessed forest products specified at Point g, Clause 2, Article 8 of the Law on Value-Added Tax include exploited natural forest products of group: rattan, bamboo, mushrooms, Jew's ear, roots, leaves, flowers, medicinal plants, resin and other forest products.
e) Pharmaco-chemical products and pharmaceuticals used as raw materials for the manufacture of curative and preventive medicines specified at Point 1, Clause 2, Article 8 of the Law on Value-Added Tax.
g) Social houses specified at point q Clause 2, Article 8 of the Law on Value-Added Tax and Clause 3 Article 1 of Law amending and supplementing a number of articles of Law on Value-Added Tax are houses which are invested and built by state or organizations and individuals of all economic sectors and met the criteria on houses, sale price, rent, price of rent for purchase, objects, conditions for purchase, rent, rent for purchase of social houses as prescribed by law on housing.
Above is the content of regulations on cases where the VAT rate of 5% is applied. For more information, you can refer to Decree 209/2013/ND-CP.
Best regards!
