From July 1, 2025, what is the VAT rate for traditional and folk performing arts activities in Vietnam?
From July 1, 2025, what is the VAT rate for traditional and folk performing arts activities in Vietnam?
Pursuant to Clause 2, Article 9 of the Law on Value-Added Tax 2024 stipulating the tax rates:
Article 9. Tax rates
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- A tax rate of 5% applies to the following goods and services:
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h) Medical equipment as prescribed by the law on management of medical equipment; preventive and curative drugs; pharmaceutical substances and materials used for the production of preventive and curative drugs;
i) Teaching and learning equipment including models, drawings, boards, chalk, rulers, and compasses;
k) Traditional and folk performance art activities;
l) Toys for children; all types of books, except for those specified in Clause 15, Article 5 of this Law;
m) Scientific and technological services as prescribed by the Law on Science and Technology;
n) Sale, lease, lease-purchase of social housing as prescribed by the Law on Housing.
According to the above regulation, traditional and folk performance art activities are subject to a 5% value-added tax rate.
From July 1, 2025, what is the VAT rate for traditional and folk performing arts activities in Vietnam? (Image from the Internet)
What are regulations on the value-added tax base in Vietnam?
Pursuant to Article 7 of the Law on Value-Added Tax 2024 stipulating the value-added tax base:
- For goods and services sold by the business establishment, it is the selling price excluding value-added tax.
- For goods and services subject to special consumption tax, it is the selling price including special consumption tax, but excluding value-added tax.
- For goods subject to environmental protection tax, it is the selling price including environmental protection tax, but excluding value-added tax.
- For goods subject to both special consumption tax and environmental protection tax, it is the selling price including both taxes but excluding value-added tax.
- For imported goods, it is the taxable import value as prescribed by the law on export and import tax plus import tax and any supplementary import taxes as prescribed by law (if any), along with special consumption tax (if any) and environmental protection tax (if any).
- For goods and services used for exchanges, internal consumption, gifts, and donations, it is the value-added tax base for goods and services of the same kind or equivalent at the time of these activities occurring.
- For promotional goods and services as prescribed by commercial law, the tax base is determined at zero (0).
- For asset lease activities, it is the leasing amount excluding value-added tax.
- If leasing is made on a periodic payment or prepaid rent for the lease term, the tax base is the rent amount paid periodically or prepaid for the lease term excluding value-added tax.
- For goods sold by installments, deferred payment, it is based on the lump-sum selling price excluding value-added tax, excluding installment or deferred payment interest.
- For processing goods, it is the processing fee excluding value-added tax.
- For construction and installation activities, it is the value of the work, project items, or parts handed over excluding value-added tax. In the case of construction and installation without material, machinery, or equipment supply, the tax base does not include the value of materials and machinery, and equipment.
- For real estate business activities, it is the selling price of real estate excluding value-added tax, minus the land levy or land rent paid to the state budget (land price deduction). The Government of Vietnam regulates the determination of the deductible land price under this clause in accordance with land law.
- For agency, brokerage activities earning commissions on goods and service sales, it is the commission earned excluding value-added tax.
- For goods and services using an invoice that records the payment price as the price including value-added tax, the taxable price is determined using the following formula:
Price excluding value-added tax = Payment price : [1 + tax rate of goods, services (%)]
- For casino, electronic game services with prizes, and betting, it is the amount collected from these activities minus the amount returned to customers not fully used and the prize amounts paid to customers (if any), including special consumption tax, excluding value-added tax.
- For the following production and business activities, it is the selling price excluding value-added tax. The Government of Vietnam stipulates the taxable price for such production and business activities specified in this clause:
+ Electricity production by Vietnam Electricity Group
+ Transport and loading services
+ Tourism services in the form of travel
+ Pawn services
+ Value-added tax-rated books sold at the correct published price (cover price)
+ Printing activities
+ Agency inspection, agency appraisal services, agency claim settlement, agency recovery from third-party agents, handling fully compensated goods 100% benefiting from wages or commission
Note: The taxable price for the above-mentioned goods and services includes any surcharges and fees payable to the business establishment.
What is the timing of determining value-added tax for services in Vietnam?
Pursuant to Article 8 of the Law on Value-Added Tax 2024 stipulating the timing for determining value-added tax:
Article 8. Timing for determining value-added tax
- The timing for determining value-added tax is prescribed as follows:
a) For goods, it is the time of transferring ownership or right to use the goods to the buyer or at the time the invoice is made, regardless of whether payment has been collected or not;
b) For services, it is the time of completing the provision of services or the time the invoice for services is made, regardless of whether payment has been collected or not.
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The timing for determining value-added tax for services is the time of completion of the service provision or the time of invoice issuance for services, regardless of whether payment has been collected or not.
However, for the following services, the timing for determining value-added tax is stipulated by the Government of Vietnam:
- Telecommunication services
- Insurance business services
