Goods and services exported from the Vietnam market to the free trade zone apply the VAT rate of 0%

Goods and services exported from the Vietnam market to the free trade zone apply the VAT rate of 0%(Illustrative image)

Under Circular 10/2007/TT-BTC, business entities investing in Phu Quoc island may use VAT invoices according to the applicable regulations and make registration, declaration, and payment of VAT as prescribed. Where goods are not VAT-liable objects, the VAT line on the VAT invoice shall be crossed out (x). To be specific:

- Goods and services produced and consumed within the free trade zone and imported from abroad into the free trade zone and vice versa are not VAT-liable objects.

- Goods and services transferred from free trade zone to or sold to export processing zones and vice versa are not VAT-liable objects.

- Goods and services exported from the Vietnam market to the free trade zone apply the VAT rate of 0%.

- Goods and services imported from the free trade zone into the Vietnam market must bear VAT for imports at the prevailing tax rates. Enterprises in the free trade zone, when selling to enterprises, organizations, or individuals within the Vietnam market, shall issue invoices without VAT, and the tax rate and VAT lines are crossed out. Enterprises, organizations, or individuals within the Vietnam market (or enterprises in the Phu Quoc free trade zone when self-carrying goods into the Vietnam market for sale) are only required to pay VAT on imports based on the customs declaration when carrying out import procedures into the Vietnam market.

Further details may be found in Circular 10/2007/TT-BTC effective from March 7, 2007.

Ty Na

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