Goods and Services from Domestic Export to the Non-Tariff Zone are Eligible for 0% VAT

Goods and services from the domestic market exported to the bonded zones enjoy 0% VAT (Illustrative image)

To be specific, Circular 10/2007/TT-BTC stipulates that business production establishments investing in Phu Quoc island are allowed to use value-added tax invoices according to the existing regulations, perform registration, declaration, and payment of value-added tax as prescribed. For cases where goods are not subject to value-added tax, the value-added tax line on the VAT invoice shall be crossed out (x). To be specific, as follows:

- Goods and services produced and consumed within the bonded zones and imported from abroad into the bonded zones and vice versa are not subject to value-added tax.- Goods and services transferred from bonded zones to or sold to export processing zones and vice versa are not subject to value-added tax.- Goods and services from domestic Vietnam exported to the bonded zones enjoy a 0% VAT rate.- Goods and services imported from bonded zones into domestic Vietnam must bear value-added tax for imports at the prevailing tax rates. To be specific, enterprises in bonded zones when selling to enterprises, organizations, or individuals within domestic Vietnam shall issue invoices without value-added tax, and the tax rate and value-added tax lines are crossed out. Enterprises, organizations, or individuals in the domestic market (or bonded zone enterprises in Phu Quoc island when self-carrying goods into the domestic market for sale) are only required to pay value-added tax for imports based on the customs declaration when performing import procedures into the domestic market.

For further details, see Circular 10/2007/TT-BTC effective from March 7, 2007.

Ty Na

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