Law on value-added tax (VAT) 2008 of Vietnam: Regulations on VAT rate

Specifically, according to Article 8 of the Law on VAT 2008 of Vietnam, tax rates are prescribed as follows:

1. The tax rate of 0% applies to exported goods and services, international transportation and goods and services not liable to value-added tax specified in Article 5 of this Law upon exportation, except cases of transfer of technologies or intellectual property rights abroad; offshore reinsurance services; credit provision, capital transfer and derivative financial services; post and telecommunications services; and exported products which are unprocessed mined resources and minerals.

2. The tax rate of 5% applies to the following goods and services:

- Clean water for production and daily life;

- Fertilizers; ores for fertilizer production; insecticides, pesticides and plant and animal growth stimulators;

- Feeds for cattle, poultry and other domestic animals;

- Services of digging, embanking and dredging canals, ditches, ponds and lakes for agricultural production; growing, tending, and preventing pests and insects for, plants; preliminary processing and preservation of agricultural products;

- Unprocessed cultivation, husbandry and fishery products, except products specified in Clause 1, Article 5 of Law on VAT 2008;

- Preliminarily processed rubber latex; preliminarily processed turpentine; nets, main ropes and fibers for making fishing-nets;

- Fresh and live food; unprocessed forest products, except timber, bamboo shoots and products specified in Clause 1, Article 5 of Law on VAT 2008;

- Sugar; by-products in sugar production, including molasses, bagasse and sludge;

- Products made of jute, rush, bamboo, leaf, straw, coconut husks and shells and Eichhornia crassipes, and other handicrafts made of agricultural raw materials; preliminarily processed cotton; paper for newspaper printing;

- Special-purpose machinery and equipment for agricultural production, including ploughing machines, harrowing machines, rice-planting machines, seeding machines, rice-plucking machines, reaping machines, combine harvesters, agricultural product harvesters, insecticide or pesticide pumps or sprayers;

- Medical equipment and instruments; medical cotton and bandage; preventive and curative medicines; pharmaco-chemistry products and pharmaceuticals used as raw materials for the production of curative and preventive medicines;

- Teaching and learning aids, including models, figures, boards, chalk, rulers, compasses, and equipment and tools exclusively used for teaching, research and scientific experiments;

- Cultural, exhibition, physical training and sports activities; art performances; film production; film import, distribution and screening;

- Children toys; books of all kinds, except books specified in Clause 15, Article 5 of Law on VAT 2008;

- Scientific and technological services under the Law on Science and Technology.

3. The tax rate of 10% applies to remaining goods and services.

View more details at the Law on VAT 2008 of Vietnam, effective from January 01, 2009.

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