VAT applies to goods and services used for production, trading, and consumption in Vietnam (including goods and services purchased from non-residents), with certain exemptions. Depending on the category of goods or services, the VAT rates are as follows: Show
On 28 January 2022, the government released Decree 15/2022, providing a 2% VAT reduction for goods and services that are currently subject to 10% VAT (with certain exceptions) for the period from 1 February 2022 to 31 December 2022. Goods or services where VAT declaration and payment are not requiredA separate category includes supplies not subject to output VAT, but where related input VAT can, nevertheless, be credited. This category includes the following:
Exempt goods and servicesThere are stipulated categories of VAT exemptions, including certain agricultural products; goods/services provided by individuals having annual revenue of 100 million Vietnamese dong (VND) or below; imported or leased drilling rigs, aeroplanes, and ships of a type that cannot be produced in Vietnam; transfer of land use rights (LUR) (detailed guidance is provided to specific cases); various financial services; various securities activities including fund management; capital assignments; foreign currency trading; debt factoring; certain types of insurance; medical services and elderly/disabled people care service; education, printing/publishing, public transportation, export of unprocessed natural resources, etc. When a supply cannot be readily classified based on the tax tariff, VAT must be calculated based on the highest rate applicable for the particular range of goods that the business supplies. Taxpayers must file VAT returns on a monthly basis by the 20th day of the subsequent month or on a quarterly basis by the last day of the first month of the following quarter (for companies with prior year annual revenue of VND 50 billion or less). E-invoicesThe government has released an official Decree on e-invoicing in September 2018, which became effective since 1 November 2018 (Decree 119). In addition, Circular 68/2019/TT-BTC guiding the implementation of Decree 119 on e-invoicing was released (Circular 68) in October 2019 and took effect from 14 November 2019. Decree 119 and Circular 68 make e-invoices compulsory for all enterprises from 1 November 2020. However, on 19 October 2020, the government issued Decree 123/2020 (Decree 123) guiding invoices and documents, which extends the deadline for compulsory implementation of e-invoices from 1 November 2020 until 1 July 2022. Decree 123 will take effect from 1 July 2022, but taxpayers that meet the technology infrastructure requirements are encouraged to implement e-invoices and e-documents as regulated in this Decree before the deadline of 1 July 2022. On 17 September 2021, the MoF released a new Circular 78/2021 (Circular 78), guiding certain provisions of the Law on Tax Administration 38/2019 and Decree 123/2020 on invoices and documents. Both Decree 119 and Circular 68 will expire by 30 June 2022 and will be replaced by Decree 123 and Circular 78. From 1 July 2022 onwards, all businesses, economic organisations, business households, and individuals paying tax under the declaration method must use e-invoices (except for certain cases). E-invoices with a verification code'High tax risk enterprises' are required to use e-invoices with a verification code continuously for 12 months. High risk enterprises are defined as those that have equity of less than VND 15 billion and have certain features, for example:
The 'high tax risk enterprise' status will then be re-assessed after 12 months for possible approval for using e-invoices without a verification code. The requirements for data transmission to the tax authorities and the use of e-invoices with a verification code under Clause 12, Article 5 of Decree 12/2015 is abolished. E-invoices without a verification codeEnterprises that are allowed to use e-invoices without a verification code of the tax authorities will be determined based on the economic sectors as regulated, such as electricity, petrol, telecommunication, transportation, credit institutions, insurance, e-commerce, supermarkets, etc., and satisfaction of certain conditions. Enterprises using e-invoice without a verification code must transfer e-invoice data to the tax authorities, either directly or via an authorised e-invoicing service provider. If the enterprises transfer data directly to the tax authorities’ portal, certain technical conditions for connection with the tax authorities’ portal must be satisfied. Before using e-invoices (either with or without a verification code), enterprises must register and obtain approval from the tax authorities via the web portal of the GDT. Timing of implementing e-invoicesThe compulsory use of e-invoices is extended to 1 July 2022. During the transition period up to 31 June 2022, the current invoicing regulations (i.e. Decree 51/2010, Decree 04/2014 amending Decree 51/2010, and Decree 119/2018) still apply, and enterprises can continue to use current invoices until receipt of a notification from the tax authorities. Customs dutiesCustoms duties generally comprise import duty and import VAT. Most goods imported into Vietnam are subject to import duty and import VAT, except those that meet the conditions for exemption, such as goods imported for the production of subsequently exported goods under toll manufacturing or contract manufacturing arrangements, goods imported to form fixed assets of incentivised investment projects (in this case import VAT is not exempted), etc. In addition to import duty and import VAT, there are also export duty, import special sales tax (SST), environment protection tax (EPT), anti-dumping tax, anti-subsidy tax, and safeguard tax, which are applied to only a limited number of goods. Anti-dumping tax, anti-subsidy tax, and safeguard tax are all considered as supplemental import duties applicable to the imported goods under certain scenarios. Import duty is computed on an ad valorem basis (i.e. multiplying the imported good’s dutiable value by the corresponding import duty rate). Import duty rates are classified into three categories: ordinary rates, preferential rates, and special preferential rates. Preferential rates are applicable to imported goods from countries that have most-favoured-nation (MFN, also known as normal trade relations) status with Vietnam. The MFN rates are in line with Vietnam’s World Trade Organization (WTO) commitments and are applicable to goods imported from other WTO member countries. Special preferential rates are applicable to imported goods from countries that have a special preferential trade agreement (or free trade agreement [FTA]) with Vietnam. Currently, effective FTAs to which Vietnam is a party include:
In addition, negotiations on the FTA betwen Vietnam and Israel is in progress. To be eligible for preferential rates or special preferential rates, the imported goods must be accompanied by an appropriate Certificate of Origin or equivalent origin documents. When goods are sourced from non-preferential treatment/non-favoured countries, the ordinary rate (being the MFN rate with a 50% surcharge) is imposed. Import VAT is applied to imported goods at a rate most commonly of 10%. Export duties are charged only on a few items, basically certain natural resources. Rates range from 0% to 40%. Special sales tax (SST)SST is a form of excise tax that applies to selected goods and services. Goods that are manufactured and/or imported into Vietnam and subject to SST include cigars/cigarettes, spirits, wine and beer, automobiles, motorcycles, air conditioners, airplanes, petrol, etc. For goods, SST is charged at the production or importation stage. Imported goods (except for various types of petrol) are subject to SST at both the import and selling stages. The SST paid at importation will be creditable against SST paid at the selling stage. The SST rates range from 7% for petrol to 75% for cigars/cigarettes. The National Assembly has just ratified a new law amending and supplementing a number of provisions under certain laws, including the Law on SST. Accordingly, SST rates applicable to electric cars will be significantly reduced over the next five years, effective from 1 March 2022. Due to the impact of COVID-19, the government issued a decree to extend the SST payment deadline for Vietnam locally manufactured or assembled automobiles, applicable for the period from June 2022 to September 2022. Property taxesForeign investors generally pay rental fees for land use rights. The range of rates is wide depending upon the location, infrastructure, and the industrial sector in which the business is operating. In addition, owners of houses and apartments have to pay land tax under the law on non-agricultural land use. The tax is charged on the specific land area used based on the prescribed price per square metre at progressive tax rates ranging from 0.03% to 0.15%. Stamp taxesCertain assets, including houses, land, automobiles and motorcycles, etc., that are subject to registration of ownership are subject to stamp duty. The stamp duty rates vary depending on the asset transferred. Payroll taxesPlease see the Other taxes section in the Individual tax summary. Natural resources tax (NRT)NRT is payable by industries exploiting Vietnam’s natural resources, including petroleum, minerals, natural gas, forest products, natural seafood, natural bird’s nests, and natural water. Natural water used for agriculture, forestry, fisheries, salt industries, and sea water for cooling purposes may be exempt from NRT, provided that certain conditions are satisfied. The tax rates vary depending on the natural resource being exploited, ranging from 1% to 40%, and are applied to the production output at a specified taxable value per unit. Various methods are available for the calculation of the taxable value of the resources, including cases where the commercial value of the resources cannot be determined. Crude oil, natural gas, and coal gas are taxed at progressive tax rates depending on the daily average production output. Environment protection tax (EPT)EPT is an indirect tax that is applicable to the production and importation of certain goods deemed detrimental to the environment, the most significant of which are petroleum and coal. The tax is calculated as an absolute amount on the quantity of the goods. Since 1 January 2019, the tax rates vary among the goods applied from VND 500/kg for restricted use chemicals to VND 50,000/kg for plastic bags. In November 2020, the National Assembly approved the new law on environmental protection, which will take effect from 1 January 2022. There is no specific change to the above EPT rates stated under this new law. Does Vietnam have trade barriers?Vietnam eliminated many non-tariff barriers under the 2001 United States-Vietnam Bilateral Trade Agreement (BTA) and through its accession to the WTO, including quantitative restrictions on imports, quotas, bans, permit requirements, prior authorization requirements, licensing requirements, and other restrictions ...
What are the top 3 imports of Vietnam?Industry Snapshots. Does Vietnam gain or loss from trade?Vietnam Posts Smallest Trade Surplus in 4 Months
Considering the first eleven months of the year, the trade goods posted a surplus of USD 10.6 billion, with exports increasing by 13.4 percent from a year earlier to USD 342.21 billion while imports grew 10.1 percent to USD 331.61 billion.
Is antidumping a measure of protection for domestic country?The use of anti dumping measure as an instrument of fair competition is permitted by the WTO. In fact, anti dumping is an instrument for ensuring fair trade and is not a measure of protection per se for the domestic industry. It provides relief to the domestic industry against the injury caused by dumping.
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