List of VAT tax-liable goods of 0%, 5% and 10%

No.

Subjects of tax rate of 0%

Conditions of tax rate of 0%

1.

Exported goods include:

- Goods exported abroad, including those exported under entrustment contracts;

- Goods sold into non-tariff zones under the Prime Minister’s regulations; goods sold to duty-free shops;

- Sold goods that are delivered and received outside Vietnam;

- Spare parts used for repair and maintenance of vehicles, machinery, and equipment for foreign parties and consumed outside Vietnam;

- Cases regarded as exportation under the law:

+ Intermediary processed goods under commercial law regarding international goods trading and goods trading and processing agency with
foreign parties.

+  On-spot exports as prescribed by law.

+ Goods exported for sale at overseas fairs and exhibitions

- Having a contract on sale or processing of exported goods; or contract on export entrustment;

- Having documents of via-bank payment for exported goods, and other documents prescribed by law;

- Having customs declarations, particularly for the sale of goods that are delivered and received outside Vietnam, the business establishment (the seller) must have documents proving such delivery and receipt, e.g., a goods purchase contract signed with the overseas seller;  Goods sale contract signed with the purchaser; documents proving that goods are delivered and received outside Vietnam such as: Commercial invoice according to international practices, bill of lading, packing list, and certificate of origin, etc.; via-bank payment documents: Viabank payment document of the business establishment for the overseas seller, and via-bank payment document of the purchaser for the business establishment. 

2.

Exported services include:

- Services provided directly to overseas organizations and individuals and consumed outside Vietnam; or provided directly to organizations or individuals in non-tariff zones and consumed in non-tariff zones.

Overseas individuals are foreigners not residing in Vietnam and Vietnamese residing overseas and not present in Vietnam during the provision of services.  Organizations and individuals in non-tariff zones are those with business registration and other cases specified by the Prime Minister.

In case services are provided both inside and outside Vietnam while service contracts are signed between two taxpayers present in Vietnam or having resident establishments in Vietnam, the 0% tax rate applies only to the value of services provided outside Vietnam, except in the case of provision of insurance services for imported goods in which the 0% tax rate applies to the whole contractual value.

In case it is impossible to determine the value of services provided in Vietnam under the contract, the taxed price shall be determined based on the percentage (%) of expenses arising in Vietnam to total expenses. Service providers being taxpayers in Vietnam must have documents proving that services are provided outside Vietnam.

- Having a service provision contract with an organization or individual overseas or in a non-tariff zone;

- Having documents of via-bank payment for exported services and other documents prescribed by law;

Particularly for aircraft and seagoing ship repair services provided to foreign organizations and individuals, to be eligible for the 0% tax rate, aircraft and seagoing ships must, apart from meeting the above conditions on contract and payment documents, go through the import procedures upon their entry into Vietnam and export procedures upon completion of repair.

3.

International transportation covers transportation of passengers, luggage, and cargo on international routes from Vietnam to overseas or vice versa or from an overseas place to another, regardless of whether means of transport are available.  In case an international transportation contract covers domestic routes, international transportation also covers such domestic routes.

For example: Transportation company X in Vietnam, which has ships for international transportation, transports cargo from Singapore to the Republic of Korea.  Turnover from such transportation is turnover from international transportation.

- Having a lawful contract on the carriage of passengers, luggage, and cargo between the carrier and carriage lessee along international routes from Vietnam to abroad or vice versa or from one to overseas location.

 For carriage of passengers, the carriage contract is the ticket.  International transportation businesses shall comply with regulations on transportation.

Having documents on via-bank payment or other methods of payment regarded as via-bank payment.  Having documents on direct payment, for carriage of individual passengers.

4.

Aviation and maritime services provided directly to overseas organizations or through agents, including:

Aviation services eligible for the 0% tax rate:  Provision of in-flight meals; takeoff and landing; apron; aircraft security and protection; security screening of passengers, luggage and cargo; luggage conveyors in airport terminals; ground technical and commercial services; aircraft protection; aircraft pushback and towing; aircraft piloting; aerobridge lease; flight operations; transportation of flight crews, stewards and passengers within aprons; cargo loading and tally; and passenger service for international flights from Vietnamese airports (passenger service charges).

- Maritime services eligible for the 0% tax rate:  Seagoing ship towing; maritime piloting; maritime salvage; piers and floating wharves; loading and unloading; mooring and unmooring; opening and closing of hatch covers; cargo hold cleaning; tally and forwarding; and registration.

For aviation and maritime services:

- The 0% tax rate applies to aviation services at international airports, airfields and international air cargo terminals which satisfy the following conditions:

+ Having a service provision contract with, or a service provision request by, an overseas organization or a foreign airline.

+ Having documents on via-bank payment or other modes of payment regarded as via-bank payment.  For provision of services to a foreign organization or a foreign airline on an irregular, unscheduled and noncontractual basis, having documents on direct payment of such organization or airline.

The above conditions on contracts and payment documents do not apply to the provision of services to passengers on international flights departing from Vietnamese airports (passenger service charges).

- The 0% tax rate applies to maritime services at seaports that satisfy the following conditions:

+ Having a service provision contract with, or a service provision request by, an overseas organization or a shipping agent;

+ Having documents of via-bank payment of an overseas organization or a shipping agent, or other methods of payment regarded as via-bank payment

5.

Other goods and services include:

- Construction and installation of works overseas or in non-tariff zones;

- Goods and services not liable to VAT upon exportation, except the cases ineligible for the 0% tax rate; Repair of aircraft and seagoing ships for foreign organizations and individuals.

No.

Names of goods and services

1.

Clean water for production and life, excluding bottled drinking water and other beverages subject to a tax rate of 10%.

2.

Fertilizers; ores for fertilizer production; pesticides and plant and animal growth stimulants, including:

- Fertilizers which are organic and inorganic fertilizers such as phosphorus fertilizer, nitrate fertilizer (urea), NPK, mixed nitrate, phosphate, potassium; microbial fertilizers and other fertilizers;

- Ores for fertilizer production which are those used as materials for fertilizer production such as apatite for phosphorus fertilizer production, humus for microbial fertilizer production.

- Pesticides which include plant protection drugs.

3.

Services of digging, embanking and dredging canals, ditches, ponds and lakes for agricultural production; cultivating and tending plants and preventing and controlling pests; and preliminarily processing and preserving agricultural products (except dredging intra-field canals and ditches).

Services of preliminary processing and preservation of agricultural products, including sun-drying, heat-drying, peeling, pitting, slicing, grinding, freezing, salting and other ordinary methods of preservation.

4.

Cultivation, husbandry, aquatic and marine products which are unprocessed or preliminarily processed and preserved (in the forms not liable to VAT) at the stage of commercial business, except the cases not requiring VAT declaration and payment.

Unprocessed farm produce guided in this Clause includes paddy, rice, maize, potato, cassava and wheat.

5.

Preliminarily processed latex in the forms of crepe, sheet, strip or granule; preliminarily processed pine resin; nets, net ropes and cords for weaving fishing nets, including fishing nets, assorted cords and ropes for exclusive use in weaving fishing nets, regardless of their production materials.

6.

Fresh and raw foods at the stage of commercial business; unprocessed forest products at the stage of commercial trading, except timber, bamboo shoots and the products in the cases not eligible to VAT

Fresh and raw foods are those which have been neither cooked nor processed into other products, but have only been preliminarily processed by cleaning, peeling, slicing, freezing or sun-drying, and still remain fresh and raw, such as cattle and poultry meat, shrimps, crabs, fishes, and other aquatic and marine products.  Seasoned food is subject to the 10% tax rate.

Unprocessed forest products are forest products exploited from natural forests and of the groups of:  bamboo and rattan of various kinds, mushrooms, Jew’s ear fungus; roots, leaves, flowers, medicinal plants, plant resins, and other forest products.

 7.

Sugar and by-products in sugar production, including molasses, bagasse and dregs.

8.

Products made of jute, rush, bamboo, rattan, leaves, straw, coir, coconut shells, water hyacinth, and other handicraft products made of raw materials from agricultural production are those made of or processed from jute, rush, bamboo, rattan and leaves as main raw materials, such as Jute strings made of bamboo or coir; curtains and blinds made of bamboo of various kinds, bamboo brooms, conical hats; bamboo chopsticks; preliminarily processed cotton; newsprint paper.

9.

Medical equipment and instruments, including special-use machinery and instruments for medical use, such as scanners and radiography machines of all kinds for medical examination and treatment; devices and instruments used exclusively in surgery and wound treatment; ambulances; blood-pressure, cardiac and vascular meters; blood transfusion instruments; syringes and needles; contraceptive devices and other special-use medical equipment as certified by the Ministry of Health;

Medical cotton, bandages, gauzes, and medical hygienic bandages; preventive and curative medicaments, including finished medicaments, materials for the manufacture of medicaments other than functional food; vaccines, medical biologicals, distilled water for preparation of injections and transfusion fluids; chemical supplies for testing and germicides for medical use; surgical
caps, clothes, masks, cloths, gloves, boots, shoe covers and tissues and gloves for medical use, breast implants, and dermal fillers.

10.

Teaching and learning aids, including models, drawings, writing boards, chalks, rulers, compasses and other equipment and devices used for teaching and scientific research and experiment.

11.

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

- Cultural, exhibition, physical training and sports activities, except revenues such as:  sales of goods, rentals of grounds and yards or booths at fairs or exhibitions;

- Art performance activities:  such as tuong (classical drama), cheo (traditional operetta), cai luong (reformed drama), singing, dancing, music, drama, circus; other art performances and services of organizing art performances of theaters or tuong, cheo, cai luong, singing, dancing, music, drama or circus troupes licensed by competent state agencies;

- Film production; film import, distribution and screening, except the products.

12.

Children’s toys; books of various kinds, excluding those not liable to VAT

13.

Science and technology services, which are activities serving or supporting scientific research and technological development; activities related to intellectual property; technology transfer, standards, technical regulations, metrology, product and goods quality, radiation and nuclear safety and atomic
energy; services on information, consultancy, training, retraining, popularization and application of scientific and technological achievements in socio-economic fields under science and technology service contracts provided in the Law on Science and Technology, excluding online games and entertainment services on the Internet.

14.

Sale, lease or lease-purchase of social houses under the Housing Law.  Social houses are houses built by the State or organizations or individuals of different economic sectors and satisfying the criteria on domicile, sale price, rent, rent-purchase price, eligible persons, and conditions for purchase, rent or rent-purchase of social houses under the housing law.