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Vietnam – indirect tax guide

Vietnam – indirect tax guide

Explore the requirements and rules that apply to indirect taxes in Vietnam.

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General

Type of indirect tax:

VAT.

Standard rate:

10 percent.

What supplies are liable to the standard rate?

Goods and services used for the purposes of production, trading and consumption in Vietnam.

Are there any reduced rates, zero- rates or exemptions and if so, what do they apply to?

Zero-rate: exported goods or services, construction and installation overseas and in non-tariff zones, international transportation and certain airline and marine services.

Exempt: there are 26 categories of VAT exempt supplies including, but not limited to, certain agricultural products; salt products; animal feed; equipment used for agricultural activities; transfer of land use rights; life insurance; financial; medical; public postal and telecommunications; construction work related to cultural work; educational and vocational training; radio and television broadcasting; publication; public transportation; and temporary imported goods for re-export and technology transfer.

5 percent: the provision of certain essential goods and services including, but not limited to, clean water; fresh foodstuffs; medical and educational equipment; and scientific and technology services.

VAT ignorable transactions: transactions whereby the supplier is not required to charge output VAT but is generally allowed to claim the input VAT associated with such transactions. These transactions include, but are not limited to, payments of indemnities and bonuses; financial assistance or other financial receipts; some services rendered by foreign contractors and performed overseas, such as repair of means of transportation, advertising or brokerage services; disposal of assets owned by non-VAT registered owners; certain intercompany transfers of fixed assets; capital contributions in the form of assets; receipts from insurance claims against a third party; and receipts on behalf of a third party.

VAT/GST registration

Who is required to register and what is the threshold?

VAT registration is compulsory to all organizations and individuals producing and trading taxable goods and services in Vietnam and importing taxable goods or purchasing taxable services from overseas.

Is voluntary registration possible?

Yes.

Is voluntary registration available for an overseas company or a fiscal representative?

Yes, voluntary registration is available to eligible overseas companies carrying on business in Vietnam as foreign contractors, subject to their satisfaction of accounting and bookkeeping requirements under Vietnamese accounting standards.

VAT/GST compliance

What is the typical frequency of returns?

Monthly or quarterly.

VAT/GST recovery

Are there any items that a registered business cannot recover VAT on?

Yes, these include, and are not limited to, input VAT suffered on purchases for purposes other than producing taxable goods or services; input VAT on invalid invoices; input VAT of export transactions that do not satisfy bank remittance requirements.

Can an overseas company recover VAT if it is not registered?

No.

How long does it typically take to obtain a VAT refund following a return filing?

The tax administration law generally requires the tax authorities to process a refund application within a maximum period of 6 to 40 days following the receipt of all required documents from the applicant. In practice, delays are common.

Invoices

Are there specific requirements for the content of invoices to be considered valid for VAT purposes?

Yes, invoices should be in Vietnamese and must contain the invoice type; invoice symbols and invoice number pattern; invoice copy names; invoice serial number; details of the seller and buyer, especially their tax code numbers; details of the goods/services sold; signatures of the buyer and seller, etc.

Special indirect tax rules

Does a reverse charge or indirect tax withholding mechanism apply?

Yes, VAT withholding can apply.

Rulings

Is it possible to apply for formal or informal advance rulings from the tax authority?

Yes.

Other indirect taxes

Are there any other indirect taxes that apply in the jurisdiction?

Other indirect taxes include the following:

  • special consumption tax
  • import and export duties
  • environment protection tax.

Contacts

Ngoc Thai Nguyen
KPMG in Vietnam
T: +84 4 3946 1600
E: tnnguyen@kpmg.com.vn

Disclaimer

All information within this guide is provided by KPMG professionals in Vietnam and based on information available as of September 2019.

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