Below is a detailed guide on the VAT rates that businesses need to consider:

1. VAT Rate of 0%

According to Point b, Clause 1, Article 9, Circular 219/2013/TT-BTC dated December 31, 2013, regarding the 0% VAT rate:

1. 0% VAT is applied to exported goods and exported services; construction and installation overseas and in free trade zones; international transport; exported goods and services that are not subject to VAT, except for the cases in Clause 3 of this Article, in which 0% VAT is not applied.

Exported goods and exported services are those that are sold to overseas organizations and individuals and are consumed outside Vietnam, sold to the entities in free trade zones, or sold to foreign customers as prescribed by law.

…

b) Exported servicesinclude the services directly provided for overseas organizations and individuals and are consumed overseas; the services provided for the entities in free trade zones and consumed within the free trade zones.

Overseas individuals are the foreigners that do not reside in Vietnam, the Vietnamese people that reside overseas and are not present in Vietnam when the services are provided. The entities in free trade zones are the entities that have registered their business and other cases prescribed by the Prime Minister.

If services are provided both in Vietnam and overseas, but the service contract is signed between two taxpayers in Vietnam or two taxpayer that have permanent establishments in Vietnam, 0% tax is only applied to the services provided overseas, except for the case of insurance for imported goods, in which 0% tax is applied to the whole contract value. If the contract does not separate the services provided in Vietnam, taxable price shall be determined according to the ratio of expense incurred in Vietnam to the total expense.

The service provider that is a taxpayer in Vietnam must provide documents proving that the services are provided outside Vietnam.

In summary, visa services qualify for a 0% VAT rate if:

• Provided to organizations or individuals abroad and consumed outside Vietnam.
• Provided to organizations or individuals in non-tariff zones and consumed within these zones.

2. VAT Rate of 10% (or 8%)

If the service does not qualify for the 0% VAT rate, a standard VAT rate of 10% applies.

However, according to Decree 72/2024/ND-CP, from July 1, 2024, to December 31, 2024, the VAT rate will be reduced from 10% to 8%.

3. Required Documentation

To ensure proper application of the 0% VAT rate, businesses must prepare the following documents:

• Service contracts with organizations or individuals abroad or in non-tariff zones.
• Bank payment receipts and other required documentation as stipulated by law.

With a team of experienced professionals, we are ready to assist you with any tax-related queries and help optimize your business operations efficiently and effectively.

If you have further questions, please contact TPM via our website: tpm.com.vn or hotline: 028 3505 1800 for prompt support.

Vân Lê