Goods and services subject to VAT at the rate of 5%

According to current regulations, there are many taxable items with different tax rates or non-taxable. So, which items are subject to the 5% tax rate according to current regulations, what are the conditions to apply the 5% tax rate? TASCO Tax Agents will provide information to answer the above questions in the article below.

The types of goods and services subject to the 5% tax rate:

1. Clean water for production and daily life, except bottled drinking water and other soft drinks subject to the 10% tax rate.

2. Ores for the fertilizers production, pesticides, and growth stimulants for livestock and plants, including:

👉Ores for fertilizer production are the ores used as raw materials for fertilizer production, such as Apatite ores which are used to produce phosphate fertilizers, and mud for use as microbiological fertilizers;

👉Pesticides include plant protection products according to the List of pesticides promulgated by the Ministry of Agriculture and Rural Development and other pesticides;

👉Growth stimulants of animals and plants.

3. Services of digging, dredging canals, ditches, ponds, and lakes for agricultural production, cultivation, care, pest control for plants, preparation, and preservation of agricultural products (except for dredging and dredging canals, ditches which are specified in Clause 3, Article 4 of Circular 219/2013/TT-BTC).

Preparation and preservation of agricultural products include drying, paring, separating seeds, cutting, milling, cold preservation, salted, and other common forms of preservation as guided in Clause 1 of Article 4 Circular 219/2013/TT-BTC.

4. Crop, livestock, seafood products that have not been processed or have only been preparation processed and preserved (form of preparation and preservation as guided in Clause 1, Article 4 of Circular 219/2013/TT-BTC ) at the stage of commercial business, except for the cases guided in Clause 5, Article 5 of Circular 219/2013/TT-BTC.

Unprocessed crop products guided in this Clause include paddy, rice, corn, potato, cassava, and wheat.

5. Processed rubber latex; preprocessed turpentine, nets, ropes, and fibers for knitting fishing nets, including fishing nets, fibers, and specialized ropes for knitting fishing nets, regardless of production materials.

6. Fresh food at the stage of commercial business; unprocessed forest products at the commercial stage, except wood, bamboo shoots, and products specified in Clause 1, Article 4 of Circular 219/2013/TT-BTC.

Fresh food includes foods that have not been cooked or prepared into other products, only partially prepared in the form of cleaning, peeled, cut, frozen, dried but are still fresh after being prepared. such as cattle, poultry, shrimp, crab, fish, and other seafood products.

In case food has been marinated with spices, the tax rate of 10% shall apply.

Unprocessed forest products include products from natural forests exploited in the group: rattan, bamboo, mushrooms, wood ear mushrooms, roots, leaves, flowers, medicinal plants, tree resins, and other forest products.

7. Sugar, by-products in sugar production, including molasses, bagasse, sludge.

8. Products made of jute, sedge, bamboo, rattan, bamboo, cork, leaves, straw, coconut shell, coconut skull, hyacinth, and other handicraft products manufactured using raw materials from agriculture are products produced and prepared from the main raw materials of jute, sedge, bamboo, rattan, bamboo, cork, leaves such as jute carpet, jute fiber, jute bag, coconut fiber carpet, mats made of jute, sedge, broom, ropes, fastener made of bamboo, coir, curtains, made of bamboo, bamboo brooms, conical hats, bamboo chopsticks, pre-processed cotton, newsprint.

9. Medical equipment and instruments, including specialized medical machinery and tools, include: scanners, projectors used for medical examination and treatment, specialized equipment and instruments for surgery and wound treatment, ambulance, sphygmomanometer, heart, pulse, blood transfusion equipment; needles; contraception and other specialized medical instruments and equipment as certified by the Ministry of Health.

Medical cotton, bandages, compress and medical tampons; disease prevention and treatment drugs, including finished drugs and medicinal ingredients, except for dietary supplement; Vaccine; medical-biological products, distilled water to prepare injection drugs and fluid; hats, clothes, masks, gloves, lower limb covers, shoe covers, towels, specialized medical gloves, breast pockets and dermal fillers (excluding cosmetics); chemical materials for testing and sterilization for medical use as certified by the Ministry of Health.

10. Teaching and learning equipment include models, drawings, boards, chalk, rulers, compasses, and other specialized equipment and tools for teaching, research, and scientific experiments.

11. Cultural activities, exhibitions, physical training, and sports; performing Arts; making films; import, distribution, and screening of films.

👉Cultural activities, exhibitions, and physical training and sports activities, except for revenues such as: selling goods, yard rental, and booths at fairs and exhibitions.

👉Performing arts activities such as classical theatre, reformed Theatre, sing, dance, dramatic, circus; other art performance activities and art performance organization services of theaters or troupes of opera, classical theatre, reformed theatre, ca, dance, music, drama, circus have operation license granted by competent State agencies grant rights.

👉Film production; import, distribution, and screening of films, except for the products mentioned in Clause 15, Article 4 of Circular 219/TT-BTC.

12. Children's toys; all kinds of books, except books not subject to VAT, guided in Clause 15, Article 4 of Circular 219/TT-BTC.

13. Science and technology services:

👉Activities serving and providing technical support for scientific research and technological development.

👉Activities related to intellectual property.

👉Technology transfer, standards, technical regulations, product and goods quality measurement, radiation safety, nuclear and atomic energy safety, information services, consulting, training, fostering, popularizing, and applying the advanced scientific and technological achievements.

👉Technology in the social-economic fields under the contract of science and technology services specified in the Law on Science and Technology, excluding online games and entertainment services on the Internet.

14. Sale, lease, lease for purchase social house following the Law on Housing.

Social housing is a house built by the State or an organization or individual of all economic sectors and meets the criteria for housing, selling price, rental price, and rental purchase price, the object, and conditions to buy, rent, or lease for purchase a house in accordance with the Law on Housing.

Note: The tax rate of 5% applies to enterprises declaring VAT by the deduction method.

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