GOODS AND SERVICES UNDER THE TAX RATE OF 0%

GOODS AND SERVICES UNDER THE TAX RATE OF 0%

According to current regulations, which goods and services are subject to a 0% VAT rate? What are the conditions for applying the 0% tax rate?

Legal grounds:

⭐ Law on VAT 2008, revised in 2013

⭐Circular 219/2013/TT-BTC guiding the Law on VAT and Decree 209/2013/ND-CP issued by the Minister of Finance on 31/12/2013.

⭐Circular 130/2016/TT-BTC issued by the Minister of Finance on 12/8/2016.

✨Goods and services under the tax rate of 0% VAT

According to the provisions of Clause 1, Article 9 of Circular 219/2013/TT-BTC, the tax rate of 0% is applied to the following goods and services:

🍁 Exported goods and services;

🍁 Construction and installation of works abroad and in free trade zones;

🍁 International transport;

🍁 Exported goods and services that are not subject to VAT.

✅ Exported goods include:

🌸 The goods exported to foreign countries, including export entrustment;

🌸 The goods sold to free trade zones as prescribed by the Prime Minister; the goods sold to duty-free shops;

🌸 The goods that are delivered and receipted outside Vietnam;

🌸Parts and supplies for repairing and maintaining vehicles, machinery, and equipment for foreign parties and for consumption outside Vietnam;

In cases that are considered to be exported: The forwarded processed goods as prescribed of commercial law on international goods trade; The goods exported on the spot, The goods exported to be sold at overseas fairs or exhibitions.

✅ Exported services include

• The services are directly provided for overseas organizations and individuals and are consumed outside Viet Nam; the services are provided for the entities in free trade zones and consumed within the free trade zones.

✅ The aviation and maritime services

• Including the service of providing airline meals, take-off, and landing of aircraft...

✅ Other goods and services, specifically:

⭕ Construction and installation overseas or in free trade zones;

⭕ The goods and services that are not subject to VAT when being exported, except for the cases in which 0% tax is not applied;

⭕ Repairs to aircraft and ship vessels services provided to foreign organizations and individuals.

✨ Conditions for applying the 0% VAT rate 

✅ The following conditions are compulsory for exported goods

• Having a sale contract, export processing goods; export entrustment contract;
• Having bank receipts for payment for exported goods and other vouchers as prescribed by law;
• There is a customs declaration.

✅ The following conditions are compulsory for exported services

•  Having a contract to provide services for an organization or individual overseas or in a free trade zone;
•  Having bank receipts for payment for exported services and other vouchers as prescribed by law;

✅ The following conditions are compulsory for international transport

• Having an international passenger transport, luggage, or freight transport contract between the service provider and the service buyer,
• Having bank receipts for payment or other similar forms.

✅ For aviation and maritime services:

• Services applied in the international airports,... that have service supply contracts with overseas organizations, foreign airlines, bank receipts for payment, or other forms are considered payment via bank.
• Services applied at the port area with the tax rate of 0% are also required to have a service supply contract with an overseas organization; bank receipts for payment of an overseas organization or vouchers of payment for banking services of a shipping agent to a service provider, or other forms of payment that are considered payment via the bank.

The above information is about Goods and services under the tax rate of 0% VAT. We hope the above information can support your business in the process of production and business activities. If you have any questions, please contact Tasco Tax Agent for a free consultation!

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