Vietnam’s VAT Law for the Media Sector
HANOI – Vietnam’s VAT law touches on a number of goods and services. Please see our latest magazine on the country’s VAT law, entitled A Guide to Understanding Vietnam’s VAT, in order to receive a general overview of what VAT is and how to properly ensure that you follow all regulations involved.
In this article, we examine the VAT implications for a number of goods and services listed under the Media category in Vietnam’s VAT law.
Transactions related to certain products and services are viewed as non-taxable transactions, these include:
- Public post, telecommunications and universal Internet services under Government programs;
- Teaching and vocational training;
- State funded radio and television broadcasting;
- Publication, import and distribution of newspapers, journals, specialized bulletins, political books, textbooks, teaching materials, scientific–technical books, and books printed in ethnic minority language, pictures and posters; money or money printing.
The chargeable amount of taxable price includes the following terms:
- For a VAT-liable book sold at the distribution price (cover price) under the Publication Law, this sale price shall be determined as the VAT inclusive price for calculating VAT and turnover of the seller. For a book sold at a price other than the cover price, VAT shall be calculated on the basis of the actual sale price;
- For printing activities, the taxed price is the printing cost. If a printing establishment performs printing contracts with payment prices covering also printing and paper costs, the taxed price also includes the paper cost.
The Import/Export category has exposure to more than one tax category depending on what the good or service is. See below for further clarification.
0% Tax Rate
Applies to exported goods and services; work construction and installation for export processing enterprises; international transportation; goods and services not liable to VAT upon exportation.
Cases ineligible for the 0% tax rate are subject to the corresponding tax rates applicable to goods and services sold or provided domestically.
5% Tax Rate
Goods and services entitled to the tax rate of 5% include:
- Teaching and learning aids including models, figures, boards, chalk, rulers, compasses, and equipment and tools exclusively used for teaching, research and scientific experiments;
- Cultural, exhibition, physical training and sports activities; art performances; film production; film import, distribution and screening (except revenues such as sales of goods, rents of grounds and fields or booths at trade fairs or exhibitions);
- Children’s toys; books of various kinds.
10% standard tax rate
Applies to all goods and services not otherwise specified. The VAT rates previously specified apply uniformly to each type of good or service at the stages of importation, manufacture, processing and trading.
A variety of goods and service transactions may qualify to be exempted from VAT. It is best to contact a tax professional to ensure that all regulations are followed.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
You can stay up to date with the latest business and investment trends across Vietnam by subscribing to Asia Briefing’s complimentary update service featuring news, commentary, guides, and multimedia resources.
In this issue of Vietnam Briefing, entitled A Guide to Understanding Vietnam’s VAT, we attempt to clarify the entire VAT process by taking you through an introduction as to what VAT is, who and what is liable, and how to pay it properly. We first take you through the basics of VAT in Vietnam before taking you deeper into the topic. Additionally, we provide updates on the new changes to the VAT process and explain how they will impact your business. The magazine is out now and will be temporarily available as a complimentary PDF download on the Asia Briefing Bookstore until the end of April.
- Previous Article Vietnam’s VAT Law for Machinery and Equipment
- Next Article Vietnam’s VAT Law for Gifts