VAT,PIT,tax management

The stipulation is part of the Ministry of Finance's newly released Circular No 40 VAT and PIT management.

The newly released circular has added some business fields to the list of products and services subject to VAT and PIT.

In addition to these services, the service of repairing computers and household appliances will have 5 percent VAT and 2 percent PIT, commencing from August 1.

This means that the total tax the providers of these services have to pay is 7 percent.

Legal advice, financial consultancy, accounting, auditing, and tax and customs procedure services will also bear similar taxes.

Data processing services, information portal rental, IT and telecommunications equipment leasing, and advertisement on digital information content products and services will also be taxed a total of 7 percent.


The highest tax rate, 10 percent (5 percent VAT and 5 percent PIT), is being imposed on services that lease assets, including house, land, retail premises, workshops and warehouses, except for accommodation services; leasing means of transport, and equipment without regulators; and leasing other assets with no services associated.

Other services, including cargo and passenger transport; food; equipment and transport vehicle repair and maintenance will be taxed 3 percent VAT and 1.5 percent PIT.

The circular also stipulates that business households and individuals satisfying the requirements to pay tax in accordance with a declaration method, that have followed the taxation regime before the Circular 40 took effect and now have no demand to shift to other tax calculation methods, will continue applying the tax regime until the 2021 tax period.

Under the circular, business households and individuals who have revenue from production and business activities in one calendar year of VND100 million or lower won’t have to pay VAT and PIT.

Also in the circular, MOF has released a list of business fields that will have to pay VAT and PIT depending on percentage of revenue.

Others to be subject to VAT and PIT: 1/ business households and individuals engaged in e-commerce activities 2/ business households and individuals engaged in production and business activities in border and border gate markets, and markets in border economic zones in Vietnamese territory 3/ asset leasors and ‘.vn’ domain name transfer 4/institutions cooperating with individuals to do business; institutions and individuals who make tax declaration and payment for other individuals and 5/ lottery companies, insurers and multi-level sales companies that pay income directly to individuals. 

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