VAT on Exported Services
Latest Update: June 10, 2024

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🤔 Do I have to pay VAT on services bought in and imported from Vietnam?

☝️ Yes, but this is of course a valid question considering that you will likely "consume" the service abroad

👇 ...more below 

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🛫 Introduction

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Many international companies are purchasing services in Vietnam for their business abroad. This may be relevant for IT outsourcing, paying fees to local suppliers or settling invoices for AHK services 😉. Accounting departments of such international enterprises may then be surprised to find VAT being invoiced to them.

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⚖️Legal Regulations

 

Circular No. 219/2013/TT-BTC dated December 31, 2013 is the basis for VAT regulations. It lays out that "Exported (...) services are (...) services sold or supplied to organizations and individuals abroad and consumed outside of Vietnam."

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Now, an experienced accountant may say: "The supplier list we bought from AHK Vietnam has been prepared there but will be "consumed" by our purchasing department which is - in fact - outside of Vietnam. Hence, 0% VAT". While this assessment may make sense intrinsically, the Vietnamese financial authorities will typically see such cases differently. They argue that most services will be "consumed" in Vietnam. 🤷‍♂️ There seem to be few instances where VAT exemption is actually applied as laid out in this 👉 report by the "Vietnam Business Forum" (page 8, point 13).

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☝️ Therefore: Most services procured in Vietnam will have VAT levied on them.

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Here is a 👉 another case of exported services laid out in legal terms by the Vietnamese Chamber of Commerce and Industry (VCCI).

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👀 Dealing with Vietnamese VAT

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There is currently no way of reclaiming Vietnamese VAT. Reverse charge cannot be applied. VAT must be paid.

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🏁 Conclusion

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As frustrating as it may be VAT must - mostly - be levied upon services rendered by Vietnamese suppliers.

Please note that this page does constitute legal advise. Please turn to a lawyer, for example from 👉 this list.