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Vietnam’s VAT Law for the Healthcare 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 Healthcare category in Vietnam’s VAT law.
Transactions related to certain products and services are viewed as non-taxable transactions, these include:
- Human and animal healthcare and health services;
- Artificial products used for the substitution of diseased people’s organs; crutches, wheelchairs etc. exclusively for the disabled.
The Healthcare 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:
- Medical equipment and instruments, including specialized machinery and instruments for medical use, such as scanners and radiography machines of all kinds for medical examination and treatment; devices and instruments used exclusively in surgery and wound treatment; ambulances; blood-pressure, cardiac and vascular meters; blood transfusion instruments; syringes and needles; contraceptive devices and other specialized medical equipment;
- Medical cotton, bandages, gauzes and medical hygienic bandages; preventive and curative medicaments, including finished medicaments, materials for manufacture of medicaments other than functional food; vaccines, medical biologicals, distilled water for preparation of injections and transfusion fluids; chemical supplies for testing and germicides for medical use; surgical caps, clothes, masks, cloths, gloves and boots, shoe covers and tissues and gloves for medical use.
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.
Exemptions
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.
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Related Reading
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.
Vietnam’s VAT Law for Machinery and Equipment
Vietnam’s VAT Law for the Financial Category
Vietnam’s VAT Law for Farming and Animals
Vietnam’s VAT Law for Imports/Exports
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