GUIDELINES OF TAX AUTHORITIES AND MINISTRY OF FINANCE ON APPLYING VAT RATES FOR SERVICES PROVIDED TO ORGANIZATIONS IN NON-TARIFF ZONES ACCORDING TO LAW ON VALUE ADDED TAX 2024 NO. 48/2024/QH15
- RSM Việt Nam
- Sep 12
- 5 min read
On 26 November 2024, the National Assembly promulgated Law on Value Added Tax (“VAT”) No. 48/2024/QH15, which stipulates that exported goods and services are subject to a 0% VAT rate. On 1 July 2025, the Government issued Decree No. 181/2025/NĐ-CP providing detailed regulations on the implementation of certain provisions of the Law on Value Added Tax 2024. Accordingly, Clause 5, Article 17 of this Decree stipulates that the 0% VAT rate applies to goods and services sold and supplied to organizations in non-tariff zones and consumed in non-tariff zones, that must directly serve export production activities, specifically, goods and services consumed in non-tariff zones must serve the export production activities of organizations in non-tariff zones and must not serve activities other than export production activities.
In the process of applying the above regulations, organizations in the non-tariff zone ("non-tariff organizations") and enterprises providing related services ("suppliers") have encountered various issues that require clarification, such as: what is considered a service that directly serves export production activities; or how to handle cases where an enterprise is engaged in both export and domestic business activities, etc. Based on official letter replies from the Ministry of Finance and local tax authorities, more specific guidance has now been provided as follows:
| On the part of the non-tariff organizations:
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Official Letter No. 1491/HYE-QLDN2 dated 22 August 2025 of the Hung Yen Provincial Tax Department in response to NIKKISO Vietnam Co., Ltd. (export processing enterprise) | Official Letter guidance: “Goods and services sold and supplied to the Company (as an export processing enterprise), if meeting the conditions of being goods and services supplied directly to the Company, consumed in non-tariff zone, directly serving the Company’s export production activities, not serving other activities that are not export production activities, and not falling under the cases stipulated in Clause 4, Article 17 of Decree No. 181/2025/NĐ-CP, shall be subject to the 0% VAT rate.”
ð Although the guidance has partly addressed enterprises’ concerns regarding the application of the tax rate to all goods and services that export processing enterprises purchase from suppliers, in general, this content mainly stops at reiterating the provisions of Decree No. 181/2025/NĐ-CP. The specific situations that enterprises are facing have not yet been clarified, particularly the determination and definition of “what constitutes a service that directly serves export production activities.”
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| On the part of the supplier:
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Official Letter No. 1292/CST-GTGT dated 24 July 2025 of the Ministry of Finance in response to EY Consulting Vietnam Joint Stock Company
Official Letter No. 1471/CST-GTGT dated 13 August 2025 of the Ministry of Finance in response to PwC (Vietnam) Co., Ltd., KPMG Co., Ltd., and Deloitte Vietnam Tax Advisory Co., Ltd.
| Official Letter guidance: “If the services provided by the Company, such as audit services, tax consulting, M&A consulting, management consulting, … are services provided directly to organizations in non-tariff zones, consumed in non-tariff zones, serving the export production activities of organizations in the non-tariff zones, not serving other activities that are not export production activities, and not services stipulated in Clause 4, Article 17 of Decree No. 181/2025/NĐ-CP, shall be subject to the 0% VAT rate.”
ð Compared with the provisions of Decree No. 181/2025/NĐ-CP, this Official Letter narrows the scope by specifically referring to certain types of services such as audit, tax consulting, M&A consulting, and management consulting, ... However, the Official Letter still mainly reiterates the regulation and has not definitively resolved the practical concerns of enterprises.
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Some other guidance. According to information compiled by RSM, several other accounting and auditing firms have also submitted official letters to the Ministry of Finance and the Tax Departments and have received guidance. | Guidance 1: “In cases where it is determined that the Company provides auditing, accounting, or consulting services to organizations in non-tariff zones but such services are not consumed in non-tariff zones and do not directly serve export production activities, shall not be subject to the 0% VAT rate.”
Guidance 2: “In cases where the Company provides auditing services to export processing enterprises (not falling within the categories of goods and services ineligible for the 0% tax rate as stipulated in Clause 4, Article 17 of Decree No. 181/2025/NĐ-CP), and such services are performed and consumed at the export processing enterprises directly serving export production activities, but the export processing enterprises also engage in activities other than export production, shall not be subject to the 0% VAT rate.” …
ð The two above guidance documents have helped clarify further the scope of application of the 0% tax rate, from which several principles can be drawn:
§ Regarding the place of service performance and consumption: Services must be performed and consumed directly at the export processing enterprises (in non-tariff zones), not performed outside. Under this guidance, it can be understood that services considered to directly serve export production activities must be provided and consumed in non-tariff zones.
§ Regarding the scope of business activities of export processing enterprises: If an export processing enterprise only engages in export activities, services meeting the conditions shall be subject to the 0% tax rate. Conversely, if the enterprise engages in both export and other activities (e.g., domestic consumption), the portion of services relating to the other activities shall not be subject to the 0% tax rate.
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As of now, the official letter replies from the Ministry of Finance and local tax authorities regarding the application of VAT rates to services provided to non-tariff organizations show a tendency toward increasingly clear but also more cautious interpretation. These constitute an important source of reference that service providers and non-tariff organizations should carefully study and compare before implementation. Therefore, we recommend that non-tariff organizations and service providers exercise caution, specifically as follows:
1. For non-tariff organizations:
Consider requesting official letter guidance from the local tax authority in charge to obtain a clear legal basis.
Clearly determine the business model: whether the enterprise conducts only export activities or both export and domestic activities. On that basis, distinguish which services serve export activities (eligible for the 0% tax rate) and which serve domestic activities (not eligible for the 0% rate). If such separation is not possible, the enterprise should proactively determine an allocation ratio and coordinate with the service provider to apply the appropriate tax rate for both parties.
For services serving export activities subject to the 0% rate, the enterprise should record them under cost of goods sold (VAS 627) to ensure the reasonableness and validity of expenses.
2. From the perspective of service providers:
Consider requesting official letter guidance from the local tax authority to ensure proper invoice issuance and correct tax rate application.
Proactively communicate with clients to fully understand their business model (export-only or with additional domestic activities). On that basis, determine the portion of services eligible for the 0% tax rate and the portion subject to the standard rate.
Clearly determine the place of service provision and consumption depending on the type of service provided (for example, certain specific activities such as event organization, training, team building, M&A consulting at the target company’s premises, etc.) to ensure compliance with the requirement that services be consumed in non-tariff zone and to apply the correct tax rate as prescribed.
The above represents an objective analysis based on the system of documents currently in effect. In the future, when regulatory authorities issue supplementary guidance or there are changes in policy, we will provide timely updates to reflect the situation accurately and support enterprises in the implementation process.
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