Law firms in Vietnam- Apply 5% VAT for social house
This is one of important content approved the National Assembly on June 19, 2013 at the Law No. 31/2013/QH13 on amending and supplementing some Articles of the Law on Valued Added Tax.
Accordingly, in order to create favorable conditions for families with medium and low incomes to approach the social houses, the National Assembly apply the tax rate of 5% to lease, and hire purchase of social housing from July 01, 2013. At the same time, the 10% VAT on the sale, lease, and hire purchase of commercial housing, which is finished apartments smaller than 70 m2 that are sold at below 15 million VND/m2, shall be reduced by 50% from July 01, 2013 until the end of June 30, 2014.
Also in this Law, the National Assembly also supplements some objectives are not applicable to VAT tax. The tax rate of 0% is applicable to exported goods and services, international transport, goods and services that are not subject to VAT except for the cases such as transferring technologies, transferring intellectual property rights abroad; reinsurance abroad; credit services; capital transfer; derivative financial services; telecommunications and postal services; exported products being resources or minerals that are no processed into other products. And exported goods and services being sold outside Vietnam, in non-tariff zones; goods and services provided for foreigners according to the Government’s regulations.
Besides, the National Assembly also amends some regulations in tax deduction or direct calculation on VAT tax and supplements some cases in tax refund such as when the un-deducted VAT on exported goods and services of a business establishment reaches 300 million VND in the month or the quarter, the establishment shall receive a VAT refund by the month or quarter; foreigners and Vietnamese people residing abroad who have passports or entry papers issued by foreign competent authorities shall receive refunds of tax on goods purchased in Vietnam and brought abroad.This Law takes effect on January 01, 2014.
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