VI On 4 August 2026, the Department of Tax, Fee and Charge Policy Management and Supervision issued Official Letter No. 2265/CST-GTGT of 2026 providing guidance on value-added tax (VAT) policy applicable to services consumed outside Vietnam. Pham Consult provides an overview of the relevant regulations and conditions for applying the 0% VAT rate in the following article.
1. Guidance on the Application of the 0% VAT Rate to Services Consumed Outside Vietnam
a. Period Before 1 July 2025
Clauses 1 and 2, Article 9 of Circular No. 219/2013/TT-BTC dated 31 December 2013, issued by the Ministry of Finance, stipulate the application of the 0% VAT rate as follows:
“1. The 0% VAT rate applies to exported goods and services; construction and installation activities carried out overseas or in non-tariff zones; international transportation; and goods and services not subject to VAT when exported, except for cases in which the 0% VAT rate is not applicable as prescribed in Clause 3 of this Article.
b) Exported services include services directly provided to foreign organizations or individuals and consumed outside Vietnam, as well as services directly provided to organizations or individuals in non-tariff zones and consumed within such zones.
Foreign individuals refer to non-residents of Vietnam, Vietnamese citizens residing overseas, and individuals who are outside Vietnam during the period in which the services are provided. Organizations and individuals in non-tariff zones include those having registered business activities and other cases as prescribed by the Prime Minister.
A business establishment providing services and acting as a taxpayer in Vietnam must have documentation proving that the services were performed outside Vietnam.
2. Conditions for applying the 0% VAT rate:
b) For exported services:
- A service provision contract with a foreign organization or individual, or an organization or individual in a non-tariff zone;
- Bank payment documents evidencing payment for exported services and other documents as prescribed by law.”
Accordingly, to qualify for the 0% VAT rate on exported services under the above regulations, an enterprise must provide documentation demonstrating that the services were performed outside Vietnam. It must also maintain complete supporting documents and records in accordance with Point c, Clause 2, Article 9 of Decree No. 209/2013/ND-CP and Point b, Clause 2, Article 9 of Circular No. 219/2013/TT-BTC.
b. Period From 1 July 2025
Clause 2, Article 18 of Decree No. 181/2025/ND-CP dated 1 July 2025, issued by the Government to elaborate on certain provisions of the Law on Value-Added Tax, stipulates the conditions for applying the 0% VAT rate to exported services as follows:
“a) A service provision contract with a foreign organization or individual, or an organization or individual in a non-tariff zone;
b) Non-cash payment documents for exported services.”
Article 4 of Circular No. 69/2025/TT-BTC dated 1 July 2025, issued by the Ministry of Finance, provides for the documentation and procedures applicable to the 0% VAT rate for goods and services specified in Clause 1, Article 9 of the Law on Value-Added Tax as follows:
“1. Taxpayers shall determine whether goods and services are eligible for the 0% VAT rate based on Clause 1, Article 9 of the Law on Value-Added Tax and Article 17 of Decree No. 181/2025/ND-CP dated 1 July 2025 of the Government, which elaborates on certain provisions of the Law on Value-Added Tax.
2. Upon request by a competent state management authority, taxpayers must present the documentation and records demonstrating compliance with the conditions for applying the 0% VAT rate prescribed in Article 18 of Decree No. 181/2025/ND-CP dated 1 July 2025 of the Government, which elaborates on certain provisions of the Law on Value-Added Tax.
For exports conducted through foreign e-commerce platforms and certain other special cases, upon request by a competent state management authority, taxpayers must present the documentation and records demonstrating compliance with the conditions for input VAT credit as prescribed in Articles 27 and 28 of Decree No. 181/2025/ND-CP dated 1 July 2025 of the Government, which elaborates on certain provisions of the Law on Value-Added Tax.”
Therefore, under the above regulations, an enterprise seeking to apply the 0% VAT rate to exported services must maintain complete supporting documentation in accordance with Clause 3, Article 17, including (i) information concerning the foreign party’s residence status, whether an organization or an individual, and (ii) information regarding access by the foreign organization or individual, as well as the requirements under Clause 2, Article 18 of Decree No. 181/2025/ND-CP.
2. Cases Not Eligible for the 0% VAT Rate
The 0% VAT rate does not apply to the following goods and services:
- Technology transfers and transfers of intellectual property rights to overseas recipients.
- Reinsurance services provided overseas.
- Credit extension services.
- Capital transfers.
- Derivative products.
- Postal and telecommunications services.
- Exported products falling within the lists of unprocessed extracted natural resources and minerals, and extracted natural resources and minerals processed into other products, promulgated together with Decree No. 144/2026/ND-CP.
- Imported tobacco, liquor and beer that are subsequently exported.
- Domestically purchased petrol and oil sold to business establishments in non-tariff zones.
- Automobiles sold to organizations or individuals in non-tariff zones.
- Services provided in Vietnam to foreign organizations or individuals, including sporting competitions; artistic, cultural and entertainment performances; conferences; hotel accommodation; training; advertising; and travel and tour services; services associated with the sale, distribution or consumption of products and goods in Vietnam; and non-cash payment services.
- Services provided by business establishments to organizations or individuals in non-tariff zones, including the leasing of houses, conference halls, offices, hotels and warehouses; transportation services for the pick-up and drop-off of employees; and catering services, except for industrial catering services and catering services provided within non-tariff zones.
Enterprises providing services to foreign customers should carefully assess where the services are actually performed and consumed, the nature of the services, and the applicable documentary and payment requirements before applying the 0% VAT rate. Compliance with the relevant conditions and proper retention of supporting records are essential to substantiate the tax treatment in the event of a tax inspection or audit.
