On May 12th ,2020, Hanoi Tax Department issued Official Letter No.34316/CT-TTHT. Whereby:
In case the Company signss a repair service contract with a foreign company, in which the Comapy provides this service to Vietnamese domestic enterprises, or export processing companies (including export processing companies that are not in export processing zones) on behalf of the foreign company, the VAT rate shall be determined based on following principles:
When services are provided directly to organizations and individuals in Vietnam and being used in Vietnam, VAT rate of 10% shall be applied in accordance with Article 11 of Circular No.219/2013/TT-BTC.
In case services are provided directly to organizations and individuals in non-tariff areas and consumed in non-tariff areas, those services shall be considered as export services and are applicable for the VAT rate of 0%, given that these services satisfied regulations in Clause 2 Article 9 in the Circular No.219/2013/TT-BTC and not subjected to cases in Clause 2 Article 1 in the Circular No. 130/2016/TT-BTC. The non-tariff area is determined under the provisions of Clause 20 Article 4 in the Circular No.219/2013/TT-BTC.