On the Ministry of Finance's Information Portal, a business household operating in the field of programming and software development in Ho Chi Minh City has just requested the tax authority to guide on value-added tax (VAT) policies for software service provision activities to customers abroad.
According to the content sent to the tax authority, this business household specializes in providing programming services and software development for foreign organizations.
Customers pay in foreign currency through bank transfers to the business household's bank account in Vietnam. The annual revenue of business households ranges from 1 to 3 billion VND.
Taxpayers request tax authorities to clarify in which cases the provision of programming services and software development for foreign customers falls under the provisions of VAT law.
Taxpayers also requested guidance on dossiers and documents to be kept in cases where operations are not subject to tax or are subject to a 0% tax rate to have a basis for implementing the correct provisions of law.
Answering the above content, Base Tax 16 HCMC cited VAT Law No. 48/2024/QH15 effective from July 1, 2025.
According to Clause 21 Article 5 of the VAT Law, software products and software services according to the provisions of law are not subject to VAT.
In addition, Clause 1, Article 9 of the Law stipulates a 0% tax rate applicable to a number of exported goods and services, including digital information content products provided to foreign parties and having dossiers and documents proving consumption outside Vietnam as prescribed by the Government, except for cases where a 0% tax rate is not applied.
For goods and services not subject to the 0% or 5% tax rate, the Law stipulates the application of a 10% VAT rate.
Base tax 16 Ho Chi Minh City also cited Decree No. 181/2025/ND-CP of the Government detailing the implementation of a number of articles of the VAT Law.
According to Article 4 of the Decree, software products and software services according to the provisions of law on information technology, law on digital technology industry and relevant legal regulations are not subject to VAT.
Article 17 of the Decree stipulates that digital information content products provided to foreign parties and having dossiers and documents proving that they are consumed outside Vietnam are subject to the 0% VAT rate.
In which, digital information content products are content products, information including documents, data, images, sounds expressed in digital form, stored and transmitted on the network environment according to the provisions of the law on information technology. Business establishments providing this product must have dossiers and documents proving consumption outside Vietnam.
Regarding the conditions for applying a 0% tax rate, Clause 2, Article 18 of Decree No. 181/2025/ND-CP stipulates that for export services, business establishments must have a service provision contract with organizations and individuals abroad or in non-tariff zones and have non-cash payment documents for export services.
Based on the above regulations, Base Tax No. 16 of Ho Chi Minh City said that in case household businesses provide software services to foreign customers, if they fully meet the conditions specified in Clause 2, Article 18 of Decree No. 181/2025/ND-CP, they are subject to the 0% VAT rate.
If there are still problems, taxpayers can contact the Management and Support Team No. 1 for individuals and business households under Base Tax No. 16 of Ho Chi Minh City for guidance according to regulations.
