The Tax Department of Hanoi City issued Official Letter No. 4423/CTHN-TTHT dated 09 February 2023 on the value-added tax obligations when implementing projects abroad. Accordingly, the Tax Department responded to Official Letter No. 23.01/2023/CV-CK of CK Engineering Vietnam Co., Ltd (“the Company”) having problems determining value-added tax (“VAT”) obligations when implementing a project abroad with the following comments:

• Under Article 9 of Circular 219/2013/TT-BTC in case the Company has construction and installation activities abroad for a foreign organization (without a permanent establishment in Vietnam) if the Company meets the conditions regulated in Article 9.2 of Circular No. 219/2013/TT-BTC, the VAT rate of 0% shall be applied.
• In addition, when the service provision takes place both in Vietnam and outside Vietnam, but the service contract is signed between two taxpayers in Vietnam or has a permanent establishment in Vietnam, the tax rate of 0% applies only to the value of services performed outside of Vietnam according to Article 9.1 of Circular 219/2013/TT-BTC. In case, the contract does not specify the value of services performed in Vietnam separately, the taxable price is determined according to the ratio (%) of costs to the total cost incurred in Vietnam. The company in Vietnam must have documents proving the services provided outside Vietnam.
• Exported goods and services are goods and services sold or supplied to organizations and individuals abroad and consumed outside of Vietnam; sold and supplied to organizations and individuals in non-tariff zones; goods and services provided to foreign customers under the law. Output contracts signed between the Company and foreign customers in the case of export if the conditions in Article 9.2 of Circular 219/2013/TT-BTC are satisfied.
• The Company based on the actual situation, compared with the provisions of the law cited in this Official Letter 4423/CTHN-TTHT to comply with the regulations.