Goods and services excluded from the VAT reduction to 8% from July 1, 2023 - do hosting, VPS, and server services qualify for 8% VAT?

On this matter,HiTechCloudwe respond as follows:

1. Goods and services excluded from the VAT reduction to 8% from July 1, 2023

The National Assembly passed the resolution of the 5th session of the 15th National Assembly, which states:

On the 2% reduction in the value-added tax rate provided for in point a, item 1.1, clause 1, Article 3 of National Assembly Resolution No. 43/2022/QH15 on fiscal and monetary policy supporting the socio-economic recovery and development program, applicable from July 1, 2023 to December 31, 2023, the resolution directs the Government to implement the measure promptly and effectively without affecting the 2023 state budget revenue estimate or deficit as set by the National Assembly's resolution, and to report on implementation together with the overall review of Resolution No. 43/2022/QH15 at the 6th session of the 15th National Assembly.

Point a, item 1.1, clause 1, Article 3 of Resolution 43/2022/QH15 provides as follows:

Article 3. Support policy for the socio-economic recovery and development program

1. Fiscal policy:

1.1. Tax exemption and reduction policy:

a) A 2% reduction in the value-added tax rate in 2022, applying to groups of goods and services currently subject to 10% VAT (reduced to 8%), except for the following groups: telecommunications, information technology, financial activities, banking, securities, insurance, real estate trading, metals, prefabricated metal products, mining products (excluding coal mining), coke, refined petroleum, chemical products, and goods and services subject to special consumption tax;

…

The groups of goods and services excluded from the VAT reduction to 8% from July 1, 2023 are therefore:

Telecommunications, information technology, financial activities, banking, securities, insurance, real estate trading, metals, prefabricated metal products, mining products (excluding coal mining), coke, refined petroleum, chemical products, and goods and services subject to special consumption tax.

2. Goods and services excluded from the VAT reduction to 8% in 2022

Under Decree 15/2022/ND-CP, VAT is reduced to 8% for groups of goods and services currently subject to the 10% rate,exceptthe following groups of goods and services:

- Telecommunications, financial activities, banking, securities, insurance, real estate trading, metals and prefabricated metal products, mining products (excluding coal mining), coke, refined petroleum, and chemical products. See Appendix I issued with Decree 15/2022/ND-CP for details.

- Goods and services subject to special consumption tax. See Appendix II issued with Decree 15/2022/ND-CP for details.

- Information technology as defined under information technology law. See Appendix III issued with Decree 15/2022/ND-CP for details.

- The VAT reduction for each type of goods and service applies uniformly at the import, production, processing, and commercial trading stages. Mined coal sold (including coal that is screened and sorted in a closed process before sale) is eligible for the VAT reduction. Coal listed in Appendix I issued with Decree 15/2022/ND-CP is not eligible for the VAT reduction at stages other than the sale of mined coal.

Where goods or services listed in Appendices I, II, and III issued with Decree 15/2022/ND-CP are not subject to VAT, or are subject to 5% VAT under the Law on Value-Added Tax, the Law on Value-Added Tax applies and the VAT reduction does not.

3.Do hosting, VPS, and server services qualify for 8% VAT?

Under the regulations, Hosting/VPS/Server services are treated as telecommunications services and therefore carry the standard 10% VAT rate. Hosting/VPS/Server services are not eligible for the reduced 8% VAT rate that some other services enjoy.