1. Tax exemption
Tax exemptions enjoyed by diplomatic missions, consular posts, representative offices of international organisations and their members, families and service staff will be covered in this section. The section also includes the requirements and procedures to be fulfilled by the beneficiaries.
1.1. Legal foundation
Tax exemption granted to diplomatic missions, consular posts, representative offices of international organisations and their members is in accordance with the VCDR, VCCR, Ordinance, Decree No. 72, Circular No.3 and Circular No. 8 (please refer to the said-above Circulars for more details).
1.2. General provisions
Diplomatic missions and consular posts are exempted from related taxes when buying goods and services for official use. “Official use” means any use by diplomatic missions and consular posts to exercise their official tasks.
With exception of regulations on transfer of vehicles, the goods aforementioned can not be sold, presented as gifts, leased or transferred to a third party (a third party is any non-beneficiary of diplomatic/consular privileges and immunities) under any forms for benefit.
Representative offices of international organisations in Viet Nam are also exempted from some hands tax when buying goods and services for their official use. With exception of regulations on transfer of vehicles, the goods aforementioned can not be presented as gift, sold, leased or transferred to a third party.
Members of diplomatic missions consular posts and representative office of international organisations in Viet Nam and their family members shall enjoy privileges and immunities in accordance with international treaties that Viet Nam is a party.
Article 42 of the VCDR and Para 1, Article 57 of the VCCR stipulated that diplomatic agents and career consular officers shall not in the receiving State practise for personal profit professional or commercial activity.
2. Tax exemption and its beneficiaries
2.1 Diplomatic missions, consular posts and representative offices of international organisations
The exemption of the aforementioned taxes is applicable to the goods bought for official use of diplomatic missions, consular posts and representative offices of international organisations based in Viet Nam.
These agencies are allowed to import/ temporarily import or purchase goods in Viet Nam for their work and daily life needs in permitted quantity and items. Diplomatic missions, consular posts and representative offices of international organisations in Viet Nam are provided by the MOFA with a “duty-free goods”, which lists items of goods subject to duty-free, tax and related fees and charges
exemption (excluding stockpile, transportation and related services charges in accordance with current regulations in Viet Nam).
2.2. Members of diplomatic missions and carrier consular officers
Tax exemption and other import fees are only applied to objects destined for official use, personal use of the members and their family members. In another word it will not be applied if the goods are destined for business use such as for resale, gift, rent or transfer to a third person.
2.3. Administrative, technical staff
Administrative, technical staffs of the diplomatic missions, consular posts or officers of international organisations who are not Vietnamese citizens and members of their family living with them are exempt from duties for some of the goods for official and personal use. These objectives are only exempt from duties within the first six months of the term.
2.4. The honorary consular posts
Tax exemption and other import fees are only applied to objects destined for official use and imported from the sending State. These objects are defined as emblems of the sending State, official documents, furniture and office equipments.
3. Procedures to apply for duty free book
The duty free book is provided by Directorate of State Protocol for office, individuals of the diplomatic missions, and offices of international organisation offices in Viet Nam. The book sets out the type and quantity of goods allowed to be purchased or imported with tax exemption for relating agencies and individuals.
3.1. Group duty free book
For the convenience of the agencies, Directorate of State Protocol will issue the group duty free book for the agencies, chancery and for each unit of the agency (commerce, military, culture…)
To receive a group duty free book, the mission sends a note to Directorate of State Protocol seeking for the issuance of the duty free book attached with the list of the diplomatic agents, administrative, technical staff (for the offices of international organisations and members of the office who are issued a diplomatic, official identity card do the same procedures).
The duty free book has 02 copies, 01 issued to the agencies and individual for use, 01 kept in the archive of Directorate of State Protocol.
When there are changes in the member list of the agencies, the mission shall send a note to Directorate of State Protocol for adjustment.
According to the general regulations, the group duty free book will be renewed every year. In case of loss, mission shall send a note to Directorate of State Protocol to request for a new one. Directorate of State Protocol will issue a new book after checking details of the book kept at archive.
3.2. Individual duty free book
The diplomatic staff, administrative and technical staff of diplomatic missions bearing diplomatic, official identity card will be issued a duty free book. Diplomatic staff will be issued duty free book for the resident time of registration.
In regard to the extension of working term, the mission shall send a note to inform and seeking an extension of the duty free book. At the same time, follow the procedures to extend the resident time at Directorate of State Protocol.
The administrative, technical staff and officers of the offices of international organisations bearing their official identity cards will only be issued a duty free book with the value of 6 months starting from the issuing date of their identity card.
The new book will be provided along with the issue of the identity card.
4.The value added tax and beneficiaries of exemption
4.1. The value added tax (VAT)
VAT is a type of indirect tax for goods, fixed assets and services. The Government of Viet Nam shall grant the diplomatic missions and consular posts and their members the VAT exemption for some commodities destined for official and personal use of the missions posts and individuals with limited quota. This tax exemption is also applied on the reciprocal basis.
4.2. Beneficiaries of VAT exemptions
4.2.1 Diplomatic missions, consular posts and representative offices of international organisations
The diplomatic missions, consular posts and representative offices of international organisations are exempt from VAT for some of the fixed assets, goods and services in the Vietnamese market destined for official use, namely:
- Rent of the chancery premises
- Electricity and water supply of the chancery premises
- Gasoline for the vehicles holding diplomatic plates (NG) with the quota of 1200 litres/vehicle/month
- Telephone installation and monthly charges (including mobile phones)
- Equipments and furniture for the chancery premises
- Construction materials, services, maintenance and repair fees of the chancery premises as the sending State’s property
- Goods listed in the Circular No 03.
4.2.2. Members of diplomatic missions, consular posts and officers of the representative offices of international organisations.
The exemption from VAT is applied to movable goods for personal use and goods listed in the duty free book issued by the MOFA, renovation services for the residence of the Heads of the mission and tax on fuel, tax and fee on vehicles. The VAT exemption is also applied to export goods produced in Viet Nam and sold in the duty free shops. The exemption is not applied to goods provided by hotels, restaurants, coffee shops and catering companies and other relevant agencies, namely:
(a) For the Heads of diplomatic mission, consular post, office of International organization (HOM)
- Rent for the residence of the HOM
- Electricity and domestic water supply of the HOM
- Gasoline for each car holding the diplomatic plates (NG) with the quota of 1200 litres/car/month
- Installation fees and bills of phones (including mobile phones) and faxes
- Equipments and furniture of the residence of the HOM.
- Construction materials, services, maintenance, repair fees of the house as the sending State’s property used for the residence of the HOM.
- Goods listed in the Circular No 03.
(b) For the diplomatic staff, consular officers and officers of international organizations:
- Gasoline for each car holding the diplomatic plates (NG) with the quota of 1200 litres/car/month
- Goods listed in the Circular No 03.
4.2.3. Honorary consular posts
The Honorary consular posts are exempt from VAT in the following cases:
- Real estate of the sending State used for the consular posts or by its members, including the honorary consul.
- Goods and services relating to construction, maintenance, repair of the real estate of the sending State used for the honorary consular posts.
4.3. Procedures for VAT exemption:
In the first week of the first month of every quarter, diplomatic missions and offices of international organisations shall send documents on VAT refund for individuals and missions to Directorate of State Protocol for consideration and certification. The documents shall include:
- A note on VAT refund (02 copies).
- A form for VAT refund issued by the Ministry of Finance (03 copies sealed and signed by a competent authority).
- Original invoices.
- Two copies of the original invoice sealed and certified by the competent authority.
- A form for tax refund issued by Ha Noi Tax Department (02 copies).
Two weeks after having received the required documents, Directorate of State Protocol shall consider and approve the items to be refunded and then transfer the documents to Ha Noi Tax Department for refund.
5. Income tax
In principle, members of diplomatic missions, consular posts and representative offices of international organizations shall be exempt from income tax in Vietnam. However, exemption is not applicable to all forms of interest rates or real income which does not relate to official functions of the diplomatic missions or consular posts, specifically:
- Special income tax, such as lottery prizes.
- Income from contracting activities (if any)
- Real income from real estate in Viet Nam; rights to share enterprises’ profit; income from managerial activities in Viet Nam (if any) and shares or bonds belonging to a company which is established in Viet Nam and people concerned gain big profits that do not form properties for business.
6. Salary, salary tax and payment of national insurance
According to the Vietnamese laws, employees shall deduct their salary and salary tax and pay parts of their salary.
Those rules are neither applicable to diplomatic missions, consular posts nor their foreign employees. Diplomatic agents and consular officers normally shall not pay insurance in Viet Nam according to national insurance programs. Their salaries, therefore, shall not be deducted for national insurance payment.