The Vietnam Confederation of Commerce and Industry (VCCI) has expressed concerns about the proposed changes to tax regulations for service exports, particularly in the context of the revised Value Added Tax (VAT) Law. VCCI points out that many Vietnamese businesses have expanded their operations overseas to provide services to customers and reduce tax obligations, with export business services such as Internet-based services, digital content production, applications, and video games currently enjoying a 0% VAT rate.
However, some businesses are still being taxed at a 10% rate due to issues with tax officials not distinguishing between domestic consumption and export services. VCCI has raised concerns about the impact on the software sector, where export products may face additional production costs if VAT rates are increased. Many companies have provided tax authorities with extensive information in an effort to comply with tax regulations but have faced challenges and increased costs. Some businesses have even established additional companies abroad to serve foreign customers in order to reduce tax obligations.
The Ministry of Finance is considering changes to the VAT Law, but VCCI and other stakeholders are advocating for the current 0% tax rate to be maintained for export services. The organization emphasizes the importance of maintaining a competitive environment for Vietnamese businesses in the global market and advocates for policies that promote innovation and economic development. In conclusion, VCCI is calling for a balanced approach that supports the growth of service exports while ensuring fair taxation practices.
