Circular No. 10429/TC/TCT of 2001 by the Ministry of Finance stipulates the application of value-added tax (VAT) rates for waste treatment services, distinguishing between public service activities exempt from VAT and other services subject to VAT.
Scope of application
Provincial Tax Departments
Key points
- Waste collection, soil removal, septic tank sludge suction, and transportation of various types of waste must be subject to VAT at a rate of 5% (Point a of this Article).
- Sewer repair, house repair, ancillary facility repair, and vehicle cleaning services must be subject to VAT at a rate of 10% (Point b of this Article).
- Public sanitation and drainage services for streets and residential areas are exempt from VAT if they are determined to be public interest services benefiting society and the community and are paid by the State or charged according to regulations (Point 14, Section II, Part A of Circular No. 122/2000/TT-BTC).
- Previous applications that differ from the guidance in this document do not require retroactive tax collection or recalculation.
- Waste treatment services not determined as public service activities must be subject to VAT according to regulations.
🌐 Social impact of this document
- Enterprises providing waste treatment services will have to pay VAT at a specific rate, contributing to state revenue.
- Individuals and businesses using these services may be affected by costs if the services are not classified as public service activities.
❓ Frequently asked questions
What is the VAT rate for waste collection and soil removal?
The VAT rate applicable to this service is 5% (Point a of this Article).
Are sewer repair and house repair subject to VAT?
Yes, these services must be subject to VAT at a rate of 10% (Point b of this Article).
Are public sanitation and drainage services exempt from VAT?
If determined to benefit the common good of society and the community, such services will be exempt from VAT (Point 14, Section II, Part A of Circular No. 122/2000/TT-BTC).
Do previous applications that differ from this document require retroactive tax collection or recalculation?
No, previous applications that differ from the guidance in this document do not require retroactive tax collection or recalculation.
Which waste treatment services are determined as public service activities?
Sanitation and drainage services for streets and residential areas, if determined to benefit society and the community, will be exempt from VAT (Point 14, Section II, Part A of Circular No. 122/2000/TT-BTC).
Full text
LETTER
OF THE MINISTRY OF FINANCE NUMBER 10429 TC/TCT DATED OCTOBER 31, 2001 REGARDING VAT RATE FOR CERTAIN SERVICES
WASTE TREATMENT SERVICES
RESPECTED: Provincial and Central City Tax Departments
The Ministry of Finance has received letters from several tax departments and enterprises inquiring about the VAT rate applicable to waste treatment services. The Ministry of Finance hereby provides specific guidance on the application of VAT for these services as follows:
Point 14, Section II, Part A of Circular No. 122/2000/TT-BTC dated December 29, 2000, issued by the Ministry of Finance to guide the implementation of Decree No. 79/2000/NĐ-CP dated December 29, 2000 of the Government detailing the implementation of the Value Added Tax Law (VAT), has provided that public service activities not subject to VAT include: "Public services related to sanitation and drainage in streets and residential areas, including waste collection, cleaning, transportation, treatment, sewage treatment, flood control in streets and residential areas." These services are determined as public services based on the non-profit nature of their business purpose for the common benefit of society and community; they are paid by the State or charged according to prescribed rates by organizations and individuals.
Services not classified as public services mentioned above must be subject to VAT. The applicable VAT rate for these services is as follows:
+ Collection of waste, soil, refuse, pumping out from septic tanks… and transportation of such wastes shall apply a 5% tax rate.
+ Repairing drainage ditches, repairing houses, repairing ancillary structures, cleaning transport vehicles… shall apply a 10% tax rate.
The Ministry of Finance hereby informs the Provincial and Central City Tax Departments to be aware and guide implementation accordingly. Cases previously handled differently from this guidance do not require retroactive collection or recalculation of VAT.
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