Can the 0% VAT Rate Be Applied to Repair Services Conducted Outside the Export Processing Zone?

What are Repair Services?

Currently, there is no specific legal document that precisely defines repair services. However, based on practical understanding, repair services can be described as one or a combination of the following activities: inspection, restoration, refurbishment, and functional upgrades of machinery, equipment, and other items. During the repair process, if any parts are no longer usable, the repair service will replace them with new components or spare parts.

Are Repair Services Conducted Outside the Export Processing Zone Eligible for the 0% VAT Rate?

According to the General Department of Taxation, if a company provides repair services to an export processing enterprise, but the services are performed and consumed at the repair company's premises (located outside the non-tariff zone), these services do not meet the conditions for the 0% VAT rate as specified in Article 9 of Circular 219/2013/TT-BTC.

Referring to Article 11 of Circular 219/2013/TT-BTC, which specifies a 10% VAT rate, repair services performed outside the export processing zone are not eligible for the 0% VAT rate. Instead, they must apply the 10% VAT rate as regulated by law.

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