Inquiry: The Management Board of An Binh 1 Building, 3 Tran Nguyen Dan, Dinh Cong Ward, Hoang Mai District, Hanoi City would like to present a matter regarding VAT as follows: The residents of the Building have been paying 10% VAT for the following items: (i) Service fees for condominium management and operation, and (ii) Fees for parking cars and motorcycles in the building's basement. According to Clause 2, Article 106 of the Housing Law, the service fees for condominium management do not include parking fees.

According to Clause 2, Article 31 of the regulation on the management and use of condominiums issued with Circular No. 02/2016/TT-BXD of the Ministry of Construction, the cost of condominium management is calculated by multiplying the management service fee by the apartment's usable area (m²) or other non-apartment areas in the building.

According to Decrees 15/2022/ND-CP, 44/2023/ND-CP, and 94/2023/ND-CP of the Government, the "real estate business activities" sector is excluded from the VAT reduction to 8%. Accordingly, the "residential real estate management services based on fees or contracts" - industry code 6810921, including "management services related to multifunctional apartments (or multi-purpose buildings with the main purpose of residential use)," as specified in Appendix I attached to these Decrees, will be excluded and will not benefit from the VAT reduction to 8%.

Also, according to these Decrees, the "transportation and warehousing" sector is not excluded from the entities eligible for the VAT reduction. Accordingly, the "management activities of parking lots, vehicle storage for road vehicles, industry code 52253," including the management and storage activities at car parks, parking spots for cars, motorcycles, and other road vehicles, which belong to the "transportation and warehousing" sector (Decision 27/2018/QD-TTg dated July 6, 2018), are also not excluded and thus will be eligible for the 8% VAT rate instead of 10%.

However, since February 1, 2022, due to a lack of information, the residents of the building have still been paying 10% VAT for parking fees for cars and motorcycles in the building's basement. According to the information we have, parking in parking lots and at some condominiums in Hanoi and Ho Chi Minh City is eligible for the 8% VAT rate according to the aforementioned Decrees.

We would like to ask: Does parking in the basement of An Binh 1 Building fall under industry code 52253 of the "transportation and warehousing" sector to be eligible for the 8% VAT rate under the aforementioned Decrees? If so, from when would this rate be applicable, and what procedures need to be followed?

Response: