Phana Manufacturing and Trading Co., Ltd (HCMC) specializes in manufacturing tools for people with disabilities. Through the receiving and responding System to proposals of businesses, the Company would like to request to have a guidance on  confirmation of  the products and apply tax policies for the Company's products.

The company refers to Clause 24, Article 4 of Circular No. 219/2013 / TT-BTC dated December 31, 2013 of the Ministry of Finance guiding VAT which regulates subjects not subject to VAT as follows:

"Prosthetic body parts, including those permanently implanted into the human body; crutches, wheelchairs, and other special instruments serving the disabled.".

The Phana Manufacturing and Trading Co., Ltd. proposes to clarify which tools are called "other specialized tools for the disabled" and which agencies have the authority to review and certify that the Company's products are specialized products for disabled people?

In particular, is the product of mobility walkers (L letter) for other specialized products for disabled people or not and how much isthe tax rate?

Regarding this issue, the General Department of Taxation - Ministry of Finance gives the following opinion:

Clause 24, Article 5 of the Law on VAT stipulates subjects not subject to tax as follows:

“24. Prosthetic body parts, including those permanently implanted into the human body; crutches, wheelchairs, and other special instruments serving the disabled”.

In Clause 2, Article 8 of the Law on VAT, the 5% tax rate is prescribed as follows:

“Medical equipment, instruments, cotton, sanitary pads; preventive and curative medicines; pharmaceutical and pharmaceutical products being raw materials for production of curative and preventive medicines”.

Clause 24, Article 4 of Circular No. 219/2013 / TT-BTC dated December 31, 2013 of the Ministry of Finance, the following subjects are not subject to tax as follows:

“24. Prosthetic body parts, including those permanently implanted into the human body; crutches, wheelchairs, and other special instruments serving the disabled”.

Clause 11, Article 10 of Circular No. 219/2013 / TT-BTC guides the 5% tax rate as follows:

“11. Medical equipment include radiographic equipment, equipment and instruments for surgery and treatment; ambulances; instruments for blood pressure measurement, cardiography, blood infusion, syringes; birth control equipment, and other medical equipment certified by the Ministry of Health. Cotton wool, bandages, gauze pads, and medical tampons; medicines including finished medicines and raw materials, except for functional foods; vaccines; bioproducts, distilled water to mix with injectable medicines or intravenous fluids; chemicals used for testing and sterilization; caps, clothing, facemasks, gloves, boots, medical towels, breast implants and skin fillers (not including cosmetics)..

Identify specialized tools for the disabled

On May 31, 2018, the General Department of Taxation issued an Official Letter No. 2124 / TCT-CS to consult with the Ministry of Health about the identification of specialized tools for disabled people. On June 25, 2018, the Ministry of Health issued an Official Letter No. 3579 / TB-CT in response as follows:

- Based on the list of medical equipment subject to specialized management by the Ministry of Health, the commodity codes shall be determined according to Vietnam's List of Exports and Imports (promulgated together with Circular No. 14/2018 / TT-BYT dated May 15, 2018 of the Ministry of Health), products that are commonly used medical equipment for the disabled are listed and described in item groups 8713 and 9021.

- Pursuant to the VAT Tariff included in the Ministry of Finance's Circular No. 83/2014 / TT-BTC dated June 26, 2014, guiding the implementation of VAT under Vietnam's List of Imports and Products Above codes are not subject to VAT. Particularly for the bandages of braces (except for braces attached to the human body, orthopedic appliances of heading 9021 are subject to 5% VAT).