OFFICIAL LETTER NO. 2965/CT-CS GUIDING THE VALUE ADDED TAX POLICY ON SOFTWARE PRODUCTS AND SOFTWARE SERVICES
On May 12, 2026, the Tax Department issued Official Letter No. 2965/CT-CS guiding the application of the value-added tax (“VAT”) policy to software products and software services.
According to the guidelines of the tax authority, the application of the VAT exemption policy (not subject to VAT) for software products and software services must be based on specialized regulations on information technology, the digital technology industry, and relevant legal documents.
The Official Letter specifies:
- Software products and software services are not subject to VAT when they fully meet the identification criteria prescribed by the law on information technology, the digital technology industry, and related laws.
- Enterprises should work with the specialized management agency (the Ministry of Science and Technology) for guidance and confirmation on the nature of the provided products and services in case of any issues or complications.
The Official Letter indicates that the tax authority continues to apply a cautious approach to transactions in the information technology sector. Accordingly, enterprises should not assume that all activities related to technology or software are automatically subject to VAT exemption. Therefore, self-applying the VAT non-subject policy to products or services that do not meet the criteria could lead to the risk of tax arrears and penalties.
