VAT and PIT Rates for Household Business Making Bamboo Lanterns, Teaching Crafts, and Selling Coffee
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The Ministry of Finance provided guidance on VAT and PIT rates for the Tieng Vong Pho household business (Da Nang) operating multiple activities: bamboo lantern manufacturing (code 3290), lantern-making and coffee-brewing instruction (codes 8559, 8552), lantern and coffee retail (codes 4773, 5630), and craft experience services. Per guidance from the Da Nang Tax Department (issued June 25, 2014, effective July 1, 2014), based on Decree 65/2013/NĐ-CP and the PIT Law: Craft experience and coffee-brewing experience services are classified as distribution/goods supply services - 10% VAT, 1% PIT. Lantern and coffee bag sales - 10% VAT, 0.5% PIT. Art teaching and artistic education - 0% VAT (exempt), 1.5% PIT. The household business applies presumptive or percentage-of-revenue tax calculation methods.
Question
Tieng Vong Pho household business (507 Hai Ba Trung, Da Nang, Tax ID 049094009967) conducts multiple activities:
- Code 3290: Bamboo lantern manufacturing
- Codes 8559/8552: Teaching lantern-making, coffee-brewing, and painting
- Code 4773: Lantern retail
- Code 5630: Beverage service (coffee)
Three main service/product categories: Lantern craft experience service (customers take home finished lantern); Coffee-brewing experience service (customers drink on-site); Lantern and bagged coffee sales.
Guidance Content (from images)
Per Da Nang Tax Department Decision dated June 25, 2014 (effective July 1, 2014):
VAT Rates:
- Lantern craft experience and coffee-brewing experience services: 10% (distribution/goods supply services)
- Lantern and coffee bag sales: 10%
- Painting instruction, artistic education: VAT-exempt (0%)
PIT Rate on Revenue:
- Experience services (lantern crafting, coffee-brewing): 1%
- Lantern and coffee bag sales (goods distribution): 0.5%
- Painting instruction, artistic education: 1.5%
Legal Basis: Decree 65/2013/NĐ-CP; PIT Law; Article 7 VAT Law; Circular 219/2013/TT-BTC dated December 31, 2013; Decision No. 1617/QD-CT dated June 25, 2014 of the Da Nang City Tax Department.