VAT Treatment for Household Businesses Providing Tutoring Services
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The Ministry of Finance clarifies VAT policy for individual household businesses operating in education and vocational training. Under VAT Law No. 48/2024/QH15 and Decree No. 181/2025/ND-CP, teaching and vocational training activities conducted in accordance with education and vocational training law are VAT-exempt. Additionally, under Law No. 149/2025/QH15 amending the VAT Law, goods and services provided by household businesses with annual revenue of VND 500 million or less are also VAT-exempt. The Ministry advises the inquirer to review applicable regulations against their actual activities to determine the correct treatment.
VAT Treatment for Household Businesses Providing Tutoring Services
Legal Basis
- Article 5(13) of VAT Law No. 48/2024/QH15: Teaching and vocational training activities conducted in accordance with education and vocational training law are VAT-exempt.
- Article 4(7) of Decree No. 181/2025/ND-CP dated 01/7/2025: Elaborates that teaching and vocational training activities are VAT-exempt; collection and disbursement activities on behalf of educational institutions are also VAT-exempt.
- Article 5(25) as amended by Law No. 149/2025/QH15: Goods and services of household/individual businesses with annual revenue not exceeding VND 500 million are VAT-exempt.
- Circular No. 69/2025/TT-BTC dated 01/7/2025: Sets out the percentage-based VAT calculation rates applicable to various goods and services categories.
Legal Definition of Education
Under Education Law No. 43/2019/QH14, education encompasses formal education (structured courses in educational institutions leading to diplomas) and continuing education (flexible formats meeting lifelong learning needs). Knowledge and skill development centers fall under continuing education per Decree No. 125/2024/ND-CP.
Application Guidance
The Ministry of Finance did not issue a specific ruling on the inquirer's case, instead directing the inquirer to compare their actual activities (industry codes 8559, 8522, 8523) against applicable regulations. If teaching activities satisfy the conditions of education or vocational training law, they are VAT-exempt. If annual revenue does not exceed VND 500 million, the activities are also VAT-exempt under Article 5(25).