ChatGPT and AI application services purchased from foreign providers are subject to 10% VAT
RegHub explainer by New MarketerLast updated:
This explanation was generated by AI and checked by an automated AI review, not by a human expert. It is not legal, tax or accounting advice and may contain errors. Check the official document before you rely on it.
Hanoi Tax Department (Sub-department 6) determined that ChatGPT packages from OpenAI and AI application services purchased from foreign providers are **not** software services under Article 3(10) of Decree 71/2007/ND-CP. As a result, these services are **not VAT-exempt** and are subject to the standard **10% VAT rate**. Based on Article 4 of Decree 181/2025/ND-CP (effective 01/07/2025) on non-taxable objects and Article 19 of the same decree on the 5% rate, the tax authority concluded that ChatGPT/AI packages qualify as goods and services supplied by foreign providers to organisations and individuals in Vietnam via digital commerce platforms, which attract 10% VAT. When reselling ChatGPT and AI application packages to domestic customers, the company must issue VAT invoices applying the **10% VAT rate** - not the VAT-exempt rate.
Question
A&C International Trading and Service Company Limited asked about VAT treatment for ChatGPT packages from OpenAI and AI application services purchased from foreign providers for use and resale in Vietnam: (1) Are these services considered software services exempt from VAT? (2) What VAT rate applies when reselling to domestic customers?
Official guidance
Hanoi Tax Sub-department 6 cited the following provisions:
- Article 3(10) of Decree 71/2007/ND-CP: defines software services as "activities directly supporting the production, installation, exploitation, use, upgrading, warranty and maintenance of software and similar activities related to software."
- Article 9 of Law No. 48/2024/QH15 dated 26/11/2024 on VAT rates: The 10% rate applies to goods and services not specified in clauses 1 and 2 of this article, including services provided by foreign suppliers without a permanent establishment in Vietnam to organisations and individuals in Vietnam via e-commerce channels and digital platforms.
- Article 4 of Decree 181/2025/ND-CP dated 01/07/2025: governs non-taxable objects.
- Article 19 of Decree 181/2025/ND-CP dated 01/07/2025: governs the 5% VAT rate.
Based on these provisions, the tax authority concluded:
- ChatGPT packages from OpenAI and AI applications are not software services.
- Since these services do not fall under the non-taxable or 5% categories in Articles 4 and 19 of Decree 181/2025/ND-CP, the 10% VAT rate applies.
Action points
- When purchasing ChatGPT/AI packages from foreign providers, treat them as services subject to 10% VAT - not as VAT-exempt software services.
- When reselling to domestic customers, issue output VAT invoices at the 10% VAT rate (do not apply the VAT-exempt rate).
- Review previously filed VAT returns for these services and correct any misfiled returns where the VAT-exempt rate was applied.
- For further clarification, contact Hanoi Tax Sub-department 6 (Business Support Management Team 1, Tel: 0243.355.74417) or refer to guidance at http://hanoi.gdt.gov.vn.