Application of 5% Tax Rate for Selling Membership Cards of Sports Gyms

Here is the response from the Tax Department of Hanoi sent to the Tax Sub-department of Tay Ho district in Official Dispatch 74119/CT-TTHT dated December 2, 2016, regarding the application of VAT rates for the revenue from membership cards, training packages with trainers, Yoga cards, etc., of businesses with operating licenses for sports activities.

According to the guidelines at Point a, Clause 13, Article 10 of Circular 219/2013/TT-BTC guiding the implementation of the VAT Law and Decree 209/2013/ND-CP detailing and guiding the implementation of certain articles of the VAT Law, the 5% tax rate applies to:

Cultural activities, exhibitions, and sports activities, except for revenues such as: sales of goods, leasing of venues, and booths at fairs and exhibitions.

Thus, if an enterprise or company is granted a certificate of eligibility for sports activities by a competent authority and sells gym membership cards (including membership for fitness, bodybuilding, and yoga), where the training package includes an instructor and members are allowed to use the gym equipment, this activity is subject to the 5% VAT rate.

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