Question:
The bank issues credit cards to customers. In the fee schedule, there is an item called ‘foreign exchange expenditure management fee.’ This fee is incurred when customers use their credit cards to purchase goods and services in foreign currency. For example, a customer pays for a hotel stay abroad in USD using the bank’s credit card. At the end of the billing cycle, the bank converts this amount to VND at the corresponding exchange rate plus an additional fee. This fee is referred to as the foreign exchange expenditure management fee. Is this fee subject to VAT?
Answer:
In accordance with Article 11 of Circular No. 219/2013/TT-BTC dated December 31, 2013, by the Ministry of Finance, which provides guidance on Value Added Tax (VAT), specifying a VAT rate of 10%, and Clause 3 of Article 1 of Circular No. 26/2015/TT-BTC dated February 27, 2015, by the Ministry of Finance, amending and supplementing point a, Clause 8 of Article 4 (as amended and supplemented at Article 8 of Circular No. 151/2014/TT-BTC dated October 10, 2014, by the Ministry of Finance), which stipulates the objects not subject to VAT, it is determined that: In the case where the bank charges customers a fee for foreign exchange expenditure management, this fee is subject to VAT at a rate of 10%.
