Responding To Pressure, Vietnam Implements Lower VAT On Medical Device Imports

In a boon for international medical device manufacturers marketing their products in Vietnam, the country has lowered the value-added tax (VAT) on a range of imported medical device equipment from 10% to 5%.

The new tax rate, which went into force in August, has been long sought by manufacturers of medical devices, and is likely to make it significantly easier for Vietnamese medical facilities and patients to access needed medical equipment. It applies to a class of medical devices that use chemicals for testing and sterilization, diagnostic imaging equipment, surgical instruments, blood transfusion devices, orthopedic equipment, and devices to measure blood pressure, cardiac activity, and pulse.

Vietnamese authorities had lowered the VAT on medical devices by decree as long ago as 2016. But the regulatory language to implement the lower tax rate across the board was not similarly revised. That meant that entire classes of medical devices were still subject to the 10% tax rate.

More than 90% of medical devices used in Vietnam are produced abroad, and the VAT impasse became a major issue for foreign manufacturers. The European Chamber of Commerce called on Vietnam last June and again in December to amend the regulations.

Written by: Ames Gross – President and Founder, Pacific Bridge Medical (PBM)
Mr. Gross founded PBM in 1988 and has helped hundreds of medical companies with regulatory and business development issues in Asia. He is recognized nationally and internationally as a leader in the Asian medical markets. Mr. Gross has a BA degree, Phi Beta Kappa, from the University of Pennsylvania and an MBA from Columbia University.