Tax authorities: ChatGPT is not considered a software service eligible for VAT exemption.

The tax authorities have just addressed businesses' concerns regarding whether ChatGPT packages and AI applications are exempt from value-added tax (VAT), similar to software services.

A representative from a Hanoi- based company stated that their company purchases ChatGPT service packages from OpenAI and several other artificial intelligence (AI) applications from foreign providers for their own use and resale to customers in Vietnam.

The electronic document issued by OpenAI (in English) shows a value-added tax rate of 10%.

The company wishes to inquire with the tax authorities whether the aforementioned ChatGPT packages and AI services/applications are classified as software services and therefore exempt from value-added tax under Vietnamese tax law.

"In the case where the company resells ChatGPT packages and AI applications to domestic customers, when issuing output value-added tax invoices to customers, should we apply the VAT-exempt rate or the 10% rate?", the business wants specific guidance.

Cross-border AI services like ChatGPT are now being treated by tax authorities as services subject to regular VAT. Photo: Shutterstock

In response to the above issue, the Tax Department of Hanoi City stated that Clause 10, Article 3 of Government Decree No. 71/2007 stipulates: Software services are activities that directly support and serve the production, installation, exploitation, use, upgrading, warranty, maintenance of software and other similar activities related to software.

Article 9 of Law No. 48/2024/QH15 of the National Assembly stipulates: “A tax rate of 10% 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 organizations and individuals in Vietnam through e-commerce channels and digital platforms...”.

In addition, Article 4 of Government Decree No. 181/2025 stipulates the subjects not subject to tax, and Article 19 of this Decree stipulates the tax rate of 5%.

Based on the regulations mentioned above, Hanoi City Tax Department No. 6 stated that OpenAI's ChatGPT service packages and artificial intelligence (AI) applications are not software services.

If ChatGPT service packages and AI applications are not goods or services as defined in Articles 4 and 19 of Government Decree No. 181/2025, then a value-added tax rate of 10% must be applied.

This means that businesses reselling foreign AI services in Vietnam will have to charge a 10% output VAT, instead of being classified as tax-exempt like some software services previously.

The tax authorities note that, during the implementation of tax policies, if any difficulties arise, the company can refer to the guidance documents of the Hanoi City Tax Department or contact the Business Support Management Team 1 - Tax Branch 6 of Hanoi City for assistance.

What should household businesses with revenue under 1 billion VND do when the tax threshold changes? After the tax-exempt revenue threshold for household businesses was raised to 1 billion VND/year, many households that had filed their Q1/2026 tax returns under the old regulations are confused about how to handle the submitted documents.

Source: https://vietnamnet.vn/co-quan-thue-chatgpt-khong-duoc-xem-la-dich-vu-phan-mem-de-mien-vat-2517826.html