SPECIFIC TAX TREATMENT FOR ENTERPRISES 

In practice, many enterprises register under the business line of “other education not elsewhere classified” (typically covering short-term courses, soft skills training, or foreign language programs without vocational certification) but have not fully completed the required procedures for registering vocational education activities in accordance with the Law on Vocational Education.

This shortcoming is not merely an issue of business eligibility; it also leads to direct tax implications.

Specifically, under the Law on Value-Added Tax, training services that fully meet legal conditions (including a vocational education license or certification of eligibility for training activities) may fall into the category of non-taxable services or be eligible for preferential tax rates (commonly understood in practice as 0% in certain specific cases).

Conversely, where an enterprise provides general training services without obtaining the proper sector-specific license, tax authorities have grounds to apply the standard 10% VAT rate applicable to ordinary services.

From a risk management perspective, failure to properly register the scope of business activities and obtain the necessary sub-licenses may result in tax arrears, administrative penalties, and potential invalidation of output invoices.

Accordingly, enterprises should review the registered business lines stated in their Enterprise Registration Certificate, while also assessing the nature of the training services they provide to determine whether they fall within the scope of vocational education regulations.

If so, it is necessary to carry out the relevant licensing procedures to ensure compliance and to take advantage of lawful tax incentives.

This is not only a compliance requirement but also an effective long-term cost optimization strategy.