10 ĐIỂM MỚI NỔI BẬT CỦA LUẬT THUẾ GIÁ TRỊ GIA TĂNG NĂM 2024 CÓ HIỆU LỰC TỪ NGÀY 01/07/2025 / 10 NOTA

On 26 November 2024, the Law on Value-Added Tax 2024 (VAT Law 2024), replacing the Law on Value-Added Tax 2008 as amended and supplemented in 2013, 2014, and 2016 (VAT Law 2008), was officially passed by the National Assembly and will take effect on 01 July 2025. This article highlights the major changes in VAT policy effective from 01 July 2025 as follows:

1. Supplementing regulations on taxpayers

Article 4 of the VAT Law 2024 has added new categories of taxpayers engaging in e-commerce and digital platform-based business activities compared with the regulations effective prior to 01 July 2025, specifically:

- Foreign suppliers without a permanent establishment in Việt Nam conducting e-commerce or digital platform-based business activities with organisations and individuals in Việt Nam (hereinafter referred to as “foreign suppliers”);

- Organisations managing foreign digital platforms shall withhold and pay on behalf of the tax obligations of foreign suppliers; enterprises in Việt Nam applying the VAT credit method that purchase services from foreign suppliers without a permanent establishment in Việt Nam through e-commerce channels or digital platforms shall withhold and pay on behalf of such foreign suppliers;

-Organisations managing e-commerce marketplaces or digital platforms with payment functions shall withhold, declare, and pay VAT on behalf of business households and individual businesses operating on e-commerce marketplaces or digital platforms.

2. Adjustment of VAT-exempt objects

Article 5 of the VAT Law 2024 introduces several adjustments to the regulations on goods and services not subject to VAT compared with previous provisions, specifically:

- Removal of certain VAT-exempt objects under the VAT Law 2008, such as: fertilizers; specialised machinery and equipment serving agricultural production; offshore fishing vessels; securities depository services; market organisation services of stock exchanges or securities trading centres; other securities trading activities, etc.

- Addition of exported products made from exploited natural resources and minerals which have been processed into other products as VAT-exempt, subject to the List prescribed by the Government. Previously, the regulation stipulated that exported products processed from natural resources and minerals in which the total value of resources and minerals plus energy costs accounted for at least 51% of the product cost would fall under VAT exemption.

- Addition of imported goods donated or sponsored for disaster prevention, disaster relief, epidemic control, and war relief in accordance with Government regulations as VAT-exempt objects.

- In addition, the VAT Law 2024 clarifies certain groups of goods and services to align with specialised laws and avoid implementation obstacles, such as securities trading, derivative products, defence and security products, etc.

3. Amendments and supplements to regulations on taxable price

Article 7 of the VAT Law 2024 revises and supplements the rules on taxable price compared with previous regulations, specifically:

- Amendment of taxable price regulations for imported goods to ensure consistency with the laws on export and import duties: Whereas Article 7 of the VAT Law 2008 (as amended in 2013) stipulated that the taxable price for imported goods was the import price at the border gate plus import duty (if any), plus excise tax (if any), and plus environmental protection tax (if any), with the import price at the border gate determined under regulations on taxable price of imported goods; under Article 7 of the VAT Law 2024, the taxable price for imported goods has been revised to be the customs value for import tax calculation in accordance with the law on export and import duties, plus import duty, plus additional import-related taxes as prescribed by law (if any), plus excise tax (if any), and plus environmental protection tax (if any).

- Addition of regulations on the determination of deductible land use right value when calculating taxable price in real estate business activities, as well as taxable price regulations for specific business activities (such as electricity production by Vietnam Electricity Group; transportation and loading/unloading; package tour services; pawn services; VAT-liable books sold at the published price (cover price); etc.) in accordance with Government regulations to suit current circumstances.

- Addition of regulations on taxable price for promotional goods and services in accordance with the Law on Commerce, under which the taxable price shall be determined as zero.

4. Adjustment of VAT rates for certain goods and services

Article 9 of the VAT Law 2024 adjusts the VAT rates for several goods and services as follows:

- Products previously VAT-exempt now subject to 5% VAT, including fertilizers and fishing vessels operating in marine areas.

- Products previously subject to 5% VAT now increased to 10% VAT, including unprocessed forest products; sugar; by-products of sugar production such as molasses, bagasse, and filter mud; specialised equipment and instruments used for teaching, research, and scientific experiments; cultural, exhibition, physical training and sports activities; art performances; film production; importation, distribution, and screening of films.

5. Addition of certain objects subject to 0% VAT

Clause 1, Article 9 of the VAT Law 2024 adds new categories subject to 0% VAT, including:

- International transportation;

- Construction and installation works overseas or in non-tariff zones;

- Goods sold in restricted areas to individuals (foreigners or Vietnamese nationals) who have completed exit procedures; goods sold at duty-free shops;

- Exported services, including vehicle leasing services for use outside the territory of Việt Nam; services in aviation and maritime sectors provided directly for international transportation or through agents.

6. Amendments and supplements to conditions for input VAT credit

Article 14 of the VAT Law 2024 revises and supplements several conditions for input VAT credit compared with Article 12 of the VAT Law 2008:

(i) Before 01 July 2025, for goods and services purchased with a value of under VND 20 million per transaction, non-cash payment documents were not required for input VAT credit in accordance with Clause 2, Article 12 of the VAT Law 2008. However, under Clause 2, Article 14 of the VAT Law 2024, all purchased goods and services must have non-cash payment documents, except for specific cases as stipulated by the Government.

(ii) Addition of provisions allowing uncredited input VAT to be included either in deductible expenses for corporate income tax purposes or in the initial value of fixed assets in accordance with the law on corporate income tax.

(iii) Addition of input VAT credit regulations in the following cases: goods and services forming fixed assets for employees’ use; capital contribution in the form of assets; goods and services purchased under an authorisation arrangement where the invoice is issued under the name of the authorised organisation or individual; fixed assets being passenger cars with up to 09 seats; manufacturing and business establishments operating under a closed production model with centralised accounting, subject to Government regulations.

(iv) Addition of certain documents (packing lists, bills of lading, cargo insurance documents) (if any) as conditions for input VAT credit with respect to exported goods and services.

7. Amendments to regulations in cases where businesses detect errors in input VAT declaration and credit

Under Point đ, Clause 1, Article 12 of the VAT Law 2008 (as amended in 2013), if a business establishment detected errors in declared or credited input VAT, it was allowed to make supplementary declarations and credits before the tax authority announced a tax inspection or audit decision at the taxpayer’s premises. However, under Point đ, Clause 1, Article 14 of the VAT Law 2024, the regulation has been revised as follows: if a business establishment detects errors in declared or credited input VAT, it may declare tax before the tax authority or competent authority announces a tax inspection or audit decision, specifically:

- Declaration in the period of occurrence where the supplementary declaration increases tax payable or reduces refundable tax; in this case, the taxpayer must pay the additional tax payable or return the corresponding refunded tax amount, and pay late payment interest to the state budget (if any).

- Declaration in the period of detection where the supplementary declaration reduces tax payable, or only increases or reduces the amount of input VAT carried forward to the subsequent month or quarter.

8. Addition of cases eligible for VAT refund

Article 15 of the VAT Law 2024 adds provisions on VAT refunds in the case where a business establishment exclusively produces goods or provides services subject to the 5% VAT rate, if uncredited input VAT amounts to VND 300 million or more after 12 months or four quarters; in such cases, the establishment is entitled to a VAT refund.

The Law also adds a provision that goods imported and subsequently re-exported to another country are not eligible for VAT refund.

It further clarifies cases of VAT refund related to investment projects; VAT refunds for exported goods and services; and denial of VAT refund for investment projects of business establishments engaged in conditional business sectors if they have not yet satisfied business conditions as prescribed under the Investment Law, or fail to maintain such conditions during operation.

Additional provisions are introduced on refund conditions and the responsibilities of taxpayers and tax authorities in processing VAT refunds to ensure feasibility in implementation.

The Law also removes the regulation on VAT refunds related to ownership conversion, enterprise transformation, merger, consolidation, division, or separation.

9. Codification of the time of VAT determination

Previously, the time of VAT determination was only guided in decrees and circulars. It is now officially stipulated in Article 8 of the VAT Law 2024, while also adding specific rules for the time of VAT determination for certain goods and services as prescribed by the Government in Clause 2 of this Article.

10. Raising the revenue threshold for household and individual businesses subject to VAT

Currently, under Circular 40/2021/TT-BTC, household businesses and individual businesses with annual revenue from production and business activities of VND 100 million or more must pay VAT. However, under Clause 25, Article 5 of the VAT Law 2024, goods and services of household and individual businesses with annual revenue of VND 200 million or less are not subject to VAT.

Accordingly, under the new regulation, the revenue threshold for household and individual businesses subject to VAT is increased to VND 200 million or more, instead of the current threshold of VND 100 million.

Note: The revenue threshold for household and individual businesses not subject to VAT shall take effect from 01 January 2026.