Vietnam’s new Law on Value Added Tax (VAT) No. 48/2024/QH15 introduces significant changes that will take effect on July 1, 2025. The 2024 Law on VAT, number 48/2024/QH15, consists of 4 chapters and 17 articles. These updates impact VAT rates, deductible conditions, taxpayer obligations, and compliance requirements. Understanding these changes is essential for businesses operating in Vietnam to ensure compliance. This article breaks down the key amendments, compares them with Law No. 13/2008/QH12, and highlights actionable insights to help you navigate these changes seamlessly.
| N.o | Items | Law No. 48/2024/QH15 | Law No. 13/2008/QH12 |
|---|---|---|---|
| 1. | Goods and services subject to VAT | The following items are subject to VAT: • Fertilizers; specialized machinery and equipment for agricultural production; offshore fishing vessels; • Securities depository; market organization services of stock exchanges or securities trading centers • Public post and telecommunications and universal Internet services under the Governments programs. • Public services on sanitation and water drainage in streets and residential areas; maintenance of zoos, flower gardens, parks, street greeneries and public lighting; | These objects are not subject to VAT |
| New items not subject to VAT | Goods imported as donations for recovery from natural disasters, epidemics, or wars as per Government regulations | These items are not defined in the current VAT law | |
| 2. | Exports from raw natural resources or minerals | Per Article 5, Law No. 48/2024/QH15 stated Exported products are raw natural resources or minerals that have been processed into other products that are not subject to VAT and must be applied according to the List prescribed by the Government. | As per Article 1, Law No. 106/2016/QH13 requires those exports with a total value of natural resources plus energy must be at least 51% of the product price are not subject to VAT. |
| 3. | Change in tax rate | Tax rate 5% for following items: • fertilizers • fishing vessels at sea | Fertilizers and fishing vessels at sea are not subject to VAT |
| Tax rate 10% for the following items: • Unprocessed forest product • Sugar; by-products in sugar production, including molasses, bagasse, sludge; • Specialized equipment and tools for teaching, research, and scientific experiments • Cultural, exhibition, physical training and sports activities; art performances; film production; film import, distribution and screening; | Previously, these items were subject to VAT rate of 5% | ||
| 4. | Conditions for deduction of VAT | As per 2b, Article 14 of this new regulation, all goods and services purchased must be paid by non-cash payment method, except in special cases specified by the Government (In 2025, there is a draft Decree to have detail guidance for new VAT Law and per this draft Decree that the companies are required to have non-cash payment documents for purchased goods and services (including imported goods) with a value of VND 5 million or more, including VAT). Point c, Clause 2, Article 14 of the 2024 VAT Law requires additional documents for input VAT deduction for exported goods and services, including: • Packing list • Bills of lading • Goods insurance documents (if any) Exceptions apply as prescribed by the Government. | Goods and services purchased with a value of less than 20 million VND do not need non-cash payment to deduct VAT according to regulations in Clause 2, Article 12 of the Law on Value Added Tax 2008. This law did not require additional documents as stated in Point c, Clause 2, Article 14 of the 2024 VAT Law. Per point c, Clause 2, Article 12, VAT law 2008 requires the following documents: • Contract with an external party • Invoices for the sale of goods and services • Bank payment documents • Customs declarations for exported goods |
| 5. | VAT refund | Per Article 15 of the Law on Value Added Tax 2024 has added 01 more case of VAT refund. Accordingly, VAT will be refunded for business establishments that only produce goods and provide services subject to a VAT rate of 5% if the input VAT amount that has not been fully deducted is from 300 million VND or more after 12 months or 4 quarters. | This case is not stated for VAT refund |
| 6. | Goods and services of the business households or individuals | According to Point 25, Article 5 of VAT Law No. 48, businesses with an annual revenue threshold of VND 200 million or less are not subject to VAT. | According to Point 12, Article 3 of Decree 209/2013/ND-CP, businesses with an annual turnover of VND 100 million or less are not subject to VAT. |
| 7. | Taxpayer | Additional provisions on Taxpayers are as below: • Foreign suppliers without a permanent establishment in Vietnam must withhold and pay taxes for e-commerce or digital platform-based business activities. • E-commerce and digital platform managers are responsible for withholding and paying taxes on behalf of individuals conducting business on their platforms. | There is no regulation on those taxpayers. |
| 8. | Prohibited Acts in VAT Deduction and Refund | Per Article 13, the 2024 VAT Law clearly stipulates prohibited actions as follows: • Buying, selling, or brokering invoices. • Creating fake transactions. • Issuing invoices during business suspension. • Using illegal invoices and documents. • Not transferring electronic invoice data to tax authorities. • Falsifying or destroying invoice information systems. • Engaging in bribery related to tax deductions and refunds. • Colluding to use illegal invoices for tax evasion. | There is no regulation on those taxpayers. |
The latest updates to Vietnam’s VAT law mark a significant shift in the country’s tax landscape, introducing stricter compliance measures, updated tax rates, and clearer guidelines for deductions and refunds. Businesses must proactively adapt to these changes—whether by revising accounting practices, ensuring non-cash payment documentation, or understanding new exemptions for specific goods and services.
Staying informed and prepared is critical to avoiding penalties. At RBA WTS Vietnam, our team of experts is ready to assist you in interpreting these updates and implementing compliant strategies tailored to your needs. For further guidance or questions, contact us today to ensure your business remains ahead of these regulatory developments.
Disclaimer: This summary is for informational purposes only and does not constitute legal advice. Consult a professional for specific recommendations.
