What’s new in the Law on Value Added Tax (VAT) in 2025?
Recently, the National Assembly officially approved the Law on Value Added Tax (VAT), effective from July 1, 2025. Compared to current regulations, the 2025 VAT Law has many changes. Let’s join S4B Vietnam to summarize the new points based on the latest draft of the VAT Law.
1. Adjusting subjects not subject to VAT
Article 5 of the 2025 VAT Law adjusts the regulations on subjects not subject to VAT in Article 5 of the VAT Law No. 13/2008/QH12, amended by Law No. 31/2013/QH13, Law No. 106/2016/QH13 as follows:
1.1 Omitting some subjects not subject to VAT:
Omitting some subjects not subject to VAT according to current regulations, including:
Fertilizers; machinery and specialized equipment for agricultural production; offshore fishing vessels;
Securities depository; market organization services of stock exchanges or securities trading centers; other securities business activities…
1.2 Exported products are resources and 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.
Previously, the regulation stipulated that exported products are goods processed from resources and minerals with a total value of resources and minerals plus energy costs accounting for 51% or more of the product cost, which are not subject to VAT.
Key changes of Vietnam Law on Value Added Tax
1.3 Adding imported goods to support and sponsor the prevention of natural disasters, epidemics, and wars according to the Government’s regulations are not subject to VAT.
2. Amending the regulations on tax calculation prices for imported goods:
Currently, Article 7 of the Law on VAT stipulates that the tax calculation price for imported goods is the import price at the border gate plus import tax (if any), plus special consumption tax (if any) and plus environmental protection tax (if any). The import price at the border gate is determined according to the regulations on import tax calculation prices
In Article 7 of the Law on VAT 2025, the tax calculation price for imported goods is amended to be the import tax calculation value according to the provisions of the law on export tax, import tax plus import tax plus taxes that are additional import taxes according to the provisions of the law (if any), plus special consumption tax (if any) and plus environmental protection tax (if any).
3. Supplementing taxable prices for goods and services used for promotions
Article 7 of the Law on VAT supplements the provision: Taxable prices for goods and services used for promotions according to the provisions of the law on commerce, the taxable price is determined as 0.
What should business prepare for VAT in 2025
4. Adjusting tax rates of some goods and services
Article 9 of the Law on VAT adjusts tax rates of some goods and services as follows:
4.1. Supplementing some subjects applying 0% tax rate
- International transportation;
Construction and installation works abroad, in duty-free zones; - Goods sold in quarantine areas to individuals (foreigners or Vietnamese) who have completed exit procedures; goods sold at duty-free shops;
- Export services are services provided to foreign organizations and individuals,
4.2. Non-taxable products are transferred to 5% tax rate
- Fertilizers;
- Fishing vessels in offshore and sea areas;
- Peanut shelling machines; coffee hulling machines; coffee and wet rice processing machines; agricultural product dryers (rice, corn, coffee, pepper, cashew nuts…), seafood;
4.3. Products applying 5% tax rate are transferred to 10%
- Unprocessed forest products;
- Sugar; by-products in sugar production, including molasses, bagasse, sludge;
- Specialized equipment and tools for teaching, research, and scientific experiments
- Cultural activities, exhibitions, physical education, sports; art performances; film production; import, distribution, and screening of films.
5. Changing conditions for input VAT deduction
5.1. Purchase of goods and services under VND 20 million must have non-cash payment documents
Previously, goods and services purchased at a time with a value of less than VND 20 million did not need non-cash payment documents to deduct VAT according to the provisions of Clause 2, Article 12 of the Law on VAT.
However, according to Clause 2, Article 13 of the new Law, all purchased goods and services must have non-cash payment documents, except for some special cases as prescribed by the Government.
5.2. Supplementing some documents for input VAT deduction
According to Clause 2, Article 13 of the Law on VAT 2025, for exported goods and services, the packing list, bill of lading, goods insurance documents (if any); except for some special cases as prescribed by the Government, input VAT can be deducted.
This is a content that has not been regulated before.
6. Additional cases of tax refund
Article 14 of the 2025 Law on VAT adds the following cases of tax refund:
Business establishments that only produce goods and provide services subject to a 5% VAT rate and have an input VAT amount of VND 300 million or more that has not been fully deducted after 12 months or 04 quarters will be eligible for a VAT refund.
The above is a summary of the new points of the 2025 Law on Value Added Tax. To update the latest legal documents on Tax, please contact S4B Vietnam!
>>>Read more: Vietnam reviews Personal Income Tax from e-commerce
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