Vietnam’s New VAT Law Takes Effect on July 1, 2025

A new VAT Law 48/2024/QH15, will replace the existing VAT Law No. 13/2008/QH12 and its amendments starting July 1, 2025. The updated law aims to simplify regulations, broaden the taxpayer scope, adjust VAT exemption thresholds, and redefine VAT rates for specific goods and services.

Key Changes

• Expanded Taxpayer Definition: Foreign suppliers without a permanent establishment in Vietnam, including those providing e-commerce and digital platform services to both businesses and individuals, will now be subject to VAT obligations.
• Clarified VAT Liability Timing: VAT liability will be determined based on:
  • The transfer of ownership or usage rights (for goods).
  • The completion of services.
  • The issuance of an invoice, regardless of whether payment has been received (for both goods and services).
• Higher VAT Exemption Threshold: The exemption threshold for businesses, households, and individuals will increase from 100 million VND (≈ 3,820 EUR) to 200 million VND (≈ 7,640 EUR).

Adjusted VAT Rates

• 0% VAT: Applies to exported goods and services consumed outside Vietnam and those provided directly to organizations in tax-free zones, with an added requirement that they must support export production activities.
• 5% VAT: Now applies to specialized agricultural machinery, animal feed, fertilizers, and offshore fishing vessels, which were previously VAT-exempt.
• 10% VAT: Applies to e-commerce and digital platform services provided by foreign suppliers without a presence in Vietnam, including film production, import, and distribution (previously taxed at 5%).

Additional Considerations

Certain products and services, such as plant and forest products, plant breeding materials, and various types of insurance, will have more detailed not-subject-to-VAT classifications.

To support economic recovery, Resolution No. 174/2024/QH15 extends the temporary VAT reduction from 10% to 8% for selected goods and services until June 2025, continuing the measures introduced under Resolution No. 43/2022/QH15.

There’s more you should know about e-invoicing in Vietnam – learn more about the new and upcoming regulations.