The 2024 VAT Law, passed by the National Assembly on November 26, 2024, and effective from July 1, 2025, introduces significant changes aimed at increasing transparency and efficiency in Vietnam’s business environment. DNP Viet Nam Law Firm will now focus on VAT and refund regulations for FDI investment projects in the high-tech sector.
1. Adjustments to VAT-Exempted Goods and Services:
– Certain goods, previously VAT-exempt under Article 5 of the 2008 VAT Law, will now be taxable. These include:
- Fertilizers
- Agricultural machinery and equipment
- Offshore fishing vessels
- Securities custody services
- Stock exchange operations
– New exemption criteria: Exported goods derived from extracted resources and minerals that have undergone further processing will be VAT-exempt based on a government-issued list.
2. Revised VAT Calculation for Imported Goods
Legal basis: Article 7, 2024 VAT Law
The taxable value of imported goods will be determined as follows:
– Customs valuation plus:
- Import duties
- Special consumption tax (if applicable)
- Environmental protection tax (if applicable);
3. VAT Calculation for Promotional Goods and Services
Under Article 7 of the 2024 VAT Law, promotional goods and services will have a taxable value of zero, following regulations on commercial promotions.
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4. Changes in VAT Rates for Certain Goods and Services:
– Newly added goods/services subject to a 0% VAT rate:
- International transportation
- Construction and installation projects outside Vietnam or in free trade zones
- Goods sold in duty-free stores or isolation zones
- Export services, including leasing transport equipment, aviation, and maritime services for international transportation
– Tax rate adjustments:
+ From VAT-exempt to 5% VAT:
- Fertilizers
- Offshore fishing vessel
+ From 5% to 10% VAT:
- Unprocessed forestry products
- Sugar and sugar by-products
- Equipment and instruments used in teaching, research, and scientific experiments
- Cultural, exhibition, sports, and entertainment activities
- Film production, import, distribution, and screening
5. Additional Cases Eligible for 0% VAT
Legal basis: Clause 1, Article 9, 2024 VAT Law
The 2024 VAT Law expands the scope of 0% VAT to include:
– International transportation
– Construction and installation projects abroad or in free trade zones
– Sales of goods in duty-free areas and isolation zones
– Export services, including:
- Leasing of transport vehicles
- Aviation and maritime services for international transport
6. New Conditions for VAT Deduction:
– Purchases of goods/services valued at over VND 20 million must have non-cash payment proof to qualify for VAT deduction (Clause 2, Article 14, 2024 VAT Law).
– Expanded deductible documents for input VAT include:
- Packing lists
- Bill of lading
- Cargo insurance documents (if applicable)
7. Expanded VAT Refund Eligibility:
According to Article 15 of the 2024 VAT Law, businesses with uncredited input VAT of at least VND 300 million for 12 consecutive months or four quarters will be eligible for a refund.
The above information is for reference only. For further details, please contact us using the information below
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DNP VIET NAM LAW FIRM
Contact:
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