On 26 November 2024, following the program of the 8th session of the 15th National Assembly, the amended Value Added Tax Law was officially passed, including significant changes which will take effect on 1 July 2025. The provision regarding the revenue threshold for households and individual business entities not subject to tax will take effect from 1 January 2026.
In this article, we will outline the notable changes in the amended VAT law based on the adopted draft law to help foreign investors prepare for compliance and strategic planning.
Key takeaways:
- Certain goods and services, such as fertilizers, specialized agricultural machinery, and offshore fishing vessels, will no longer be non-taxable and be subject to 5% VAT.
- Tax rate for some goods and services (e.g., cultural, exhibition, sports, and film production activities, sugar and by-products in sugar production) will increase from 5% to 10%.
- All purchased goods and services must have non-cash payment documents for VAT deduction, with some exceptions.
- VAT refunds are contingent on the seller’s status on VAT declaration and payment.
- The revenue threshold for VAT exemption will increase from 100 million VND to 200 million VND per year, benefiting small businesses.