8 New Tax Policies Effective from July 1, 2025 That Will Reshape Vietnam’s Economy

Starting July 1, 2025, several important tax regulations will officially take effect under Vietnam’s 2024 Value-Added Tax (VAT) Law and related guiding documents. These changes will significantly affect individuals, household businesses, enterprises, and e-commerce platforms nationwide.

These new tax policies aim to restructure the Vietnamese tax system, enhance transparency and fairness, and improve tax administration efficiency. Below are 8 key policies you should understand and prepare for:

• Replacing Tax Identification Numbers (TIN) with Personal Identification Numbers (PIN)

From July 1, 2025, all individuals, households, and business households will use their 12-digit Personal Identification Number (issued by the Ministry of Public Security) instead of their current tax identification number (TIN). The tax authority will synchronize the data automatically, with no need for taxpayers to re-register.

Benefits of this change:

• Enhances data consistency between civil and financial systems.
  
• Reduces the risk of duplicate or fraudulent tax IDs.
  
• Improves tax administration for individuals and small businesses.
  

• Changes to VAT-Exempt Categories

Several items currently exempt from VAT will be removed from the exemption list, including:

• Fertilizers, agricultural machinery, and offshore fishing vessels.

These goods will now be subject to a 5% or 10% VAT rate.

Conversely, certain imported items used for disaster relief, pandemics, or war aid will be added to the VAT-exempt list. This adjustment aims to:

• Eliminate unnecessary tax incentives.
  
• Ensure tax equity.
  
• Increase state budget revenues.
  

• New Rules for VAT Taxable Value on Imports

The taxable value for VAT on imported goods will be calculated as:
Import price + import duty (including additional amounts) + excise tax (if any) + environmental protection tax (if any).

Purpose of this adjustment:

• Ensure consistency across different tax types.
  
• Prevent under-declaration of taxable values.
  
• Boost transparency and government revenue.

Importing companies are advised to review their pricing structures to avoid tax shortfalls or future penalties.

• VAT Rate Adjustments for Certain Goods and Services

Effective July 1, 2025, the VAT rates for several goods and services will be revised:

a) 0% VAT will apply to:

• International transportation.
  
• Construction and installation services performed abroad.
  
• Exported goods to bonded zones and duty-free shops.
  
• International air and sea transportation services.

b) Shift from VAT-exempt to 5% VAT:

• Fertilizers.
  
  
• Offshore fishing vessels.

c) Increase from 5% to 10% VAT:

• Unprocessed forest products.
  
• Sugar and its by-products.
  
• Laboratory equipment.
  
• Services such as cultural and sporting performances, exhibitions, film production, and distribution.
  

• Promotional Goods Will Have a Zero Taxable Value

Under the new regulations, promotional goods (provided in compliance with Vietnam’s Trade Law) will have a taxable value of zero.

Benefits include:

• Encouraging transparent and lawful promotional campaigns.
  
• Stimulating domestic consumption.
  
• Reducing compliance costs, as businesses won’t need to account for promo items in taxable revenue.
  

• Stricter Requirements for VAT Input Tax Credits
  

Starting July 1, 2025, all transactions—regardless of value—must be paid via non-cash methods (e.g., bank transfers, e-wallets) to be eligible for VAT input tax deduction.

Additional documentation (e.g., bills of lading, insurance certificates) will also be required for claiming VAT refunds on exports.

This means businesses must move away from cash payments and digitize their procurement and accounting processes to maintain compliance.

• Expanded Conditions for VAT Refunds for Manufacturers

Businesses engaged in manufacturing or supplying goods/services subject to 5% VAT may claim VAT refunds if:

• After 12 months or 4 consecutive quarters, uncredited input VAT totals ≥ VND 300 million.

This policy helps businesses:

• Reclaim cash flow more efficiently.
  
• Ease financial pressure, especially for sectors with high input costs.
  

• E-Commerce Platforms Will Withhold and Pay Taxes on Behalf of Sellers

According to Decree 117/2025/NĐ-CP, effective July 1, 2025, e-commerce platforms such as Shopee, Tiki, Lazada, Amazon, etc., will be responsible for:

• Withholding value-added tax (VAT) and personal income tax (PIT) from household/individual sellers on the platform.
  
• Remitting the withheld taxes to the tax authorities.

This policy aims to:

• Improve tax transparency and compliance in the digital economy.
  
• Prevent tax evasion in online business.
  
• Reduce administrative burdens for small online sellers.

Conclusion

These new tax policies, taking effect from July 1, 2025, mark a significant step toward modernizing Vietnam’s tax system. They reflect the government’s effort to strengthen tax governance, ensure fairness, and promote sustainable business environments.

Individuals, households, and enterprises should actively update their understanding of these changes, review internal procedures, and adapt their accounting, finance, and payment systems to remain compliant and minimize legal risks.