Hot News 2025: VAT Exemption for Imported Goods Under 1 Million VND Ends

Do you frequently purchase cheap international goods from e-commerce platforms like Shopee, TikTok, or Amazon? If so, pay close attention to this crucial information: from January 14, 2025, the Value Added Tax (VAT) exemption for imported goods valued under 1 million VND will be officially abolished.

This information is clearly stipulated in Resolution 174/2024/QH15, officially terminating the previously effective Decision 78/2010/QD-TTg. So, what exactly are these new regulations? Who will be affected and how? Let [Your Website Name] explore the details right away!

Overview of New VAT Regulations for Imported Goods from January 14, 2025

Previously, according to Decision 78/2010/QD-TTg, imported goods sent via express delivery services with a value under 1 million VND enjoyed the preferential treatment of being exempt from both import duty and VAT. This was one of the factors contributing to the attractiveness of cheap imported goods, especially from international e-commerce platforms.

However, Resolution 174/2024/QH15 has officially ended this preferential treatment. From January 14, 2025, all goods imported into Vietnam, regardless of value, will be subject to VAT according to regulations. Thus, even if you purchase an item worth just a few tens of thousands of VND from abroad, you will still have to pay VAT when the goods arrive in Vietnam.

This change directly impacts transactions involving goods from cross-border e-commerce platforms such as Shopee, TikTok Shop, Amazon, AliExpress… when goods are transported to Vietnam through express delivery services.

Who will be subject to VAT under the new regulations?

To better understand VAT payment, we need to consider Article 4 of the 2024 VAT Law. Accordingly, the subjects liable to pay VAT include:

• Organizations and individuals producing and trading goods and services subject to VAT: This is the most common group, including businesses and household businesses producing and supplying goods and services domestically.
• Organizations and individuals importing goods subject to VAT: This is the group directly affected by the new regulations. Any organization or individual importing goods into Vietnam that are subject to VAT must pay the tax.
• Organizations and individuals in Vietnam purchasing services from foreign organizations without permanent establishments in Vietnam: For example, Vietnamese businesses using online advertising services or software services from foreign suppliers without representative offices in Vietnam.
• Foreign suppliers engaged in e-commerce and digital platform business with organizations and individuals in Vietnam: International e-commerce platforms such as Google, Facebook, Netflix… providing services to Vietnamese users are also subject to VAT.
• Organizations managing e-commerce exchanges and digital platforms with payment functions performing deduction and tax payment on behalf: E-commerce platforms are responsible for deducting and paying VAT on behalf of household businesses and individuals trading on the platform if the platform has payment functionality.

How will the new regulations affect consumers’ wallets?

Certainly, ending the VAT exemption for low-value imported goods will have certain impacts on consumers, especially those who frequently shop online for international goods.

• Prices of imported goods may increase: Due to being subject to additional VAT, the final selling price of imported goods, especially cheap items, may be slightly higher than before. Consumers will have to pay an additional tax amount on top of the product price.
• Consider more carefully before buying international goods: Consumers will need to factor in the VAT cost when deciding to purchase goods from abroad. Comparing prices between imported goods and domestically produced goods will become more important.

However, these regulations are also considered a necessary step to strengthen tax management of cross-border e-commerce activities that are increasingly developing strongly. Simultaneously, it also contributes to ensuring tax fairness between imported goods and domestically produced goods, creating a healthier competitive environment for Vietnamese businesses.

Comprehensive Impact Assessment of the New Regulations

Applying VAT to low-value imported goods is a significant change in tax policy, and it is expected to have broad impacts:

• For Consumers:
  
  • Negative impact: The cost of purchasing international goods may increase, reducing the attractiveness of cheap imported goods.
  • Positive impact: May promote the trend of consuming domestically produced goods, supporting Vietnamese businesses.
• For E-commerce Businesses:
  
  • Challenges: Need to adjust pricing strategies, shipping policies, and tax information to adapt to the new regulations.
  • Opportunities: Enhance the competitiveness of domestically produced goods, potentially boosting domestic sales.
• For the Domestic Market:
  
  • Opportunities: Domestically produced goods have a greater price advantage, promoting domestic production and consumption.
  • Challenges: Domestic businesses need to improve quality and diversify designs to meet the increasingly high demands of consumers.

The regulation to end VAT exemption for imported goods under 1 million VND from January 14, 2025, is an important step, demonstrating the state’s efforts to improve tax policy, increase budget revenue, and more closely manage e-commerce activities. Consumers and businesses need to proactively update information and adjust their purchasing and business plans to adapt to these changes.

If you have any questions related to tax policy and need support, do not hesitate to contact TPM Tax Agency via the website or call the hotline directly at (+84) 28 3505 1800 for the fastest and most professional advice.