Tax Policy: Summary Of Important Changes Effective From July 1, 2025

1. Changes To Objects Not Subject To Vat

Effective from July 1, 2025, according to Article 5 of the Law on Value Added Tax 2024, significant adjustments will be made to the regulations on objects not subject to VAT:

• Removal of certain objects not subject to VAT: Items such as fertilizers, specialized machinery and equipment for agricultural production, offshore fishing vessels, securities depository, and other securities business activities will no longer be exempt from VAT as previously regulated.
• Exported products that are exploited natural resources and minerals processed into other products not subject to VAT must comply with the list stipulated by the Government.
• Addition of objects not subject to VAT: Imported goods for support and aid in disaster prevention, epidemics, and war as regulated by the Government will be exempt from VAT.

2. Adjustment Of Vat Rates For Certain Goods And Services

Clause 2, Article 9 of the Law on Value Added Tax 2024 will adjust the VAT rates for many products and services:

• From non-taxable to 5% taxable: Fertilizers and fishing vessels operating in sea areas.
• From 5% to 10%:
  • Unprocessed forest products.
  • Sugar and by-products from sugar production (molasses, bagasse, mud cake).
  • Various types of specialized equipment and tools for teaching, research, and scientific experiments.
  • Cultural activities, exhibitions, physical training, sports; artistic performances; film production; film import, distribution, and screening.

3. Addition Of Vat Refund Cases

Article 15 of the Law on Value Added Tax 2024 brings good news for businesses:

• New conditions for VAT refunds: Businesses that only produce and supply goods or services subject to 5% tax will be eligible for a refund if, after 12 months (or 4 quarters), their uncredited input VAT is VND 300 million or more.

4. Addition Of Subjects Applying 0% Tax Rate

Clause 1, Article 9 of the Law on Value Added Tax 2024 further specifies the subjects eligible for the 0% tax rate:

• International transport.
• Construction and installation works abroad, within non-tariff zones.
• Goods sold in isolation areas to individuals (foreigners or Vietnamese) who have completed exit procedures; goods sold at duty-free shops.
• Exported services including: Rental services for transport vehicles used outside the territory of Vietnam; Aviation and maritime services provided directly for international transport or through agents.

5. New Regulations On Promotional Goods

Article 7 of the Law on Value Added Tax 2024 adds an important regulation:

• The taxable price for goods and services used for promotion, as regulated by commercial law, will be determined as 0.

6. Changes To Conditions For Input Vat Credit

Clause 2, Article 14 of the Law on Value Added Tax 2024 introduces new conditions:

• All purchased goods and services must have non-cash payment documents, except for certain special cases as stipulated by the Government.
• Additionally, documents such as packing slips, bills of lading, and insurance documents (if any) are also added as a basis for input tax credit for exported goods.

7. Changing Tax Identification Numbers To Personal Identification Numbers

According to Clause 2, Article 38 of Circular 86/2024/TT-BTC:

• From July 1, 2025, taxpayers, tax authorities, and other relevant agencies, organizations, and individuals using tax identification numbers as stipulated in Article 35 of the Law on Tax Administration will use personal identification numbers instead of tax identification numbers.

8. Businesses Must Register For Electronic Identification Accounts

Clause 4, Article 40 of Decree 69/2024/ND-CP stipulates:

• From July 1, 2025, accounts on the National Public Service Portal and administrative procedure systems at all levels will expire. Businesses and organizations will only be allowed to use organizational electronic identification accounts issued by the Ministry of Public Security to carry out electronic administrative procedures.

9. Amendments To Taxable Price For Imported Goods

Article 7 of the Law on Value Added Tax 2024 stipulates:

• The VAT taxable price for imported goods will include: import taxable price + import duty (including surcharges if any) + special consumption tax (if any) + environmental protection tax (if any).

10. General Vat Rate Changes

• Decree 180/2024/ND-CP will expire on June 30, 2025. Therefore, goods and services currently subject to a reduced 10% tax rate will revert to the 10% tax rate as stipulated in the Law on Value Added Tax 2024.
• If, after June 30, 2025, a competent authority issues a document regulating a VAT reduction, it is expected that the VAT reduction policy will continue to apply from July 1, 2025.

What is the Latest Law on Tax Administration Currently?

Currently, the Law on Tax Administration 2019 is the latest tax administration law. However, from January 1, 2025, the Law Amending and Supplementing a Number of Laws (including contents amending and supplementing the Law on Tax Administration 2019) passed by the National Assembly at its 8th session will take effect.

What Acts Are Strictly Prohibited in Tax Administration?

Article 6 of the Law on Tax Administration 2019 clearly specifies the acts strictly prohibited in tax administration, including:

• Collusion, connivance, and cover-up between taxpayers and tax administration officials, tax authorities to transfer prices, evade taxes.
• Causing harassment and annoyance to taxpayers.
• Taking advantage to appropriate or illegally use tax money.
• Intentionally failing to declare or declaring taxes insufficiently, untimely, or inaccurately regarding the payable tax amount.
• Obstructing tax administration officials from performing their duties.
• Using the tax identification number of another taxpayer to commit illegal acts or allowing others to use one’s tax identification number contrary to legal regulations.
• Selling goods, providing services without issuing invoices as stipulated by law, using illegal invoices, and illegally using invoices.
• Falsifying, misusing, unauthorizedly accessing, or destroying taxpayer information systems.