VAT In 2025: Key Changes Businesses Need To Know

In 2025, Vietnam’s value-added tax (VAT) policy will undergo significant adjustments aimed at supporting businesses and promoting economic growth. Timely understanding of these changes will help businesses operate efficiently and comply with legal regulations.

Key Changes In VAT Policy In 2025

Continued 2% VAT rate reduction for the first six months of 2025

• Effective Period: From January 1, 2025, to June 30, 2025, the VAT rate will be reduced from 10% to 8% for groups of goods and services currently subject to the 10% tax rate.
• Exceptions: Certain groups of goods and services are not eligible for the tax reduction, including:

  Telecommunications

  Financial, banking, securities, and insurance activities

  Real estate business

  Metals and prefabricated metal products

  Exploited mineral products (excluding coal mining)

  Coke, refined petroleum, and chemical products

  Goods and services subject to special consumption tax

Implementation of the new VAT law from July 1, 2025

• Effectiveness: The VAT Law No. 48/2024/QH15 will take effect from July 1, 2025, replacing the 2008 VAT Law.
• Key New Points:

Taxpayers: Supplementing regulations on taxpayers for e-commerce activities and businesses operating on digital platforms.

VAT-Exempt Items: Adjusting and supplementing certain VAT-exempt items, such as imported goods used for disaster relief, support, and sponsorship for natural disaster and epidemic prevention and control.

Tax Rates: Clearly defining the 0%, 5%, and 10% tax rates for each type of goods and service.

Deduction and Refund: Adding regulations on the conditions for input VAT deduction and cases eligible for tax refunds, ensuring transparency and convenience for businesses.

What Businesses Need To Do To Adapt?

• Update Legal Knowledge: Regularly monitor and grasp the latest legal documents related to VAT to ensure compliance with regulations.
• Adjust Accounting Systems: Ensure that accounting software and accounting procedures are appropriate for changes in tax rates and tax policies.
• Train Personnel: Organize training sessions for the finance and accounting department on the changes in VAT policy.
• Review Contracts and Selling Prices: Re-examine business contracts and adjust selling prices (if necessary) to accurately reflect changes in tax rates, ensuring benefits for both businesses and customers.

Conclusion

The changes in VAT policy in 2025 present both challenges and opportunities for businesses. Proactively updating information and making timely adjustments will help businesses operate efficiently, comply with the law, and take advantage of tax incentives.

In case you have any questions about the policy that require support, please contact TPM via our website or you can contact TPM directly via hotline (+84) 28 3505 1800 for the fastest support.