From July 1, 2025, what are the conditions for VAT deduction on exported goods and services in Vietnam?

From July 1, 2025, what are the conditions for VAT deduction on exported goods and services in Vietnam?

Based on Clause 2, Article 14 of the Law on Value-Added Tax 2024, regarding the deduction of input value-added tax as follows:

Deduction of input value-added tax

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2. The conditions for deducting input value-added tax are prescribed as follows:

a) Possession of a value-added tax invoice for goods or services purchased, or documentation of paid value-added tax at the import stage or documentation of paid value-added tax on behalf of a foreign party as stipulated in Clauses 3 and 4, Article 4 of this Law. The Minister of Finance stipulates the documentation for paying value-added tax on behalf of a foreign entity;

b) Non-cash payment documentation for the purchase of goods and services, excluding some special cases as stipulated by the Government of Vietnam;

c) For exported goods and services, in addition to the conditions specified in points a and b of this clause, the following are required: a contract with a foreign party for the sale, processing of goods, or provision of services; a sales invoice for goods or services; non-cash payment documentation; a customs declaration for exported goods; a packing slip, bill of lading, and insurance documentation for goods (if any). The Government of Vietnam will prescribe the deduction conditions for cases of exported goods through overseas e-commerce platforms and other specific cases.

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Thus, from July 1, 2025, the conditions for the deduction of input VAT for exported goods and services are as follows:

- Possession of a VAT invoice for goods or services purchased or documentation of VAT payment on behalf of a foreign entity.

- Non-cash payment documentation for the purchase of goods and services, excluding some special cases as stipulated by the Government of Vietnam.

- A contract signed with a foreign party for the sale, processing of goods, or provision of services.

- A sales invoice for goods or services.

- Non-cash payment documentation.

- A customs declaration for exported goods.

- A packing slip, bill of lading, and insurance documentation for goods (if any).

Note: The deduction conditions for the case of exporting goods through overseas e-commerce platforms and other specific cases will be stipulated by the Government of Vietnam.

From July 1, 2025, what are the conditions for VAT deduction on exported goods and services in Vietnam? (Image sourced from the Internet)

From July 1, 2025, what are the regulations regarding VAT refunds for exported goods in Vietnam?

Based on Clause 1, Article 15 of the Law on Value-Added Tax 2024, the regulations on tax refunds for exports are as follows:

- Businesses that have exported goods and services in a month or quarter, if having uncredited input value-added tax of 300 million VND or more, are entitled to a VAT refund monthly or quarterly, except for goods imported then exported to other countries;

- Businesses that have both exported goods and services and domestic sales in a month or quarter must separately account for the input VAT used for manufacturing and trading exported goods and services. If separate accounting is not feasible, the input VAT for exported goods and services is determined by the ratio of the revenue from exported goods and services to the total taxable revenue for the refund period.

The refund period is determined from the tax period with uncredited input VAT continuously not refunded until the period when a refund is requested.

- The input VAT for exported goods and services (including separately accounted input VAT and the input VAT determined by the aforementioned ratio) if, after offsetting against the VAT payable for domestically consumed goods and services, the remainder is 300 million VND or more, businesses are entitled to a VAT refund for exported goods and services.

The VAT refund for exported goods and services must not exceed 10% of the revenue from exported goods and services for the refund period.

The input VAT identified for exported goods and services but not refunded due to exceeding 10% of the revenue from exported goods and services for the previous refund period is carried forward into the next tax period to compute the VAT refund for exported goods and services in the subsequent refund period.

Who determines the time for determining VAT on exported goods in Vietnam?

Pursuant to Article 8 of the Law on Value-Added Tax 2024, the determination of the time for value-added tax is described as follows:

Determination of the time for value-added tax

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2. The determination of the time for value-added tax on the following goods and services is regulated by the Government of Vietnam:

a) Exported goods, imported goods;

b) Telecommunication services;

c) Insurance business services;

d) Electric and clean water supply activities, electrical production activities;

dd) Real estate business activities;

e) Construction, installation, and petroleum activities.

Thus, the determination of the time for value-added tax on exported goods is regulated by the Government of Vietnam.