Has the Law on Amendments to the Law on Value Added Tax 2024 been officially approved in Vietnam? What are amendments to the Law on Value Added Tax of Vietnam?

Has the Law on Amendments to the Law on Value Added Tax 2024 been officially approved in Vietnam?

According to Article 1 of Resolution 41/2023/UBTVQH15 of the Standing Committee of the National Assembly on adjusting the legislative program for 2024, the Law on Amendments to the Law on Value Added Tax was presented to the National Assembly for comments in the 7th session (May 2024) and was approved in the 8th session (October 2024).

Additionally, on November 26, 2024, the National Assembly held a vote and 407 out of 451 deputies voted in favor of passing the Law on Amendments to the Law on Value Added Tax (accounting for 84.97% of the total deputies).

Thus, the Law on Amendments to the Law on Value Added Tax 2024 has been officially approved and will take effect from July 1, 2025.

Has the Law on Amendments to the Law on Value Added Tax 2024 been officially approved in Vietnam? What are amendments to the Law on Value Added Tax of Vietnam? (Image from the Internet)

What are the new points of the Amended Law on Value Added Tax?

The Amended Law on Value Added Tax has just been passed, so there is currently no official legal text. Therefore, the latest Draft (Draft 5) of the Amended Law on Value Added Tax can be referred to for more information about the changes in value added tax.

Download Draft 5 of the Amended Law on Value Added Tax 2024

Some new points of the Amended Law on Value Added Tax are as follows:

(1) Applying a 5% VAT rate to fertilizers

According to Clause 2, Article 9 of the Draft of the Amended Law on Value Added Tax (Draft 5), a 5% VAT rate is applied to certain goods and services such as:

- Clean water used for production and household purposes excluding bottled, canned drinking water, and other beverages.

- Fertilizers; ores for producing fertilizers; pesticides including plant protection drugs and growth stimulants for livestock and crops.

- Services of digging, dredging canals, ditches, ponds, lakes for agricultural production; planting, caring, pest prevention for crops; preliminary processing, preservation of agricultural products.

- Rubber latex in crumb, sheet, bun, foam form; binding cords and threads for knitting fishing nets.

- Products made from jute, sedge, bamboo, rattan, leaves, straw, coconut shells, coconut fibers, water hyacinth, and other handicraft products utilizing agricultural materials; rough, thoroughly combed cotton; newspaper printing paper....

Meanwhile, according to the current regulation (Clause 3a, Article 5 of the Law on Value Added Tax 2008, supplemented by Clause 1, Article 3 of the Law on Amendments and Supplements to Certain Articles of Tax Laws 2014), fertilizers are currently not subject to VAT.

(2) Applying a 0% VAT rate to exported goods, including:

- Goods from Vietnam sold to organizations, individuals abroad and consumed outside Vietnam;

- Goods from domestic Vietnam sold to organizations in non-tariff zones and consumed within non-tariff zones for direct export production activities;

- Goods sold in isolated areas to individuals (foreigners or Vietnamese) who have completed exit procedures;

- Goods sold at duty-free shops;

(3) Cases where the 0% VAT rate is not applied

Cases where the 0% rate is not applied include:

- Technology transfer, intellectual property right transfer abroad;

- Reinsurance services abroad;

- Credit services;

- Capital transfer;

- Derivative products;

- Postal, telecommunication services;

- Imported tobacco, alcohol, beer that are subsequently exported;

- Petrol, oil purchased domestically sold to businesses in non-tariff zones;

- Cars sold to organizations, individuals within non-tariff zones.

When will the Law on Amendments to the Law on Value Added Tax 2024 be announced in Vietnam?

Based on Clause 1, Article 80 of the Law on Promulgation of Legal Documents 2015 regarding the announcement of laws as follows:

Publication of laws, ordinances, resolutions

1. The President announces laws and ordinances no later than 15 days from the date they are passed.

For ordinances passed by the Standing Committee of the National Assembly which the President requests the Standing Committee of the National Assembly to reconsider according to Clause 1, Article 88 of the Constitution, no later than 10 days from the date the ordinance is passed, the President sends a document to the Standing Committee of the National Assembly requesting reconsideration. The Standing Committee of the National Assembly is responsible for reconsidering the matters the President has commented on at the nearest session. After the ordinance is re-voted and approved by the Standing Committee of the National Assembly, the President shall announce it no later than 15 days from the date the Standing Committee of the National Assembly re-approves it. In the case the President still does not agree, the President submits it to the National Assembly for decision at the nearest session.

For laws and ordinances built and issued by fast-track procedures, the President announces them no later than 5 days from the date they are passed.

...

According to the above regulations, the Law on Amendments to the Law on Value Added Tax 2024 will be announced by the President no later than 15 days from the date the Law on Amendments to the Law on Value Added Tax 2024 is passed.

This means the Law on Amendments to the Law on Value Added Tax 2024 will be announced no later than December 11, 2025.