Shall VAT apply to import goods under VND 1,000,000 sent via express delivery to Vietnam from January 14, 2025?

Shall VAT apply to import goods under VND 1,000,000 sent via express delivery to Vietnam from January 14, 2025?

Based on Section 8 of Resolution 174/2024/QH15 (document effective from January 14, 2025), the regulations are as follows:

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8. Continue to reduce the VAT rate by 2% for the groups of goods and services specified at point a subsection 1.1 clause 1 Article 3 of the Resolution No. 43/2022/QH15 of the National Assembly on fiscal and monetary policies supporting the Economic-Social Recovery and Development Program for the period from January 1, 2025 to June 30, 2025. Assign the Government of Vietnam to organize the implementation, ensure the duties of collection and balance of the state budget for 2025 as decided by the National Assembly; immediately terminate the validity of the VAT exemption regulation in Decision No. 78/2010/QD-TTg of the Prime Minister of the Government of Vietnam, providing a legal foundation and management sanction for tax authorities to apply to foreign e-commerce platforms selling goods into Vietnam.

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Simultaneously, referring to the provisions of Article 1 of Decision 78/2010/QD-TTg of 2010 by the Prime Minister of the Government of Vietnam guiding the value of imported goods sent through express service to be exempted from VAT, imported goods under one million VND sent via express delivery are exempted from import VAT and input VAT (import stage).

Thus, as soon as Resolution 174/2024/QH15 takes effect from January 14, 2025, it also implies the termination of the validity of Decision 78/2010/QD-TTg of 2010. Therefore, the collection of VAT on imported goods under one million VND sent via express delivery will be officially implemented from January 14, 2025.

Shall VAT apply to import goods under VND 1,000,000 sent via express delivery to Vietnam from January 14, 2025? (Image from the Internet)

When are imported goods subject to VAT in Vietnam?

Based on Article 2 of Circular 219/2013/TT-BTC which prescribes the subjects liable to VAT as follows:

Taxable Objects

Objects subject to VAT are goods and services used for production, business, and consumption in Vietnam (including goods and services purchased from foreign organizations and individuals), excluding the objects not subject to VAT as guided in Article 4 of this Circular.

Simultaneously, in accordance with the provisions of Article 4 of Circular 219/2013/TT-BTC, as amended and supplemented by clause 1, clause 2, clause 3 Article 1 of Circular 26/2015/TT-BTC, and further amended by point a, point b clause 1 Article 1 of Circular 130/2016/TT-BTC, Article 1 of Circular 25/2018/TT-BTC prescribing the objects not subject to VAT.

Thus, imported goods subject to VAT are goods used for production, business, and consumption in Vietnam (including goods and services purchased from foreign organizations and individuals), except for the objects not subject to VAT in Article 4 of Circular 219/2013/TT-BTC, specifically as follows:

- Breeding products, plant varieties belonging to the object not subject to VAT imported by trading and importing facilities with business registration certificates for breeding animals, plant varieties granted by state management authorities.

- Newspapers, magazines, specialized newsletters, political books, textbooks, educational materials, legal documents, scientific-technical books, books printed in ethnic minority scripts, and propaganda paintings, photos, posters including those in the form of audio or video tapes, disks, and electronic data; currency, printing currency.

- Imported goods are types not manufactured domestically:

+ Machinery, equipment, spare parts, materials imported for direct use in scientific research, technology development activities;

+ Machinery, equipment, replacement parts, specialized transportation means, and materials that need to be imported for conducting oil and gas exploration, drilling activities;

+ Aircraft (including aircraft engines), drilling rigs, ships of types not yet manufactured domestically imported for forming fixed assets of enterprises or leased from abroad for production, business, leasing, or sub-leasing.

- Imported specialized weapons and military equipment (including materials, machinery, equipment, and spare parts) serving national defense and security subjects entitled to import tax exemption under the export tax, import tax or import under annual quotas approved by the Prime Minister of the Government of Vietnam.

- Goods for humanitarian aid and non-repayable aid must be certified by the Ministry of Finance or Department of Finance.

- Imported goods as gifts for state agencies, political organizations, socioeconomic-political organizations, socio-political-professional organizations, social organizations, socio-professional organizations, and armed forces units as prescribed by law on gifts, presents.

- Imported goods as presents for individuals in Vietnam as prescribed by law on gifts, presents.

- Imported goods are personal belongings of foreign organizations and individuals according to diplomatic exemption standards as prescribed by law on diplomatic privileges and immunities.

- Imported goods are personal belongings of overseas Vietnamese returning to the country.

- Imported goods are goods brought with people within the duty-free luggage allowance;

- Imported goods are goods sold to foreign organizations and individuals, international organizations for humanitarian aid, non-repayable aid to Vietnam.

- Temporarily imported goods for re-export; temporarily exported goods for re-import; imported raw materials and materials for producing, processing export goods according to production, processing export contracts signed with overseas parties.

- Raw materials and materials imported for producing, processing export goods according to production, processing export contracts signed with overseas parties.

- Imported gold in bars or raw form that has not been processed into fine art products, jewelry, or other products.

When is the time to determine VAT on imported goods in Vietnam?

Based on clause 6 Article 8 of Circular 219/2013/TT-BTC which prescribes the time to determine VAT on imported goods is from the time of customs declaration registration.