Vietnam: What 04 types of goods and services does a 10% VAT rate apply from July 1, 2025?

From July 1, 2025, what are regulations on goods and services subject to the 5% VAT rate in Vietnam?

Based on Clause 2, Article 9 of the Value Added Tax Law 2024 (effective from July 1, 2025), goods and services subject to a 5% VAT rate are regulated as follows:

- Clean water used for production and daily living, excluding bottled, canned drinks, and other types of beverages;

- Fertilizers, ores for fertilizer production, pesticides, and animal growth stimulants as prescribed by law;

- Services including channel dredging, excavation, ponds serving agricultural production; care and disease prevention for plants; preliminary processing, preservation of agricultural products;

- Products from crops, planted forests (excluding timber, bamboo shoots), livestock, aquaculture, fishing not yet processed into other products or only through ordinary preliminary processing, except for products specified in Clause 1, Article 5 of the Value Added Tax Law 2024;

- Rubber latex in the form of crude latex, sheet latex, chunk latex, crumb latex; nets, fishing ropes, and strings;

- Products made from jute, rush, bamboo, rattan, leaves, straw, coir, coconut shell, water hyacinth, and other handicraft products produced from agricultural by-products; carded cotton fiber; newsprint;

- Vessels for fishing in marine areas; machinery and specialized equipment serving agricultural production according to regulations of the Government of Vietnam;

- Medical equipment as prescribed by law on medical equipment management; preventive and curative drugs; pharmaceutical substances and materials for producing preventive and curative drugs;

- Equipment for teaching and learning, including models, paintings, boards, chalk, rulers, compasses;

- Traditional and folk performing arts activities;

- Children's toys; books of various kinds, except those specified in Clause 15, Article 5 of the Value Added Tax Law 2024;

- Scientific and technological services as prescribed by the Law on Science and Technology;

- Sale, lease, hire purchase of social housing as prescribed by the Housing Law 2023.

Vietnam: What 04 types of goods and services does a 10% VAT rate apply from July 1, 2025?

Pursuant to Clause 2, Article 9 of the Value Added Tax Law 2024 (effective from July 1, 2025) regulating goods and services subject to a 5% VAT rate.

Simultaneously, based on Clause 3, Article 9 of the Value Added Tax Law 2024 (effective from July 1, 2025) regulating goods and services subject to a 10% VAT rate as follows:

VAT Rate

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3. The 10% VAT rate applies to goods and services not specified in Clauses 1 and 2 of this Article, including services provided by foreign suppliers without a permanent establishment in Vietnam to organizations and individuals in Vietnam through e-commerce channels and digital platforms.

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From there, according to the regulations in Clauses 2 and 3, Article 8 of the Value Added Tax Law 2008, amended by Clause 3, Article 1 of the Amendment Law on VAT 2013 and further amended by Clauses 2 and 3, Article 3 of the Amendment Law on Taxes 2014, it regulates goods and services currently subject to 5% and 10% VAT rates.

Thus, once the Value Added Tax Law 2024 takes effect on July 1, 2025, four types of goods and services will experience an increase in VAT rate from 5% to 10%, including:

- Unprocessed forest products;

- Sugar; by-products from sugar production, including molasses, bagasse, filter mud;

- Specialized equipment, tools for teaching, research, and scientific experiments;

- Cultural, exhibition, sports, and physical activities; performing arts; film production; importation, distribution, and screening of films.

Which entities are value-added taxpayers in Vietnam?

According to Article 3 of Circular 219/2013/TT-BTC, taxpayers of value-added tax are organizations and individuals producing and trading in goods and services subject to value-added tax in Vietnam, without discrimination of industry, form, or type of business organization (hereinafter referred to as business establishments) and organizations, individuals importing goods, and purchasing services from abroad subject to value-added tax (hereinafter referred to as importers) including:

- Business organizations established and registered under the Enterprise Law 2020, Cooperative Law 2023, and other specialized business laws;

- Economic organizations under political organizations, socio-political organizations, social organizations, socio-professional organizations, people's armed units, service organizations, and other entities;

- Enterprises with foreign investment capital and foreign parties participating in business cooperation under the Investment Law; organizations, individuals, foreigners conducting business in Vietnam without establishing a legal entity in Vietnam;

- Individuals, households, groups of independent business people, and other entities engaged in production, business, and import;

- Organizations, individuals conducting business in Vietnam purchasing services (including cases of purchasing services associated with goods) of foreign organizations without a permanent establishment in Vietnam, individuals abroad being non-resident subjects in Vietnam, the organization, individual purchasing the service is the taxpayer, except for cases not required to declare, calculate, and pay value-added tax guided in Clause 2, Article 5 of Circular 219/2013/TT-BTC.

Regulations on permanent establishments and non-resident subjects are implemented under the law on corporate income tax and personal income tax.

- Branches of export-processing enterprises established for trading in goods and activities directly related to trading in goods in Vietnam as prescribed by the law on industrial zones, export processing zones, and economic zones.