What are amendments to regulations on taxpayers in Vietnam under the Law on Value-Added Tax 2024?

Which entities are subject to value-added tax in Vietnam?

Pursuant to Article 3 of Circular 219/2013/TT-BTC which stipulates the entities subject to value-added tax as organizations and individuals producing and trading goods and services subject to value-added tax in Vietnam, regardless of industry, form, business organization (hereinafter referred to as business establishments), and organizations, individuals importing goods, purchasing services from abroad subject to value-added tax (hereinafter referred to as importers) include:

- Business organizations established and registered for business according to the Law on Enterprises 2020, Law on Cooperatives 2023, and other specialized business laws;

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

- Enterprises with foreign-invested capital and foreign parties participating in business cooperation according to the Law on Investment; foreign organizations, individuals conducting business activities in Vietnam but not establishing a legal entity in Vietnam;

- Individuals, households, groups of independent businesspersons, and other entities involved in production, business, and import activities;

- Organizations, individuals conducting business operations in Vietnam purchasing services (including cases where services are associated with goods) from foreign organizations without a permanent establishment in Vietnam, individuals abroad not residing in Vietnam, except where not required to declare or pay value-added tax as guided in Clause 2, Article 5 of Circular 219/2013/TT-BTC.

Regulations on permanent establishment and non-resident entities are implemented in accordance with the law on corporate income tax and personal income tax.

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

What are amendments to regulations on taxpayers in Vietnam under the Law on Value-Added Tax 2024?

According to Article 4 of the Law on Value-Added Tax 2024 (effective from July 1, 2025), the regulation on entities subject to value-added tax is as follows:

- Organizations, households, individuals producing, trading goods, and services subject to value-added tax (hereinafter referred to as business establishments).

- Organizations, individuals importing goods subject to value-added tax (hereinafter referred to as importers).

- Organizations, individuals conducting business in Vietnam purchasing services (including where services are associated with goods) from foreign organizations without a permanent establishment in Vietnam, individuals abroad being non-residents in Vietnam, except as regulated in Clauses 4 and 5 of this Article; organizations conducting business operations in Vietnam purchasing goods, services for exploration, development, and production of oil fields from foreign organizations without a permanent establishment in Vietnam, individuals abroad being non-residents in Vietnam.

- Foreign suppliers without a permanent establishment in Vietnam engaged in e-commerce business, business based on digital platforms with organizations, individuals in Vietnam (hereinafter referred to as foreign suppliers); organizations acting as digital platform managers executing tax withholding and payment obligations on behalf of foreign suppliers; business organizations in Vietnam applying the method of value-added tax deduction purchasing services from foreign suppliers without a permanent establishment in Vietnam through e-commerce channels or digital platforms executing tax withholding and payment obligations on behalf of foreign suppliers.

- Organizations that manage e-commerce platforms or digital platforms with payment functions execute tax withholding, pay on behalf, and declare withheld taxes for business households, business individuals on e-commerce platforms or digital platforms.

Thus, the most significant change in the regulation on who is subject to value-added tax in the Law on Value-Added Tax 2024 compared to the Law on Value-Added Tax 2008 and its guiding documents is the specific provision and addition of subjects related to the management and business of e-commerce platforms.

What are amendments to regulations on taxpayers in Vietnam under the Law on Value-Added Tax 2024? (Image from the Internet)

When is the time for determining value-added tax in Vietnam according to current regulations?

Pursuant to Article 8 of Circular 219/2013/TT-BTC, the time for determining value-added tax is regulated as follows:

- For the sale of goods, it is at the time of transferring ownership or use rights of goods to the purchaser, irrespective of whether payment has been received or not.

- For providing services, it is at the time of completing the provision of services or at the time of issuing the service provision invoice, irrespective of whether payment has been received or not.

- For telecommunications services, it is at the time of finalizing data on telecommunications service charges in accordance with economic contracts between telecommunications service business establishments, but no later than 2 months from the month the telecommunications service charge arises.

- For electricity and clean water supply activities, it is the date of recording consumption indices on the meter to be indicated on the billing invoice.

- For real estate business activities, infrastructure construction, construction of houses for sale, transfer, or lease, it is at the time of revenue collection according to the project implementation progress or payment schedule stated in the contract. Based on the collected amount, the business establishment declares output VAT arising in the period.

- For construction, installation, including shipbuilding, it is the time of acceptance, transfer of the completed construction, component project, or completed construction volume, irrespective of whether payment has been received or not.

- For imported goods, it is at the time of registering the customs declaration.