What are cases where imports are not subject to value-added tax in Vietnam?

What are cases where imports are not subject to value-added tax in Vietnam?

Pursuant to Clause 26, Article 5 of the Law on Value-Added Tax 2024, specific provisions regarding entities not subject to tax are as follows:

Imports in the following cases are not subject to value-added tax:

- Gifts to government agencies, political organizations, socio-political organizations, socio-political-professional organizations, social organizations, socio-professional organizations, and people's armed forces within the import tax-free quotas as prescribed by the law on export tax and import tax;

- Gifts, presents within the import tax-free quotas as prescribed by the law on export tax and import tax from foreign organizations and individuals to Vietnamese individuals; items of foreign organizations and individuals that qualify for diplomatic immunity and movable properties within the import tax-free quotas as prescribed by the law on export tax and import tax;

- Goods within the luggage allowances for import tax exemption as prescribed by the law on export tax and import tax;

- Goods imported as aid or donations for the prevention, control, and recovery from disaster, epidemic, or war consequences as per the regulations of the Government of Vietnam;

- Goods traded and exchanged across borders for the production and consumption needs of border residents, belonging to the List of goods traded and exchanged by border residents as per the law and within the import tax-free quotas as prescribed by the law on export tax and import tax;

- National treasures, relics, antiquities as prescribed by the law on cultural heritage imported by competent state agencies.

What are cases where imports are not subject to value-added tax in Vietnam? (image from the Internet)

When does the Law on Value-Added Tax 2024 come into effect in Vietnam?

According to Article 18 of the Law on Value-Added Tax 2024, the specific provisions on its effective date are as follows:

Effective Date

1. This Law takes effect from July 1, 2025, except for the cases prescribed in Clause 2 of this Article.

2. Regulations on revenue levels of households and individual producers and businesses not subject to tax specified in Clause 25 of Article 5 of this Law and Article 17 of this Law take effect from January 1, 2026.

3. The Law on Value-Added Tax No. 13/2008/QH12, amended and supplemented by Law No. 31/2013/QH13, Law No. 71/2014/QH13, and Law No. 106/2016/QH13 ceases to be effective from the date this Law comes into effect.

Thus, based on the above provisions, the Law on Value-Added Tax 2024 is effective from July 1, 2025.

Vietnam: How is the taxable value calculated from July 1, 2025?

According to Article 7 of the Law on Value-Added Tax 2024, specific provisions regarding the calculation of value-added tax are as follows:

[1] The taxable value is regulated as follows:

- For goods and services sold by businesses, it is the selling price exclusive of value-added tax; for goods and services subject to special consumption tax, it is the selling price inclusive of special consumption tax but not including value-added tax; for goods subject to environmental protection tax, it is the selling price inclusive of environmental protection tax but not including value-added tax; for goods subject to both special consumption tax and environmental protection tax, it is the selling price inclusive of both but not including value-added tax;

- For imports, it is the taxable value as prescribed by the law on export tax and import tax plus import tax including any supplementary import taxes (if applicable), plus special consumption tax (if applicable) and environmental protection tax (if applicable);

- For goods and services used for exchange, internal use, gifting, or donation, it is the taxable value of similar or equivalent goods and services at the time of these activities. For goods and services used for promotion as prescribed by the law on trade, the taxable value is determined as zero (0);

- For asset leasing activities, it is the rental amount exclusive of value-added tax. If the lease is paid in periodic terms or prepaid for the lease term, the taxable value is the rental amount for each period or prepaid term exclusive of value-added tax;

- For goods sold on a deferred payment or installment basis, it is the one-time selling price exclusive of value-added tax, not including interest on installments or deferred payment;

- For processing goods, it is the processing cost exclusive of value-added tax;

- For construction and installation activities, it is the value of the project, construction item, or part of the work handed over exclusive of value-added tax. If construction and installation do not include materials, machinery, and equipment, the taxable value is the construction and installation value excluding the value of materials, machinery, and equipment;

- For real estate business activities, it is the real estate selling price exclusive of value-added tax minus the land levy or land rent paid to the state budget (deductible land value). The Government of Vietnam prescribes the determination of deductible land value complying with land laws;

- For agency and brokerage activities earning commission from the sale of goods and services, it is the commission income from these activities exclusive of value-added tax;

- For goods and services using invoices that record the payment price inclusive of value-added tax, the taxable value is determined according to the following formula:

- For casino, electronic gaming with rewards, and betting services, it is the amount collected from these activities minus the amount refunded to customers not fully used and rewards paid to customers (if applicable), inclusive of special consumption tax, exclusive of value-added tax;

- For production and business activities including: electricity production by Vietnam Electricity Corporation; transportation, loading and unloading; tourism services in the form of travel; pawn services; value-added tax-liable book sales at the cover price; printing activities; agency services for inspection, claim assessment, third-party claim settlement, handling of indemnity goods receiving 100% service fees or commissions, the taxable value is the selling price exclusive of value-added tax. The Government of Vietnam prescribes the taxable value for the production and business activities specified at this point.

[2] The taxable value for goods and services specified in Clause 1, Article 7 of the Law on Value-Added Tax 2024 includes any surcharges and additional fees that businesses are entitled to receive.