What are the VAT rates in Vietnam under the Law on Value-Added Tax 2024?

What are the VAT rates in Vietnam under the Law on Value-Added Tax 2024?

Based on Article 9 of the Law on Value-Added Tax 2024...Download (document effective from July 1, 2025), the specific VAT rates are regulated as follows:

(1) The 0% tax rate applies to the following goods and services:

- Exported goods including: goods sold from Vietnam to organizations or individuals abroad and consumed outside Vietnam; goods sold from domestic Vietnam to organizations in tax-free zones and consumed in tax-free zones serving directly for export production activities; goods sold in the isolation area to individuals (foreigners or Vietnamese) who have completed exit procedures; goods sold at duty-free shops;

- Exported services including: services provided directly to organizations or individuals abroad and consumed outside Vietnam; services provided directly to organizations in tax-free zones and consumed in tax-free zones serving directly for export production activities;

- Other exported goods and services include: international transport; vehicle rental services used outside the territory of Vietnam; services by the airline, maritime industries supplied directly or through agents for international transport; construction or installation activities of works abroad or in tax-free zones; digital content products supplied to foreign parties and documented to be consumed outside Vietnam according to the regulations of the Government of Vietnam; spare parts, supplies for replacing to repair and maintain vehicles, machinery, equipment for foreign parties and consumed outside Vietnam; processed goods forwarded for export according to legal regulations; goods and services not subject to VAT when exported, except for cases not applying the 0% tax rate as provided in subsection d of this clause;

- Cases not applying the 0% tax rate include: technology transfer, intellectual property transfer abroad; reinsurance services abroad; credit provision services; capital transfer; derivative products; postal, telecommunication services; exported products specified in clause 23 of Article 5 of this Law; imported tobacco, alcohol, beer then exported; gasoline, oil purchased domestically and sold to businesses in tax-free zones; vehicles sold to organizations or individuals in tax-free zones.

(2) The 5% tax rate applies to the following goods and services:

- Clean water serving production and living excluding bottled, jarred drinking water and other beverages;

- Fertilizers, ores for fertilizer production, plant protection products, and livestock growth stimulants as regulated by law;

- Services like earthworks, channel, canal, pond dredging serving agriculture production; planting, caring, pest control for crops; initial processing, preserving agricultural products;

- Products from crops, planted forests (excluding timber, bamboo shoots), livestock, aquaculture, fisheries not yet processed into other products or only initially processed, excluding products specified in clause 1 of Article 5 of this Law;

- Rubber latex in sheet, block, chip form; nets, twine and string for weaving fishing nets;

- Products made of jute, sedge, bamboo, rattan, leaves, straw, coconut husk, coconut shell, water hyacinth, and other handicrafts made from agricultural by-products; cotton fiber coarsely or finely carded; newspaper print paper;

- Fishing boats operating in sea zones; specialized machinery and equipment for agricultural production as regulated by the Government of Vietnam;

- Medical equipment as regulated by the law on medical equipment management; illness prevention and treatment medicines; medicinal substances, herbal medicines as raw materials for illness treatment medication, prevention medication production;

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

- Traditional, folk-performing arts activities;

- Children's toys; books of all kinds, except for books specified in clause 15, Article 5 of this Law;

- Science and technology services as regulated by the Law on Science and Technology;

- Sale, rent, lease-purchase of social housing as regulated by the Law on Housing.

(3) The 10% tax rate

The 10% tax rate applies to goods and services not specified in clause (1) and clause (2) of Article 9 of the Law on Value-Added Tax 2024, including services provided by foreign suppliers without permanent establishments in Vietnam to organizations and individuals in Vietnam via e-commerce and digital platforms.

(4) Businesses dealing in multiple types of goods and services with different VAT rates (including those not subject to VAT) must declare VAT according to each stipulated rate for each type of goods or service; if the business does not determine by individual rate, it must calculate and pay tax at the highest rate of goods and services they produce, trade.

(5) Products from crops, planted forests, livestock, aquaculture, fisheries not yet processed into other products or only initially processed, used as animal feed, pharmaceuticals are subject to VAT according to the tax rate stipulated for products from crops, planted forests, livestock, aquaculture.

Waste products, by-products, scrap recovered for recycling, reuse when sold are subject to the tax rate according to the rate of the waste products, by-products, scrap sold.

The Government of Vietnam details the implementation of clauses (1) and (2), Article 9 of the Law on Value-Added Tax 2024. The Minister of Finance stipulates the dossier and procedures for applying the 0% VAT rate as in clause (1), Article 9 of the Law on Value-Added Tax 2024.

What are the VAT rates in Vietnam under the Law on Value-Added Tax 2024? (Image from the Internet)

Vietnam: How many VAT calculation methods are provided by the Law on Value-Added Tax 2024?

Pursuant to Article 10 of the Law on Value-Added Tax 2024...Download, there are 02 VAT calculation methods specified as follows:

- Tax credit method

- Direct tax calculation method

What are regulations on tax credit method in Vietnam?

According to Article 11 of the Law on Value-Added Tax 2024...Download, the tax credit method is regulated as follows:

- The payable VAT according to the tax credit method is the output VAT minus the deductible input VAT;

- The output VAT is the total VAT of the goods, services sold as recorded on the value-added invoice.

- The VAT of goods, services sold recorded on the value-added invoice is the tax calculation price of goods, services subject to tax sold multiplied by the VAT rate of those goods, services.

- In cases where invoices record the payment price as already inclusive of VAT, the output VAT is determined by subtracting the tax calculation price from the payment price calculated as per point k, clause 1, Article 7 of the Law on Value-Added Tax 2024;

- The deductible input VAT is the total VAT recorded on the value-added invoices for purchased goods, services, or tax payment documents for imported goods or service purchase as outlined in clauses (3) and (4), Article 4 of the Law on Value-Added Tax 2024 and fulfilling conditions set in Article 14 of the Law on Value-Added Tax 2024.