What is the latest Law on Value-Added Tax 2024 in Vietnam? When does the Law on Value-Added Tax 2024 come into force in 2025?

What is the latest Law on Value-Added Tax 2024 in Vietnam?

In 2025, the Law on Value-Added Tax 2024 will officially come into force from July 1, 2025. As of now, the Law on Value-Added Tax 2008 is still in effect and has been amended and supplemented by several other documents listed below:

- Law on Value-Added Tax, Excise Tax and Tax Management Amendment 2016.

- Law Amending Various Tax Laws 2014.

- Law on Value-Added Tax Amendment 2013.

What is the latest Law on Value-Added Tax 2024 in Vietnam? When does the Law on Value-Added Tax 2024 come into force in 2025? (Image from the Internet)

When does the Law on Value-Added Tax 2024 come into force in Vietnam in 2025?

Pursuant to Article 18 of the Law on Value-Added Tax 2024, it is stipulated that the Law on Value-Added Tax 2024 will come into force from July 1, 2025, except for the following provisions:

Regulations on revenue levels of households, individuals engaged in production or business activities subject to non-taxation, as specified in Clause 25, Article 5, and Article 17 of the Law on Value-Added Tax 2024 will come into force from January 1, 2026.

Simultaneously, the Law on Value-Added Tax 2008, which has been amended and supplemented by specific provisions under the Law on Value-Added Tax Amendment 2013 and Law Amending Various Tax Laws 2014, along with the Law on Value-Added Tax, Excise Tax and Tax Management Amendment 2016, will cease to have effect from the effective date of the Law on Value-Added Tax 2024.

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

under Article 15 of the Law on Value-Added Tax 2024, regulations on VAT refunds under the Law on Value-Added Tax 2024 effective from July 1, 2025, are as follows:

[1] VAT Refund for Exports is Regulated as Follows:

- Business establishments within a month or quarter that have exported goods or services, if the input VAT amount remaining uncredited is 300 million VND or more, are eligible for VAT refunds monthly or quarterly, except for goods imported and then exported to another country;

- Business establishments that have both exported and domestically consumed goods or services within a month or quarter must separately account for the input VAT used for the production and business of exported goods and services;

If separate accounting is not possible, the input VAT on exported goods and services is determined based on the ratio of revenue from exported goods and services to the total taxable revenue for the refund period. The refund period is determined from the period having an uncredited input VAT continuously through the following period, until requesting a tax refund.

The input VAT on exported goods and services (including input VAT separately accounted and input VAT determined by the above ratio) if the amount after offset exceeds 300 million VND, the business establishment will be eligible for a refund for exported goods and services.

The refundable input VAT for exported goods and services must not exceed 10% of the revenue from exported goods and services for the refund period. The input VAT identified for exported goods and services but not refunded due to exceeding 10% revenue from exported goods and services for the previous period may be credited to the next tax period to determine the VAT refund of exported goods and services in the subsequent refund period.

[2] VAT Refund for Investment is Regulated as Follows:

- Business establishments registered for VAT payment by the deduction method having investment projects (new investment projects, expanded investment projects) as stipulated by the Investment Law (including projects segmented into multiple phases or components, except for projects not forming fixed assets of enterprises) in the investment phase or oil and gas exploration, development projects in the investment phase with input VAT arising that hasn't been refunded, the establishment offsets the amount with VAT payable from current operational production and business activities (if any).

If the balance remains, the input VAT of the investment project is not fully credited at 300 million VND and above, a VAT refund is granted.

If the investment project is completed (including segmented investment projects, components being completed), but the establishment hasn't applied for a VAT refund arising during the investment phase (completed investment component or phase), the establishment submits a VAT refund application within 1 year from the completion date of the investment project or completion date of the investment phase, component.

The completion date of the investment project or investment phase, component is the date when revenue of the investment project, or revenue from the investment phase, component is realized.

Revenue stipulated in this clause does not include revenue from the trial operation phase, financial activities, liquidation of raw materials of the investment project;

- Business establishments are not refunded VAT but carry forward uncredited VAT of the investment project to the following period as stipulated by the Investment Law in cases:

+ The business's investment project lacks sufficient registered charter capital at the time of the refund application; ventures with conditional business sectors but insufficient compliance with business conditions as per the Investment Law or fails to maintain sufficient business conditions during operations, unless under the Investment Law and related specialized laws, the project during investment phase does not require the competent authority to issue a business license for conditional sectors, or under the Investment Law and related specialized laws, no business license for conditional sectors is required;

+ Investment projects exploiting resources, minerals (excluding projects exploring and developing oil and gas as specified in item a of this clause) and projects manufacturing products that include mined resources and minerals processed into other products as specified in Clause 23, Article 5 of this Law.

[3] Business entities exclusively producing goods, supplying services subject to a 5% VAT rate, if uncredited input VAT from 300 million VND and above remains after 12 months or 4 quarters continuously, a VAT refund is granted; cases of businesses producing goods, supplying services at multiple VAT rates, refunds are based on an allocation ratio determined by the Government of Vietnam.

[4] Business establishments paying VAT by the deduction method receive VAT refunds when dissolved, bankrupt with excess paid VAT, or uncredited input VAT.

For partnerships paying VAT by the deduction method transitioning into cooperatives, the cooperative inherits the excess paid VAT or uncredited input VAT of the partnership to credit, refund per regulations.

[5] Foreign individuals, overseas Vietnamese holding passports or travel documents with international validity receive refunds on goods bought in Vietnam carried upon exit.

The Government of Vietnam stipulates documents, procedures, refundable amounts, refund methods for cases specified in this clause.

[6] VAT refund for programs, projects utilizing non-refundable official development assistance (ODA) or grants, humanitarian aid is regulated as follows:

- Program or project owners, main contractors, organizations designated by foreign sponsors managing non-refundable ODA projects are refunded the VAT paid for goods, services purchased in Vietnam to serve projects;

- Organizations in Vietnam utilizing non-refundable aid, humanitarian aid funds from foreign organizations, individuals to purchase goods, services for the non-refundable aid, humanitarian aid programs in Vietnam are refunded the VAT paid for such goods, services.

[7] Entities enjoying diplomatic exemption privileges as per diplomatic laws buying goods, services in Vietnam for use, are refunded the VAT paid as recorded on VAT invoices or on payment documents indicating prices including VAT.

[8] Business establishments having VAT refund decisions from competent authorities per legal regulation and VAT refunds as per international treaties where the Socialist Republic of Vietnam is a member.

[9] Business entities subject to VAT refunds per this Article must meet the following conditions:

- Entities eligible for VAT refunds per the provisions of clauses 1, 2, 3, and 4, Article 15 Law on Value-Added Tax 2024 must pay VAT under the deduction method, maintain appropriate accounting books, vouchers as per accounting laws, and have bank accounts under their tax codes;

- Comply with regulations on input VAT deduction as stipulated in Clause 2, Article 14 Law on Value-Added Tax 2024 and not fall into cases stipulated in Clause 3, Article 14;

- Sellers must declare and pay VAT per regulations concerning invoices issued to entities applying for VAT refunds.

[10] Taxpayers eligible for VAT refunds, having input VAT amounts fully meeting refund conditions as stipulated in this Article and complying with tax declaration regulations per tax management laws, shall submit VAT refund dossiers for each refund case to the competent tax authority.

The tax authority classifies VAT refund dossiers into refund-before or inspect-before refund categories, and addresses VAT refund dossiers per tax management laws.