When does the Law on Value-Added Tax 2024 come into force? What are amendments to the tax calculation regulations for imports in Vietnam?

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

The Law on Value-Added Tax 2024 was officially passed by the National Assembly on the afternoon of November 26, 2024.

Simultaneously, the Law on Value-Added Tax 2024 will come into effect from July 1, 2025, except for the provisions regarding the revenue level of households and individuals engaged in production and business activities that are not subject to tax under Clause 25, Article 5, and Article 17 of the Law on Value-Added Tax 2024, which will come into effect from January 1, 2026.

Download the Law on Value-Added Tax 2024.

When does the Law on Value-Added Tax 2024 come into force? What are amendments to the tax calculation regulations for imports in Vietnam? (Image from the Internet)

What are amendments to the tax calculation regulations for imports in Vietnam?

Based on point b, Clause 1, Article 7 of the Law on Value-Added Tax 2024 (effective from July 1, 2025), the tax calculation for imports is stipulated as follows:

The tax calculation price for imports = Import tax valuation as per the law on export and import taxes + Import tax + Additional import tax according to the law (if any) + Special consumption tax (if any) + Environmental protection tax (if any).

What are the supplements regarding entities exempt from VAT in Vietnam?

Based on Article 5 of the Law on Value-Added Tax 2024 (effective from July 1, 2025), adjustments to the regulations concerning entities exempt from VAT in Article 5 of the Law on Value-Added Tax 2008 (amended by Law No. 31/2013/QH13 and Law No. 106/2016/QH13) are as follows:

(1) Omission of some entities exempt from VAT

- Omission of certain entities currently exempt from VAT, including:

+ Fertilizers; specialized machinery and equipment for agricultural production; offshore fishing vessels;

+ Securities depository; market organization services of stock exchanges or securities trading centers; other securities trading activities...

(2) Exported products that are processed from natural resources and minerals transformed into other products are exempt from VAT and must adhere to the List prescribed by the Government of Vietnam.

Previously, exported products processed from natural resources and minerals constituted over 51% of the product cost, making them non-VAT liable entities.

(3) Addition of imports donated or sponsored for disaster, pandemic, and war prevention as specified by the Government of Vietnam as entities exempt from VAT.

Which entities are VAT taxpayers in Vietnam from July 1, 2025?

Based on Article 4 of the Law on Value-Added Tax 2024 (effective from July 1, 2025), VAT taxpayers are defined as follows:

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

- Organizations and individuals importing goods subject to VAT (hereinafter referred to as importers).

- Organizations and individuals engaged in production, business activities in Vietnam purchasing services (including cases where services are linked with goods) from foreign organizations without a permanent establishment in Vietnam, and individuals overseas who are non-residents in Vietnam, except for provisions in Clauses 4 and 5 of Article 4 of the Law on Value-Added Tax 2024 (effective from July 1, 2025); organizations in Vietnam purchasing goods and services for activities exploring, developing oil and gas mines from foreign organizations without a permanent establishment in Vietnam, and individuals overseas as non-residents in Vietnam.

- Foreign suppliers without a permanent establishment in Vietnam engaging in e-commerce, digital-based business with Vietnamese organizations, and individuals (hereinafter referred to as foreign suppliers); organizations managing foreign digital platforms performing tax withholding and payment on behalf of foreign suppliers; organizations doing business in Vietnam applying the deduction-based VAT method for purchasing services from foreign suppliers without a permanent establishment in Vietnam through e-commerce channels or digital platforms performing tax withholding and payment on behalf of foreign suppliers.

- Organizations managing e-commerce trading platforms, digital platform managers with payment functions performing tax withholding and declaration of withheld tax for business households and individuals conducting business on e-commerce platforms, and digital platforms.

- Taxpayers in cases where foreign suppliers provide services to buyers being business organizations in Vietnam applying the deduction-based tax method as specified in Clause 4, Article 4 of the Law on Value-Added Tax 2024 (effective from July 1, 2025).