Value-added tax rates in Vietnam from July 1, 2025 according to the latest law

Value-added tax rates in Vietnam from July 1, 2025 according to the latest law​ (Image from Internet)

On November 26, 2024, the National Assembly of Vietnam passed the Value Added Tax Law 2024.

Value-added tax rates in Vietnam from July 1, 2025 according to the latest law

Article 9 of the Value Added Tax Law 2024 stipulates the value added tax rate in Vietnam from July 1, 2025, as follows:

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

(i) Exported goods include: goods from Vietnam sold to organizations, individuals abroad and consumed outside of Vietnam; goods from inland Vietnam sold to organizations in the non-tariff zone and consumed in the non-tariff zone serving directly for export production activities; goods sold in isolated areas to individuals (foreigners or Vietnamese) who have completed exit procedures; goods sold in duty-free shops;

(ii) Exported services include: services provided directly to organizations, individuals abroad and consumed outside of Vietnam; services provided directly to organizations in the non-tariff zone and consumed in the non-tariff zone serving directly for export production activities;

(iii) Other exported goods, services include: international transportation; rental of transport vehicles used outside the territory of Vietnam; services in the aviation, maritime sectors provided directly or through agencies for international transport; construction and installation activities overseas or in non-tariff zones; digital information content products supplied to foreign parties with dossiers, documents proving consumption outside of Vietnam as stipulated by the Government of Vietnam; spare parts, materials for repairing, maintaining vehicles, machinery, equipment for foreign parties and consumed outside of Vietnam; processed goods forwarded for export as prescribed by law; goods, services subject to value added tax exemption when exported, except for cases not applying the 0% tax rate as prescribed in (iv);

(iv) Cases not applying the 0% tax rate include: technology transfer, intellectual property rights transfer abroad; reinsurance services abroad; credit provision services; capital transfer; derivatives products; postal, telecommunications services; exported products specified in Clause 23 Article 5 of the Value Added Tax Law 2024; tobacco, alcohol, beer imported and then exported; gasoline, oil purchased domestically sold to business establishments in the non-tariff zone; cars sold to organizations, individuals in the non-tariff zone.

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

- Clean water for production and domestic use not including bottled, caned water and other types of beverages;

- Fertilizers, ores for producing fertilizers, plant protection products and growth stimulants for animals as prescribed by law;

- Services of earthworks, dredging canals, ditches, ponds serving agricultural production; planting, caring, pest control for crops; preliminary processing, preserving agricultural products;

- Cultivated plant products, forest products (except wood, bamboo shoots), livestock, aquaculture, fishing not processed into other products or only through preliminary processing, except products specified in Clause 1, Article 5 of the Value Added Tax Law 2024;

- Rubber latex in crepe, sheet, bun, aggregate forms; nets, ropes and yarn for weaving fishnets;

- Products made from jute, sedge, bamboo, rattan, leaves, straw, coconut shells, western reeds, and other handicrafts made from agricultural by-products; raw and combed cotton fibers; newsprint;

- Ships for fishing in the sea; specialized machinery and equipment serving agricultural production as regulated by the Government of Vietnam;

- Medical equipment as defined by law on medical equipment management; preventive, therapeutic drugs; pharmaceutical ingredients, pharmaceutical substances for manufacturing preventive, therapeutic drugs;

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

- Traditional, folk performing arts activities;

- Toys for children; all kinds of books, except books specified in Clause 15, Article 5 of the Value Added Tax Law 2024;

- Scientific, technological services as regulated by the Law on Science and Technology;

- Selling, leasing, hire-purchase of social housing according to the Housing Law.

(3) A tax rate of 10% applies to goods, services not specified in (1) and (2), including services provided by foreign suppliers with no permanent establishments in Vietnam offered to organizations, individuals in Vietnam via e-commerce channels and digital platforms.

Note:

- Business establishments dealing in multiple types of goods and services with different value added tax rates (including exempt items) must declare value added tax for each rate applicable to each type of goods, services; if the business establishment does not determine by each tax rate, it must compute and pay tax at the highest rate of goods, services produced, and traded by the establishment.

- Plant products, forest products, livestock, aquaculture, fishing not processed into other products or only through ordinary preliminary processing used for animal feed, pharmaceutical ingredients will apply the value added tax rate as specified for plant products, forest products, livestock, aquaculture.

Scraps, by-products, waste collected for recycling, reuse when sold will apply the rate according to the rate of the scraps, by-products, waste sold.

The Value Added Tax Law 2024 takes effect from July 1, 2025.

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE