The Law on Value Added Tax 2024 (replacing the Law on VAT 2008) was passed by the National Assembly on November 26, 2024, and will officially take effect from July 1, 2025. Here are 7 new highlights of this law:
1. Adjusting subjects not subject to VAT
The new law eliminates a number of subjects not subject to VAT according to the old regulations, including: fertilizers; machinery and equipment for agricultural production; offshore fishing vessels; securities deposits; securities trading activities...
In addition, exported products from natural resources and minerals after processing are only exempt from tax if they are on the List prescribed by the Government. The Law also adds tax exemptions for imported goods used to finance and support the prevention of natural disasters, epidemics, and war.
2. Amending taxable prices for imported goods
From July 1, 2025, the VAT calculation price for imported goods will include: import tax calculation price + import tax (including additional if any) + special consumption tax (if any) + environmental protection tax (if any). This is a change from the current calculation method, which is based only on the price at the border gate.
3. Supplementing regulations for promotional goods
The new law stipulates the VAT calculation price at 0 for goods and services used for promotion in accordance with commercial law - a point never mentioned in the old Law.
4. Adjusting VAT rates for some goods and services
Some items are converted from non-taxable to 5% tax rate such as: fertilizers, fishing vessels. Some others increased taxes from 5% to 10%, including:
Unprocessed forest products;
Sugar and by-products such as rust, sugarcane;
Equipment for teaching, research, and testing;
Cultural, sports activities, film screenings, exhibitions...
5. Adding subjects subject to 0% tax rate
The new law adds subjects applying a tax rate of 0%, including:
International transportation;
Construction works, installed abroad or in non-taxable areas;
Goods sold at tax-free stores or airport quarantine areas;
Transport vehicle rental services for use outside the territory; aviation and maritime services for international transportation.
6. Changes in conditions for deducting input VAT
From July 1, 2025, all transactions to buy goods and services must have non-cash payment documents, including transactions under 20 million VND - different from current regulations only applicable to transactions of 20 million VND or more.
In addition, documents such as packaging forms, receipts, and insurance documents (if any) are also added as a basis for deducting input tax for export goods.
7. Supplementing tax refund cases
The new law adds the case: Enterprises that only produce and supply goods and services subject to 5% tax, if after 12 months (or 4 quarters) have an input VAT that has not been fully deducted of VND300 million or more, will be refunded.
