Summary of New Tax Policies Effective from July 1, 2025 – What Businesses and Individuals Should Know

Effective from July 1, 2025, the 2024 Law on Value Added Tax (VAT) will come into force, introducing significant changes in tax policy. These new regulations will impact not only businesses but also household and individual businesses. Below are 7 key changes you should be aware of:

1. Adjustment of VAT-Exempt Entities

According to Article 5 of the 2024 VAT Law, several goods are no longer exempt from VAT, including:

• Fertilizers

• Agricultural machinery and equipment

• Offshore fishing vessels

• Certain securities and depository services, etc.

New exemptions added: Imported goods used for humanitarian purposes such as natural disasters, epidemics, or war relief.

2. Revision of the Taxable Value for Imported Goods

The new formula for calculating VAT for imports is:
VAT taxable price = Import value + Import duty (if any) + Special consumption tax (if any) + Environmental protection tax (if any)
(This replaces the previous method which calculated only from the border gate value.)

3. New Taxable Value Rules for Promotional Goods and Services

According to Article 7 of the 2024 VAT Law, goods and services used for promotions in accordance with the law will have a VAT value of 0, helping businesses confidently conduct marketing campaigns.

4. New Conditions for VAT Input Deduction

From July 1, 2025, all purchase invoices must be accompanied by non-cash payment evidence to be eligible for VAT deduction (except for special cases as prescribed by the Government).

5. Additional Cases Eligible for VAT Refund

Enterprises that produce goods/services subject to a 5% VAT rate are eligible for a refund if:

• Uncredited input VAT ≥ VND 300 million over 12 months or 4 consecutive quarters.

6. Adjustment of VAT Rates for Certain Goods and Services

• Some items will move from VAT-exempt to 5% VAT.

• Some from 5% to 10% VAT.

• New categories added to the 0% VAT rate, such as international transport, goods at duty-free shops, etc.

7. VAT Threshold for Household and Individual Businesses Raised to VND 200 Million Starting January 1, 2026

From January 1, 2026, households/individuals with annual revenue below VND 200 million will be exempt from VAT liability.

8. Treatment of Completed Investment Projects

If an investment project (including phased projects or segments that are completed) is completed but the business has not yet applied for VAT refunds incurred during the investment phase, it must submit the VAT refund application within 1 year from the completion date of the project, phase, or segment, in accordance with the regulations.

Viet Australia
Viet Australia Auditing Company is an independent auditing organization licensed and established in 2007 in the Socialist Republic of Vietnam.