Starting July 1, 2025, the 2024 VAT Law introduces significant changes, extending the scope of taxpayers to include foreign suppliers without permanent establishments in Vietnam. These suppliers, who sell goods or provide services to Vietnamese customers via e-commerce platforms or other digital channels, will now be subject to value-added tax (VAT).

New Scope of VAT Payers

Under the new regulations, entities that act as operators of foreign digital platforms will be responsible for crediting and paying VAT on behalf of foreign suppliers. Additionally, organizations running e-commerce and digital platforms with payment functions must declare and pay VAT for households and individuals conducting business on their platforms.

Vietnam-based businesses applying the VAT credit method will also have expanded obligations. When these businesses purchase services from foreign suppliers operating via digital platforms, they will be required to credit and pay VAT on behalf of the suppliers.

Expanded List of Non-Taxable Items

The updated law also broadens the list of goods and services exempt from VAT. Newly added non-taxable items include:

  1. Charges specified in loan agreements between the Vietnamese Government and foreign lenders.
  2. Goods imported by financial leasing companies and directly transported to non-tariff zones for leasing to enterprises operating within those zones.
  3. Goods imported to aid disaster, epidemic, or war prevention and mitigation.
  4. National relics, antiques, and treasures imported by competent state agencies as prescribed by law.

Increased Turnover Threshold for VAT Liabilities

A notable revision is the increase in the turnover threshold for business households and individuals to be subject to VAT. Previously set at VND 100 million, this threshold has now doubled to VND 200 million, offering relief to smaller businesses.

The new VAT Law aims to enhance tax compliance and broaden the tax base, particularly in the rapidly growing e-commerce sector. These changes are expected to contribute to Vietnam’s fiscal stability while supporting the development of a fair and equitable tax system.

The above information is provided by Mys Law. For any questions regarding the content of this article, please contact 0969.361.319 or email: [email protected] for further clarification. Best regards!

Compiler: Nguyen Anh Quan