On 26 November 2024, at the 8th Session Program, with the majority of National Assembly deputies voting in favour, the National Assembly officially passed the Law on VAT 2024.

The summary of the new points in the VAT Law 2024 is  specifically as follows:

  • Adjustment of subjects not under VAT

The Article 5 adjusts the regulations on subjects not under VAT in Article 5 of the amendment and supplemented VAT Law 2008 which was amended by VAT Law 2013 and Law on VAT, Law on SCT and Law on Tax Management 2016 as follows:

  • Omit some subjects not under VAT according to current regulations including:
  • Fertilizers; specialized machinery and equipment for agricultural production; offshore fishing vessels;
  • Securities depository; market organization services of stock exchanges units or securities trading centres; other securities business activities...
  • Export products composed of resources and minerals that have been mined and subsequently processed into other goods exempt from VAT should adhere to the prescribed list established by the government.

Previously, regulating export products processed from resources and minerals were not subject to VAT when the combined value of resources and minerals and associated energy costs constituted 51% or more of the total product cost.

  • Imported goods supporting and sponsoring natural disaster prevention, epidemics, and wars according to Government regulations are not subject to VAT.
  • Amending regulation on the taxable price for imported goods

Article 7 of Law on VAT 2024 stipulates the taxable price for imported goods is the import taxable price by the provisions of the Law on Export and Import Tax adds import taxes, additional import taxes as specified by the Law (if any), as well as SCT (if any) and EPT (if any).

  • Supplementing taxable prices for promotion goods and services

Article 7 of Law on VAT 2008 complements the regulation that taxable prices for promotion goods and services following the provisions of the Law on Commerce are defined as nil (0).

  • Adjusting tax rates of some goods and services

Article 9 of Law on VAT 2024 alters the tax rates on various goods and services as follows:

  • Supplement more subjects to a 0% tax rate:
  • International transportation
  • Goods sold in quarantine areas to individuals (foreigners or Vietnamese) who have completed exit procedures; goods sold at duty-free shops;
  • Export services include: Vehicle rental services consumed outside Vietnam territory; airline and maritime services provided directly or through agents for international transport.
  • Non-taxable products converted to 5% tax rate:
  • Fertilizer;
  • Fishing vessels in the sea.
  • Products subject to 5% tax rate change to 10%
  • Unprocessed forest products;
  • Sugar; byproducts in sugar production, including molasses, bagasse, and megass;
  • Specialized equipment and tools for teaching, research, and scientific experiments
  • Cultural activities, exhibitions, physical education and sports; art performances; film production; film import, distribution and screening.

(5) Modifying the conditions of input VAT deduction

  • Purchasing goods and services under 20 million VND should have non-cash payment documents:

Previously, according to the provisions of Clause 2, Article 12, goods and services purchased at each time with a value of less than twenty million VND should not need non-cash payment documents to deduct VAT.

However, according to point b, clause 2, Article 14, all purchased goods and services should have non-cash payment documents, except for special cases as the Government prescribed.

  • Adding documents for input VAT deduction

Under point c, clause 2, Article 14, exported goods and services are enabled to đeuct input VAT when having packing lists, bills of lading, and cargo insurance documents (if any); except for special cases as prescribed by the Government.

This content was not previously regulated.

(6) Add more tax refund cases

Article 15 of the Law on VAT 2024 supplements the eligible cases of tax refund as follows:

Business establishments, that exclusively produce goods and provide services subject to a 5% VAT rate and have input VAT of 300 million VND or more has not been fully deducted after 12 months or 4 quarters, are eligible for a VAT refund.