Vietnam’s regulatory landscape in tax and compliance continues to evolve. Starting in 2025, several significant legislative changes will come into effect, impacting both local and foreign businesses, particularly those engaged in international trade, digital services, and investment activities. Below is an overview of the most relevant developments to monitor.
New VAT Law Effective from 1 July 2025
Vietnam has introduced a substantial reform of its VAT framework, aimed at aligning local tax practices with international standards and improving administrative efficiency.
Redefined scope of goods and services eligible for 0% VAT
The new law provides clearer definitions of goods and services eligible for the preferential 0% VAT rate:
- Exported goods: those sold to foreign entities for use outside Vietnam, or sold from mainland Vietnam to enterprises in non-tariff zones for use in export-oriented manufacturing.
- Exported services: those directly provided to individuals and businesses abroad and consumed outside Vietnam, or to businesses in non-tariff zones supporting export production.
Foreign businesses in e-commerce and digital services
As of 1 July 2025, goods and services supplied by foreign vendors via digital and e-commerce platforms will be subject to a 10% VAT rate. Foreign enterprises must take proactive steps to ensure full compliance with these new rules.
Adjustments to VAT Refund Eligibility
The revised law limits VAT refund eligibility, excluding cases such as changes in ownership, business type, mergers, consolidations, splits or demergers, and allowing refunds only in the event of business dissolution.
However, new refund scenarios are introduced for businesses engaged exclusively in supplying goods and services subject to the 5% VAT rate. These businesses may be eligible for VAT refunds if unrecovered input VAT reaches or exceeds VND 300 million (approx. USD 11,900) over 12 consecutive months or four quarters. Refunds may also apply to investment activities related to business expansion.
New VAT Compliance Thresholds and Payment Rules
- Mandatory non-cash payments: All transactions equal to or exceeding VND 5 million (approx. USD 192), including VAT, must be settled via bank transfer, unless an exemption is granted by the government.
- Revised VAT exemption threshold: Effective from 1 January 2026, the annual revenue threshold for VAT exemption will increase from VND 100 million (USD 3,900) to VND 200 million (USD 7,900), affecting small businesses and household enterprises.
In-Country Import-Export Model Under Review
Vietnamese authorities are considering the abolition of the in-country import-export model, which is not commonly adopted internationally. A draft customs regulation proposes to phase out the mechanism whereby a Vietnamese supplier delivers goods to another local company at the request of a foreign buyer with a commercial presence in Vietnam.
While no final decision has been made, an official letter from the Ministry of Finance (No. 1872/BTC-TCT dated 17 February 2025) clarified that such transactions, even if the goods are delivered to bonded warehouses, do not qualify as exports and are thus ineligible for the 0% VAT rate.
Companies relying on this model are encouraged to carefully assess their operations and prepare alternative strategies to adapt to potential regulatory shifts.
Global Minimum Tax (GMT) Implementation
Vietnam has initiated the adoption of the Global Minimum Tax (GMT) with Resolution No. 107/2023/QH15, effective from the 2024 financial year. However, specific implementation guidelines remain under draft, largely due to a recent internal restructuring of Vietnam’s tax administration that has significantly reduced the number of tax offices nationwide through mergers and workforce reductions.
The upcoming fiscal and customs changes in Vietnam call for thorough assessment by businesses operating in or entering the market. These updates will directly impact operational processes, pricing structures, and tax compliance obligations.
Kelmer Group remains at your side to support your strategic planning, compliance efforts, and operational continuity in Vietnam.