Law 48/2024/QH15 on Value-Added Tax

 LAW

ON VALUE-ADDED TAX^[1]

Pursuant to the Constitution of the Socialist Republic of Vietnam;

The National Assembly promulgates the Law on Value-Added Tax.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Law provides taxable objects, non-taxable objects, taxpayers, tax bases and tax calculation methods, and tax credit and refund, with respect to value-added tax.

Article 2. Value-added tax

Value-added tax (VAT) is a tax imposed on the added value of goods or services arising in the process from production, circulation to consumption.

Article 3. Taxable objects

Goods and services used for production and trading or consumed in Vietnam are subject to VAT, except those specified in Article 5 of this Law.

Article 4. Taxpayers

1. Organizations, households and individuals that produce or trade in goods or services subject to VAT (below referred to as business establishments).

2. Organizations and individuals that import goods subject to VAT (below referred to as importers).

3. Vietnam-based production and business organizations and individuals that purchase services (including also services associated with goods) from foreign organizations without permanent establishments in Vietnam or from overseas individuals being non-residents in Vietnam, except those specified in Clauses 4 and 5 of this Article; Vietnam-based production and business organizations that purchase goods and services for prospecting, exploration and development of oil and gas fields and extraction of oil and gas from foreign organizations without permanent establishments in Vietnam or from overseas individuals being non-residents in Vietnam.

4. Foreign suppliers without permanent establishments in Vietnam that conduct e-commerce or digital platform-based business with organizations and individuals in Vietnam (below referred to as foreign suppliers); organizations that are managers of foreign digital platforms that credit and pay tax on behalf of foreign suppliers; Vietnam-based business organizations that apply the VAT credit method to calculate their payable VAT amounts, when purchasing services from foreign suppliers without permanent establishments in Vietnam via e-commerce channels or digital platforms and crediting and paying tax on behalf of these foreign suppliers.

5. Organizations that are managers of e-commerce exchanges or managers of digital platforms with payment functions that credit and pay tax on behalf of, and declare credited tax amounts for households and individuals doing business on e-commerce exchanges and digital platforms.

6. The Governemnt shall detail Clauses 1, 4 and 5 of this Article; and promulgate regulations on taxpayers in case foreign suppliers provide services to purchasers being Vietnam-based business organizations and applying the tax credit method speified in Clause 4 of this Article.

Article 5. Non-taxable objects

1. Crop, forest and livestock production products, and reared and fished aquaculture products that have not yet been processed into other products or have just undergone preliminary processing and are sold by producing and fishing organizations and individuals, and those at the stage of importation.

2. Domestic animal breeding products in accordance with the law on livestock production, and propagating materials of plant varieties in accordane with the law on crop production.

3. Animal feed in accordance with the law on livestock production, and aquafeed in accordance with the law on fisheries.

4. Salt products made of seawater, natural rock salt, refined salt, and iodized salt in which sodium chloride (NaCl) is a major component.

5. Houses classified as public assets sold by the State to current tenants.

6. Activities of irrigation and drainage; soil ploughing and harrowing; dredging of intra-field canals and ditches for agricultural production; provision of services of harvesting farm produce.

7. Transferred land use rights.

8. Life insurance, health insurance, student insurance, and other human-related insurance services; insurance for domestic animals, insurance for plants, and other agricultural insurance services; insurance for ships, boats, equipment and other necessary tools directly for fishing; reinsurance; insurance for oil and gas structures and equipment, and oil tankers of foreign nationality hired by oil and gas contractors or foreign subcontractors to operate in Vietnam’s maritime zones and overlapping maritime zones in which Vietnam and countries with adjacent or opposite coasts have agreed to jointly fish.

9. The following financial, banking, securities trading and commercial services:

a/ Credit extension services in accordance with the law on credit institutions, and charges specified in loan agreements concluded between the Government of Vietnam and foreign lenders;

b/ Lending services of taxpayers other than credit institutions;

c/ Securities trading, including securities brokerage; securities dealing; securities issuance underwriting; securities investment consultancy; management of securities investment funds; and management of securities investment portfolio in accordance with the law on securities;

d/ Capital transfer, including transfer of part or the whole of the capital amount invested in other economic organizations (regardless of whether new legal persons are established or not), securities transfer, transfer of capital contribution rights and other forms of capital transfer as specified by law, including also the case of selling enterprises to other enterprises for production and business, and purchasing enterprises inheriting all rights and obligations of selling enterprises in accordance with law. Capital transfer specified at this Point does not include the transfer of investment projects and asset sale;

dd/ Sale of debts, including payables and receivables;

e/ Foreign currency trading;

g/ Derivative products in accordance with the laws on credit institutions, securities, and commerce, including interest rate swapping; forward contracts; futures contracts; options contracts; and other derivative products;

h/ Sale of collateral of debts of Government-established organizations with 100% charter capital held by the State and having the function of debt trading to deal with non-performing loans of Vietnamese credit institutions.

10. The following healthcare and animal health services:

a/ Healthcare services, including medical examination and treatment and disease prevention services for people, family planning services, health nursing and rehabilitation services for patients; care services for the elderly and people with disabilities; patient transportation, rental of hospital rooms and beds in healthcare facilities; testing, X-ray, imaging, scanning; blood and blood products for patients.

Care services for the elderly and people with disabilities include also medical care, nutrition, and organization of cultural, sports, entertainment, physical therapy, and rehabilitation activities for the elderly and people with disabilities.

In case the medical treatment service package specified by the Ministry of Health covers also the use of cure medicines, revenues from cure medicines included in such package are not subject to VAT;

b/ Animal health services, including medical examination and treatment and preventive services for domestic animals.

11. Funeral services.

12. Renovation, repair and construction of cultural-historical relics, beauty spots, cultural, artistic, public service and infrastructure works and houses for social policy beneficiaries which are funded by people’s contributions or humanitarian aid (accounting for 50% or more of the total capital amount for the works).

13. Teaching and vocational training activities in accordance with the laws on education and vocational education.

14. State budget-funded radio and television broadcasts.

15. Publication, import and distribution of newspapers, journals, bulletins, special issues, political books, textbooks, teaching materials, law books, techno-scientific books, books serving external information activities, books printed in ethnic minority languages, and propaganda paintings, pictures and posters, including those in the forms of audio or visual tapes or disks or e-data; money and money printing activities.

16. Mass transit by bus, tramcar and inland waterway vehicle.

17. Machinery, equipment, parts and supplies which cannot be manufactured at home and need to be imported for direct use in scientific research and technological development; machinery, equipment, spare parts, special-purpose vehicles and supplies which cannot be manufactured at home and need to be imported for prospecting, exploring and developing oil and gas fields; airplanes, helicopters, gliders, oil rigs, ships and boats which cannot be manufactured at home and need to be imported for formation of enterprises’ fixed assets or which are hired from foreign partners for production and business activities or for lease.

18. National defense and security products on the lists promulgated by the Minister of National Defense and the Minister of Public Security; products and services imported for the national defense and security industry on the list promulgated by the Prime Minister.

19. Goods imported as humanitarian aid or non-refundable aid; goods and services sold to foreign organizations or individuals or international organizations for use as humanitarian aid or non-refundable aid to Vietnam.

20. Goods in border-gate transfer or transit via Vietnam’s territory; goods temporarily imported for re-export; goods temporarily exported for re-import; raw materials imported for the production or processing of goods for export under contracts signed with foreign partners; goods and services traded between foreign countries and non-tariff areas and among non-tariff areas.

Goods imported from abroad by financial leasing companies and transported directly into non-tariff areas for financial leasing to businesses in non-tariff areas.

21. Technology transfer in accordance with the Law on Technology Transfer; transfer of intellectual property rights in accordance with the Law on Intellectual Property; software products and software services as specified by law.

22. Gold bars and ingots that have not yet been processed into fine-art articles, jewelries or other products at the stage of importation.

23. Exported products that are mined natural resources or minerals and have not been processed into other products, and exported products that are mined natural resources or minerals and have been processed into other products on the Government-promulgated list in line with the State’s orientations for not promoting export or restricting export of natural resources and raw minerals.

24. Artificial products used as substitutes for diseased people’s organs, including also products used as organs transplanted for the long term in human body; crutches, wheelchairs and other tools used exclusively for people with disabilities.

25. Goods and services of production and business households or individuals with the annual turnover of up to VND 200 million; assets sold by non-business organizations or individuals other than VAT payers; national contingency commodities sold by the national contingency agency; charges and fees specified by the law on charges and fees.

26. Goods imported as mentioned below:

a/ Gifts for state agencies, political organizations, socio-political organizations, socio-political-professional organizations, social organizations, socio-professional organizations or people’s armed forces units within the import duty-free quota in accordance with the law on import duty and export duty;

b/ Presents and gifts within the import duty-free quota in accordance with the law on import duty and export duty that are given by foreign organizations and individuals to Vietnamese organizations or individuals; belongings of foreign organizations or individuals within diplomatic immunity quotas, and movable assets within the import duty-free quota in accordance with the law on import duty and export duty;

c/ Goods within the import duty-free luggage allowance in accordance with the law on import duty and export duty;

d/ Goods imported as support and donations for the prevention, control and remediation of consequences of catastrophes, disasters, epidemics and wars in accordance with the Government’s regulations;

dd/ Goods on the list of goods bought, sold or exchanged across the border by border residents in accordance with law to serve their production and consumption and within the import duty-free quota in accordance with the law on import duty and export duty;

e/ Vestiges, antiquities and national treasures in accordance with the law on cultural heritage that are imported by competent state agencies.

27. Establishments trading in goods or services not subject to VAT specified in this Article are not entitled to input VAT credit or refund, except the cases eligible for the tax rate of 0% specified in Clause 1, Article 9 of this Law.

28. The Government shall detail this Article. The Minister of Finance shall specify dossiers and procedures for identification of non-taxable objects specified in this Article.

Chapter II

TAX BASES AND TAX CALCULATION METHODS

Article 6. Tax bases

VAT bases include taxable price and tax rate.

Article 7. Taxable price

1. The taxable price is specified as follows:

a/ For goods and services sold by production and business establishments, the taxable price is the selling price exclusive of VAT. For excise tax-liable goods and services, the taxable price is the selling price inclusive of excise tax but exclusive of VAT; for environmental protection tax-liable goods, the taxable price is the selling price inclusive of environmental protection tax but exclusive of VAT; for excise tax- and environmental protection tax-liable goods, the taxable price is the selling price inclusive of excise tax and environmental protection tax but exclusive of VAT;

b/ For imported goods, the taxable price is the dutiable value of an imported goods in accordance with the law on import duty and export duty plus import duty plus duty amounts being additional import duty amounts in accordance with law (if any), plus excise tax (if any) and plus environmental protection tax (if any).

c/ For goods and services used for barter, internal consumption or donation, the taxable price is the price for calculation of VAT on goods and services of the same or equivalent kinds at the time of barter, consumption or donation.

For goods and services used for sales promotion in accordance with the commercial law, the taxable price is zero (0);

d/ For asset lease, the taxable price is the rental exclusive of VAT.

In case of asset lease subject to periodical rental payment or advance rental payment for the lease period, the taxable price is the VAT-exclusive rental paid periodically or in advance;

dd/ For goods sold by the mode of installment or deferred payment, the taxable price is the lump-sum selling price of such goods, exclusive of VAT, excluding interests on installment or deferred payment amounts;

e/ For goods processing, the taxable price is the processing remuneration, exclusive of VAT;

g/ For construction and installation activities, the taxable price is the value of the handed-over work, work item or job, exclusive of VAT. If construction or installation activities do not cover materials, machinery or equipment, the taxable price is the construction or installation value, excluding the value of materials, machinery or equipment;

h/ For real estate business, the taxable price is the real estate-selling price, exclusive of VAT, minus land use levy or land rental remitted into the state budget (the land price to be deducted). The Government shall provide the determination of the land price to be deducted as specified at this Point in accordance with the land law;

i/ For goods trading or service agency and brokerage with commission, the taxable price is the commission on these activities, exclusive of VAT;

k/ For goods and services for which invoices indicating payment prices inclusive of VAT may be used, the taxable price shall be determined according to the following formula:

l/ For casino, prize -earning video games, and betting, the taxable price is the proceeds from such activities minus the amount of money exchanged and returned to customers and not yet used up and the prize paid to customers (if any), inclusive of excise tax but exclusive of VAT;

m/ For production and business activities, including: power generation activities of the Vietnam Electricity; transportation, loading/unloading; tour services; pawn services; VAT-liable books sold at prices printed on covers; printing activities; agents providing services of assessment, consideration of compensation, claiming compensation from third party, handling of compensation goods with remuneration or commissions wholly paid, the taxable price is the selling price exclusive of VAT. The Government shall provide the taxable price for production and business activities specified at this Point.

2. Taxable prices of goods and services specified in Clause 1 of this Article include also surcharges and additional charges to be enjoyed by business establishments.

3. The Government shall detail this Article.

Article 8. Time for determining VAT

1. The time for determining VAT is:

a/ The time of transferring ownership or use rights to the purchaser or the time of making an invoice, regardless of whether money has been collected or not, for goods;

b/ The time of completing the provision of services or the time of making a service provision invoice, regardless of whether money has been collected or not, for services.

2. The time for determining VAT on the following goods and services shall be specified by the Government:

a/ Exported goods and imported goods;

b/ Telecommunications services;

c/ Insurance business services;

d/ Power supply, power generation and clean water production activities;

dd/ Real estate business activities;

e/ Construction and installation activities and oil and gas activities.

Article 9. Tax rates

1. The tax rate of 0% shall be applied to the following goods and services:

a/ Exported goods, including: goods sold from Vietnam to overseas organizations and individuals and consumed outside Vietnam; goods sold from Vietnam to organizations in non-tariff areas and consumed in non-tariff areas to directly serve export production activities; goods sold in immigration sterile area to individuals (foreigners or Vietnamese) who have completed exit procedures; and goods sold at duty-free shops;

b/ Exported goods, including services provided directly to overseas organizations and individuals and consumed outside Vietnam; services directly provided to organizations in non-tariff areas and consumed in non-tariff areas to directly serve export production activities;

c/ Other exported goods and services, including: international transportation; lease of transportation vehicles used outside the territory of Vietnam; services of aviation and maritime sectors that are provided directly or via agents for international transportation; construction and installation of structures in foreign countries or non-tariff areas; digital information contents provided to foreign partners accompanied with dossiers and documents proving their consumption outside Vietnam in accordance with the Government’s regulations; spare parts and supplies for repair or maintenance of vehicles, machinery or equipment of foreign partners which are consumed outside Vietnam; goods processed for export in accordance with law; and goods and services not subject to VAT upon export, except cases not eligible for the tax rate of 0% as specified at Point d of this Clause;

d/ Cases in which the tax rate of 0% is not applicable include offshore transfer of technologies or intellectual property rights; offshore reinsurance services; credit extension services; capital transfer; derivative products; post and telecommunications services; exported products specified in Clause 23, Article 5 of this Law; cigarettes, alcohol and beer imported then exported; petrol and oil purchased domestically and sold to business establishments in non-tariff areas; and automobiles sold to organizations and individuals in non-tariff areas.

2. The tax rate of 5% shall be applied to the following goods and services:

a/ Clean water for production and daily life, excluding bottled water of all kinds and other beverages;

b/ Fertilizers, ores for fertilizer production, pesticides, and animal growth stimulants as specified by law;

c/ Services of digging, embanking and dredging canals, ditches, ponds and lakes for agricultural production; growing, tending, and controlling pests and insects for, plants; preliminary processing and preservation of agricultural products;

d/ Crop, forest (except timber and bamboo) and livestock productionlivestock production products, and reared and fished aquaculture products that have not yet been processed into other products or have just undergone preliminary processing, except the products specified in Clause 1, Article 5 of this Law;

dd/ Rubber latex in the form of crepe latex, sheet latex, vermicelli latex, and rice latex; nets, main ropes and fibers for making fishing nets;

e/ Products made of jute, rush, bamboo, leaf, straw, coconut, husks and shells and Eichhornia crassipes, and other handicrafts made of agricultural raw materials; carded and combed cotton fabrics; paper for newspaper printing;

g/ Fishing vessels at sea; special-purpose machinery and equipment for agricultural production in accordance with the Government’s regulations;

h/ Medical equipment in accordance with the law on management of medical equipment; preventive and curative medicines; and medicinal substances and pharmaceuticals used as raw materials for the production of curative and preventive medicines;

i/ Teaching and learning aids, including models, figures, boards, chalk, rulers, compasses;

k/ Traditional and folk performing art activities;

l/ Children toys; books of all kinds, except the books specified in Clause 15, Article 5 of this Law;

m/ Scientific and technological services as specified in the Law on Science and Technology;

n/ Sale, lease and lease-purchase of social houses in accordance with the Housing Law;

3. The tax rate of 10% shall be applied to goods and services other than those specified in Clauses 1 and 2 of this Article, including also services provided by foreign suppliers without permanent establishments in Vietnam to organizations and individuals in Vietnam via e-commerce channels and digital platforms.

4. Business establishments that trade in different types of goods or services subject to various VAT rates (including also non-taxable objects) shall declare VAT at the tax rate applied to each type of goods or services; if failing to determine specific tax rates, business establishments shall calculate and pay tax at the highest tax rate applied to goods produced or services provided by them.

5. Crop, forest and livestock production products, and reared and fished aquacultre products that have not yet been processed into other products or have just undergone preliminary processing and used as animal feed or medicinal materials shall be subject to VAT tax rates applied to crop, forest, livestock production and aquaculture products.

Waste products, by-products and scraps that are recovered for recycling and reuse shall be subject to the tax rates for waste products, by-products and scraps when being sold.

6. The Government shall detail Clauses 1 and 2 of this Article. The Minister of Finance shall specify dossiers and procedures for applying the VAT rate of 0% specified in Clause 1 of this Article.

Article 10. Tax calculation methods

VAT calculation methods include tax credit method and direct tax calculation method.

Article 11. Tax credit method

1. Tax credit method is as follows:

a/ The payable VAT amount by the tax credit method is equal to the output VAT amount minus the creditable input VAT amount.

b/ The output VAT amount is equal to the total VAT amount for goods or services sold as written in the VAT invoice.

The VAT amount for goods or services sold as written in the VAT invoice is equal to the taxable price of sold taxable goods or services multiplied by the VAT rate for such goods or services.

If the invoice is written with the payment price inclusive of VAT, the output VAT is equal to the payment price minus the taxable price determined under Point k, Clause 1, Article 7 of this Law;

c/ The creditable input VAT amount is equal to the total VAT amount written in the VAT invoice on purchased goods or services and the document proving the payment of VAT on imported goods or document proving tax payment in cases of service purchase specified in Clauses 3 and 4, Article 4 of this Law, and satisfying the conditions specified in Article 14 of this Law.

2. The tax credit method shall be applied to business establishments that properly observe the regime on accounting, invoices and documents as specified by the law on accounting, invoices and documents; such establishments include:

a/ Business establishments with annual turnover of VND 1 billion or more from selling goods and providing services, excluding production and business households and individuals;

b/ Business establishments voluntarily applying the tax credit method, excluding production and business households and individuals;

c/ Foreign organizations and individuals providing goods or services for prospecting, exploration and development of oil and gas fields and extraction of oil and gas, that pay tax by the tax credit method and for which Vietnamese partners make tax declaration, credit and payment on their behalf.

3. The Government shall detail this Article.

Article 12. Direct tax calculation method

1. The payable VAT amount by the method of direct calculation of tax on added value is equal to the added value multiplied by the VAT rate applied to gold, silver and gem purchase, sale and processing.

The added value of gold, silver or gem purchase, sale and processing is equal to the selling price of gold, silver or gem minus the purchase price of such gold, silver or gem.

Business establishments that conduct gold, silver and gem purchase, sale and processing activities shall make separate accounting for these activities for paying tax by the method of direct calculation of tax on added value.

2. The payable VAT amount by the method of direct calculation of tax on turnover is equal to the percentage (%) multiplied by turnover, specifically as follows:

a/ Subjects of application:

a1/ Enterprises, cooperatives and unions of cooperatives which earn an annual turnover of less than VND 1 billion, except those voluntarily applying the tax credit method under Clause 2, Article 11 of this Law;

a2/ Production and business households and individuals, except those specified in Clause 3 of this Article;

a3/ Foreign organizations without Vietnam-based permanent establishments, and overseas individuals being non-residents in Vietnam that have incomes generated in Vietnam but fail to fully observe regulations on accounting, invoices and documents, excluding the foreign suppliers specified in Clause 4, Article 4 of this Law;

a4/ Other economic organizations, except those paying tax by the tax credit method specified in Clause 2, Article 11 of this Law;

b/ The rate used for VAT calculation is:

b1/ One percent, for goods distribution and supply;

b2/ Five percent, for services, and construction that does not cover materials;

b3/ Three percent, for production, transportation and services associated with goods, and construction that covers materials; or,

b4/ Two percent, for other business activities;

c/ Turnover used for VAT calculation is total proceeds from the sale of goods or services as written in the sale invoice, inclusive of surcharges and additional charges enjoyed by business establishments.

3. Production and business households and individuals that fail to observe or fully observe the accounting, invoice and document regime in accordance with law shall pay VAT by the presumption method in accordance with the Law on Tax Administration.

4. The Government shall detail Clause 1 of this Article. The Minister of Finance shall specify groups of goods and services subject to the application of the percentages specified at Point b, Clause 2 of this Article.

Chapter III

TAX CREDIT AND REFUND

Article 13. Prohibited acts in tax credit and refund

1. Purchasing, giving, selling, advertising, and brokering the purchase and sale of, invoices.

2. Creating fake transactions on purchase and sale of goods or provision of services, or conducting transactions in contravention of law.

3. Making goods sale or service provision invoices in the period of suspension of business operation, except the case of making invoices for customers to perform contracts signed before the date of notification of business operation suspension.

4. Using unlawful invoices and documents, or illegally using invoices and documents under the Government’s regulations.

5. Failing to transfer e-invoice data to tax offices under regulations.

6. Falsifying, misusing, illegally accessing or destroying the information system on invoices and documents.

7. Giving, receiving or brokering bribes or committing other acts related to invoices and documents to enjoy VAT credit or refund, or make VAT appropriation or evasion.

8. Colluding, covering up; colluding among tax administration officers, tax administration offices and business establishments, importers, and between business establishments and importers in using unlawful invoices and documents, or illegally using invoices and documents to enjoy VAT credit or refund, or make VAT appropriation or evasion.

Article 14. Input VAT credit

1. Business establishments that pay VAT by the tax credit method are entitled to input VAT credit as follows:

a/ Input VAT on goods or services used for the production or trading of VAT-liable goods or services may be wholly credited, including also uncompensated input VAT on lost goods and services subject to VAT, and goods suffering natural loss due to physical and chemical properties during transportation;

b/ For goods or services used for the production and trading of goods or services subject to VAT and those not subject to VAT, only the amount of input VAT on goods or services used for the production and trading of goods or services subject to VAT may be credited. Business establishments shall separately account creditable and non-creditable input VAT amounts. In case it isimpossible to separately account the creditable input VAT amount, such amount shall be calculated based on percentage of turnover from VAT-liable goods and services to total turnover from sold goods and services;

c/ Input VAT on goods or services sold to organizations or individuals using humanitarian aid or non-refundable aid may be wholly credited;

d/ Input VAT on goods or services used for prospecting, exploration and development of oil and gas fields may be wholly credited;

dd/ The input VAT amount arising in a month or quarter shall be declared and credited upon determining the payable tax amount of that month or quarter. The input VAT amount not wholly credited in that month or quarter shall be credited in the subsequent month or quarter.

In case a business establishment detects errors in the declared or credited input VAT amount, it may make tax declaration before the tax office or competent agency announces its decision on tax examination and inspection as follows:

Taxpayers shall make additional declaration in the month or quarter in which the incorrect input VAT amount is detected if the tax declaration in such month or quarter leads to an increase in the payable tax amount or a decrease in the refundable tax amount; taxpayers shall fully pay the increased payable tax amount or have the corresponding refunded tax amount recovered, and remit the late-payment interest (if any) to the state budget.

Taxpayers shall make declaration in the month or quarter in which the incorrect input VAT amount is detected, if the tax declaration in such month or quarter leads to a decrease in the payable tax amount or merely leads to an increase or a decrease in the creditable VAT amount to be carried forward to the subsequent month or quarter;

e/ Business establishments may account the non-creditable input VAT amount as expenses for enterprise income tax calculation or as historical costs of fixed assets in accordance with the law on enterprise income tax, except the VAT amount for goods or services purchased without cashless payment documents in accordance with the Government’s regulations;

g/ The Government shall provide in detail the credit of input VAT for goods and services that form fixed assets to serve employees; assets contributed as capital; goods and services purchased through authorization to other organizations or individuals named on invoices; fixed assets being passenger cars with 9 seats or less; and production and business establishments that organize closed production and centralized cost-accounting.

2. Conditions for input VAT credit:

a/ Having a value-added invoice on goods or service purchase or a document proving VAT payment at the stage of importation; or documents proving VAT payment on behalf of a foreign partner as specified in Clauses 3 and 4, Article 4 of this Law. The Minister of Finance shall provide documents of VAT payment on behalf of foreign partners;

b/ Having cashless payment documents for purchased goods and services, except particular cases in accordance with the Government’s regulations;

c/ For exported goods and services, apart from the conditions specified at Points a and b of this Clause, the concerned business establishment must also have a contract signed with the foreign partner on goods sale or processing or service provision; a goods sale or service provision invoice; a cashless payment document; a customs declaration form for exported goods; a packing list, bill of lading, and cargo issuance documents (if any). The Government shall specify conditions for tax credit in case of exporting goods via overseas e-commerce exchanges and a number of particular cases.

3. Business establishments that fail to comply with the provisions on tax credit of Clauses 1 and 2 of this Article, and have invoices and documents made from prohibited acts specified in this Law are not entitled to VAT credit.

4. The Government shall detail this Article.

Article 15. VAT refund

1. Tax refund for export activities:

a/ Business establishments that have exported goods or services in a month or quarter are entitled to VAT refund on a monthly or quarterly basis if they have the input VAT amount not yet fully credited is of VND 300 million or more, except goods imported then exported to other countries.

b/ Business establishments that have concurrently exported goods or services and domestically consumed goods or services in a month or quarter shall separately account the input VAT amount used for production and business of exported goods or services. If it is impossible to separately account the input VAT amount for exported goods or services, such amount shall be determined according to the proportion of the turnover from exported goods or services to the total turnover from taxable goods and services in the tax refund period. The tax refund period shall be counted from the VAT calculation period in which tax refund has not been granted for the input VAT amount not yet fully credited to the tax calculation period in which a tax refund request is made. 

After the input VAT amount for exported goods or services (including the input VAT amount separately accounted and the input VAT amount determined according to the above-mentioned proportion) is cleared against the payable input VAT amount for domestically consumed goods or services, if the remainder is VND 300 million or more, the concerned business establishment will be entitled to tax refund for such exported goods or services. The refundable VAT amount for exported goods and services must not exceed 10% of the turnover from exported goods and services in the tax refund period. The input VAT amount that has been determined for exported goods and services but has not been refunded because it exceeds 10% of the turnover from exported goods and services of the previous tax refund period shall be credited in the subsequent tax period in order to determine the refundable VAT amount for exported goods and services in the subsequent tax refund period.

2. Tax refund for investment activities:

a/ In case a business establishment that has registered to pay VAT by the tax credit method has investment projects (new or expanded ones) in accordance with the law on investment (including also investment projects implemented in phases or involving multiple items, except investment projects not involving formation of fixed assets of enterprises) that are currently in the investment phase, or projects on prospecting, exploration and development of oil and gas fields that are currently in the investment phase, and has the input VAT amount arising in the investment phase not yet entitled to tax refund, the business establishment shall clear such amount against the payable VAT amount for ongoing production and business activities (if any). After the clearing, if the input VAT amount not yet fully credited is VND 300 million or more, the business establishment is entitled to VAT refund.

In case an investment project has been completed (including also investment projects implemented in phases or multiple items with some implemented in phases and others already completed) while the business establishment has yet to refund VAT arising in the investment phase (for completed items or phases), the business establishment shall submit a dossier for VAT refund under regulations within 1 year since the date of completion of the investment project or phase/item.

The date of completion of the investment project or phase/item is the date the investment project or phase/item generates turnover. Turnover specified in this Clause does not include turnover arising in the period of trial operation, turnover from financial activities or liquidation of materials of the investment project.

b/ A business establishment is not entitled to VAT refund but may carry forward the tax amount not yet credited of an investment project in accordance with the law on investment to the subsequent period in the following cases:

b1/ The investment project fails to sufficiently contribute the charter capital amount registered at the time of submitting tax refund dossiers; the business establishment conducts business in sectors and trades subject to conditional business investment while neither fully satisfying the business conditions specified by the law on investment nor maintaining the full satisfaction of business conditions in the course of operation, except investment projects implemented in the investment phase which, according to the law on investment and specialized laws, are not subject to application for certificates for conducting business in sectors and trades subject to conditional business investment from competent state agencies, and investment projects for which, according to the law on investment and specialized laws, certificates for conducting business in sectors and trades subject to conditional business investment are not required;

b2/ Investment projects on extraction of natural resources and minerals (excluding projects on prospecting, exploration and development of oil and gas fields specified at Point a of this Clause) and investment projects on production of products that are natural resources and minerals extracted and processed into other products specified in Clause 23, Article 5 of this Law.

3. Business establishments that only produce goods or provide services subject to the VAT rate of 5% are entitled to VAT refund if the input VAT amount not yet fully credited is VND 300 million or more after 12 consecutive months or 4 consecutive quarters; for business establishments that produce goods or provide services subject to different VAT rates, they are entitled to tax refund according to the proportion rate as specified by the Government.

4. Business establishments that pay VAT by the tax credit method are entitled to VAT refund if, upon dissolution or bankruptcy, they have an overpaid VAT amount or have the input VAT amount not yet fully credited.

In case cooperative groups that pay VAT by the tax credit method are transformed into cooperatives, the cooperatives may take over the overpaid VAT amount or the input VAT amount not yet fully credited of cooperative groups for tax credit and refund under regulations.

5. Foreigners and overseas Vietnamese that hold passports or international travel papers are entitled to refund of tax on goods purchased in Vietnam and carried upon exit.

The Government shall specify dossiers, procedures, refundable tax amounts and tax refund methods for the cases specified in this Clause.

6. VAT refund for programs and projects funded with non-refundable official development assistance (ODA), non-refundable aid or humanitarian aid:

a/ Owners or principal contractors of, or organizations designated by foreign donors to manage, programs and projects funded with non-refundable ODA, are entitled to refund of the VAT amount already paid for goods and services purchased in Vietnam to serve these programs and projects;

b/ Vietnam-based organizations that use monetary non-refundable aid or humanitarian aid of foreign organizations or individuals to purchase goods and services for non-refundable aid or humanitarian aid programs and projects in Vietnam are entitled to refund of the VAT amount already paid for these goods and services.

7. Entities entitled to diplomatic privileges and immunities under regulations on diplomatic affairs that purchase goods and services in Vietnam for use are entitled to refund of the paid VAT amount written in the added-value invoice or payment document indicating the payment price inclusive of VAT.

8. Business establishments that have VAT refund decisions issued by competent agencies in accordance with law and cases eligible for VAT refund under treaties to which the Socialist Republic of Vietnam is a contracting party are entitled to tax refund.

9. To be eligible for tax refund under this Article, business establishments must satisfy the following conditions:

a/ To be eligible for tax refund under Clauses 1, 2, 3 and 4 of this Article, business establishments must be those paying VAT by the tax credit method, make and archive accounting books and accounting documents in accordance with the law on accounting; and have deposit accounts at banks under their tax identification numbers;

b/ Bussiness establishments must satisfy the condition on input VAT credit as specified in Clause 2, Article 14 and do not fall into the cases specified in Clause 3, Article 14 of this Law;

c/ Sellers have declared and paid VAT under regulations for invoices issued to business establishments requesting tax refund.

10. Taxpayers eligible for VAT refund that have the input VAT amount fully satisfying the conditions for tax refund as specified in this Article, and comply with the provisions on tax declaration in the law on tax administration, shall formulate VAT refund dossiers for VAT refund cases, and send them to tax offices competent to receive the dossiers.

Tax offices shall classify VAT refund dossiers to see which are eligible for tax refund first, or inspection before tax refund, and process VAT refund dossiers in accordance with the law on tax administration.

11. The Government shall detail this Article.

Article 16. Invoices and documents

1. Goods and service purchase and sale must be accompanied by invoices and documents in accordance with law and the following regulations:

a/ Business establishments that apply the tax credit method shall use added-value invoices. In case VAT-liable goods or services are sold but added-value invoices do not indicate a VAT amount, the output VAT amount is equal to the payment price indicated in the invoice multiplied by the VAT rate, except the case specified in Clause 2 of this Article;

b/ Business establishments that apply the direct tax calculation method shall use sale invoices.

2. For stamps, tickets and cards being payment documents pre-printed with payment prices, those prices are inclusive of VAT.

Chapter IV

IMPLEMENTATION PROVISIONS

Article 17. To amend and supplement Clause 1, Article 3 of Law No. 04/2007/QH12 on Personal Income Tax, which has a number of articles amended and supplemented under Law No. 26/2012/QH13 and Law No. 71/2014/QH13

“1. Incomes from business activities, including:

a/ Incomes from goods production or trading or service provision activities;

b/ Incomes from independent professional activities of individuals possessing practice licenses or certificates in accordance with law.

Incomes from business activities specified in this Clause are exclusive of incomes of production and bussiness households and individuals earning turnover below the level specified in Clause 25, Article 5 of the Law on Value-Added Tax.”

Article 18. Effect

1. This Law takes effect on July 1, 2025, except the case specified in Clause 2 of this Article.

2. The provisions on turnover of production and business households and individuals not subject to tax as specified in Clause 25, Article 5 and Article 17 of this Law take effect on January 1, 2026.

3. Law No. 13/2008/QH12 on Value-Added Tax, which had a number of articles amended and supplemented under Law No. 31/2013/QH13, Law  No. 71/2014/QH13 and Law No. 106/2016/QH13, ceases to be effective on the effective date of this Law.

This Law was passed on November 26, 2024, by the 15^th National Assembly of the Socialist Republic of Vietnam at its 8^th session.-

Chairman of the National Assembly
TRAN THANH MAN