Vietnam VAT law: Changes for businesses and individuals
The Vietnamese government has amended the value added tax (VAT) law. Individual businesses and households can benefit from these changes. The Ecovis experts explain the amendments, which came into effect on 1 January 2026.
Law no. 149/2025/QH15 contains several noteworthy amendments and supplements to Law No. 48/2024/QH15 on value added tax.
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“Please feel free to contact us if you have any questions regarding the changes to the Vietnamese VAT law.”
Trung Pham, Partner, ECOVIS AFA VIETNAM, Da Nang City, Vietnam
The most important changes
- Addition of a group of goods that are not subject to VAT declaration and payment but are still eligible for input VAT deduction
- Increase in the VAT-exempt revenue threshold to VND 500 million for households and individual businesses
- Removal of the regulation that buyers are only eligible for tax refunds after sellers have declared and paid taxes
- Removal of the regulations on lump-sum tax for households and individual businesses
Addition of a group of goods that are not subject to VAT declaration and payment but are still eligible for input VAT deduction
Point a, Clause 1, Article 1 of Law no. 149/2025/QH15 adds the following: “Products of crops, planted forests, livestock, aquaculture, and fisheries that have not been processed into other products or have only undergone basic processing, produced and sold by organisations and individuals themselves, and at the import stage. Enterprises, cooperatives, and cooperative unions that purchase unprocessed crops, planted forests, livestock, aquaculture, and fisheries that have only undergone basic processing and sell them to other enterprises, cooperatives, and cooperative unions are not required to declare or pay value added tax, but are entitled to deduct input value added tax.”
Under previous VAT law, agricultural products, planted forests, livestock, aquaculture, and harvested seafood that had not been processed into other products or had only undergone basic processing, produced and sold by organisations and individuals themselves, and at the import stage, were exempt from VAT.
Increase in the VAT-exempt revenue threshold to VND 500 million for households and individual businesses
Point b, Clause 1, Article 1 of the new law states that: “Goods and services of households and individuals engaged in production and business with annual revenue of VND 500 million or less (VND = Vietnamese dong, VND 100,000 is the equivalent of around USD 3.80); assets of organisations and individuals not engaged in business and not subject to value added tax sold; national reserve goods sold by the national reserve agency; fees and charges collected as prescribed by law on fees and charges.”
The previous threshold for VAT exemption was VND 200 million for households and individuals engaged in business.
Removal of the regulation that buyers are only eligible for tax refunds after sellers have declared and paid taxes
The new law repeals the provision which stipulated that the condition for tax refund was that the seller had declared and paid VAT in accordance with regulations for the output invoices issued to the enterprise requesting the refund. This simplifies the tax refund procedure and reduces the conditions related to the seller’s output tax obligations.
Removal of the regulations on lump-sum tax for households and individual businesses
The repeal of the lump-sum tax provision for households and individual businesses is consistent with the State’s policy of abolishing lump-sum tax, helping to ensure fairness and transparency in tax administration.
