Law On Value-Added Tax 2024

LAW

ON VALUE-ADDED TAX

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

This Law prescribes goods and services subject to VAT, goods and services not subject to VAT, taxpayers, basis and methods for calculation, deduction and refund of value-added tax (VAT).

Article 2. VAT

VAT means tax imposed on added value of goods and services during the process from production, circulation and consumption.

Article 3. Goods and services subject to VAT

Goods and services used for production, business operation (hereinafter referred to as “business operation”) and consumption in Vietnam are subject to VAT, except for those specified in Article 5 of this Law.

Article 4. Taxpayers

1. Organizations, households, individuals that manufacture and/or sell goods and/or services subject to VAT (hereinafter referred to as “business establishments").

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

3. Organizations and individuals having business operation in Vietnam buying services (including services attached to goods) from overseas organizations without permanent establishments in Vietnam, from overseas individuals that are not residents of Vietnam (hereinafter referred to as “non-residents”), except for the cases specified in Clause 4 and Clause 5 of this Article; organizations having business operation in Vietnam buying goods and services serving petroleum exploration and extraction by overseas organizations without permanent establishments in Vietnam, or by overseas non-residents of Vietnam.

4. Foreign overseas without permanent establishments in Vietnam doing e-commerce business or digital platform-based business with organizations and individuals in Vietnam (hereinafter referred to as “foreign suppliers"); organizations managing foreign digital platforms that deduct and pay tax incurred by foreign suppliers on their behalf; business organizations in Vietnam that apply credit-invoice method to calculate VAT on services purchased from foreign suppliers without permanent establishments in Vietnam via e-commerce channels or digital platforms, deduct and pay tax incurred by foreign suppliers on their behalf.

5. Organizations managing e-commerce exchanges or digital platforms with payment feature that deduct, pay and declare deducted tax on behalf of household businesses and individual businesses on such commerce exchanges or digital platforms.

6. The Government shall elaborate Clauses 1, 4 and 5 of this Article; regulations on taxpayers in case the foreign supplier provides services for business organizations in Vietnam that apply the credit-invoice method mentioned in Clause 4 of this Article.

Article 5. Goods and services not subject to VAT

1. Products from plants, cultivated forests, husbandry, aquaculture, fishery that have not been processed into other products or have only undergone preliminary processing by the manufacturers or catchers when they are sold and imported.

2. Products of breeds prescribed by regulations of law on husbandry, propagation materials prescribed by regulations of law on farming.

3. Animal feeds prescribed by regulations of law on husbandry; aquatic feeds prescribed by regulations of law on aquaculture.

4. Salt products produced from seawater, natural rock salt, refined salt, iodized salt of which the primary constituent is sodium chloride (NaCl).

5. State-owned housing sold by the State to the current tenants.

6. Irrigation and drainage; land plowing and harrowing; dredging of intra-field canals and ditches serving agricultural production; harvesting services.

7. Transfer of land use rights (LUR).

8. Life insurance, health insurance, insurance for students, other insurances related to humans, insurance for animals, insurance for plants, other agricultural insurances; insurance for boats, ships, and other equipment necessary for fisheries; reinsurance; insurances for petroleum works and equipment, oil tankers with foreign nationalities hired by foreign subcontractors or petroleum contractors to operate within territorial seas of Vietnam and overlapping maritime zones that have been put under joint development agreements between Vietnam and countries whose coastlines are adjacent or opposite to each other.

9. The following finance, banking, securities trading and commerce services:

a) Credit extension services prescribed by regulations of law on credit institutions and fees specified in lending agreements between the Government of Vietnam and foreign lenders;

b) Lending services provided by taxpayers that are not credit institutions;

c) Securities trading services including securities brokerage, proprietary trading of securities, securities issuance guarantee; securities investment consulting; securities investment fund management; securities investment portfolio management prescribed by securities laws;

d) Capital transfer including: transfer of part or all of capital invested in another business organization (regardless of establishment of a new juridical person), transfer of securities, transfer of the right to contribute capital and other forms of capital transfer prescribed by law, including selling an enterprise to another enterprise for business operation where the buying enterprise inherits all rights and obligations of the enterprise being sold as prescribed by law. Capital transfer prescribed in this Point does not include transfer of investment projects and sale of assets;

dd) Sale of debts including sale of amounts payable and amounts receivable;

e) Trading in foreign currencies;

g) Derivatives prescribed by regulations of law on credit institutions, securities and commerce, including: interest rate swap, forward contracts, futures contracts (futures); call options, put options and other derivatives;

h) Sale of collateral for debts of organizations 100% of charter capital of which is held by the State (hereinafter referred to as “wholly state-owned organizations”) which are established by the Government to settle bad debts of Vietnamese credit institutions.

10. The following healthcare and veterinary services:

a) Healthcare services include: medical examination, treatment and disease prevention for humans; birth control services; nursing and rehabilitation services for patients; care for elderly and disabled people; patient transport, rent of hospital rooms and hospital beds at health facilities; testing and imaging; blood and blood products for patients.

Care for elderly and disabled people include medical care, nitration and organization of culture, sport, entertainment activities, physical therapy, and rehabilitation for elderly and disabled people.

In case the medical service package prescribed by the Ministry of Health includes medicines, the revenue from medicines in such service package is also NOT subject to VAT;

b) Veterinary medicine services include: medical examination, treatment and disease prevention for domesticated animals.

11. Funeral services.

12. Renovation, repair and construction of historical – cultural remains, scenic beauties, cultural, artistic works, public service works, infrastructure and housing for social policy beneficiaries which are funded with the people’s contributions or humanitarian aid (making up at least 50% of the total investment in the work).

13. Teaching and vocational training prescribed by regulations of law on education and vocational education.

14. Radio and television broadcasting funded by state budget.

15. Publishing, importing, issuing newspapers, magazines, academic journals, political books, text books, law books, science – technology books, books serving diplomatic communication, books in ethnic languages, printing propaganda pictures and banners, including audio, video tapes, discs, or computer files; money, money printing.

16. Mass transit by bus, electric train, inland waterway vehicle.

17. Machinery, equipment, parts and supplies which cannot be manufactured in Vietnam and have 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 in Vietnam and have to be imported for prospecting, exploring and developing oil and gas fields; aircraft, helicopters, gliders, drilling platforms and ships which cannot be manufactured in Vietnam and have to be imported for the formation of fixed assets of enterprises or have to be hired from foreign parties for business operation or for lease.

18. Defense and security products on the lists promulgated by the Minister of National Defense and the Minister of Public Security; goods and services imported to serve defense and security industry on the lists promulgated by the Prime Minister.

19. Imports in case of humanitarian aid or grant aid. Goods and services sold to foreign organizations or individuals or international organizations for use as humanitarian aid or grant aid for Vietnam.

20. Goods undergoing merchanting trade or transit through Vietnam’s territory; goods temporarily imported for re-export; goods temporarily exported for re-import; raw materials imported for the production or processing of exports under contracts with foreign parties; goods and services traded between foreign countries and free trade zones and between free trade zones.

Goods imported under a finance lease contract by the finance company (the lessor) and directly transported to a free trade zone for use by a lessee therein.

21. Technology transfer under the Law on Technology Transfer; transfer of intellectual property rights under the Law on Intellectual Property; software products and software serves prescribed by law.

22. Gold imported in the form of bars or ingots which have not yet been processed into fine-art articles, jewelries or other products during import.

23. Exports that are raw natural resources or minerals that have not been processed into other products; exports that are raw natural resources or minerals that have been processed into other products on the list of raw natural resources and minerals restricted from export promulgated by the Government of Vietnam..

24. Artificial organs for humans, including those for long-term transplantation; crutches, wheelchairs and other tools used exclusively for the disabled.

25. Goods and services manufactured or sold by business households and individuals that earn annual revenue of at least 200 million VND; assets sold by organizations and individuals that do not do business and are not VAT payers; goods in national reserves sold by national reserves agencies; fees and charges prescribed by regulations of law on fees and charges.

26. Imports in the following cases:

a) Gifts for state agencies, political organizations, socio-political organizations, socio-political-professional organizations, social organizations, socio-professional organizations or peoples armed forces units within duty-free allowances according to regulations of law on export and import duties;

b) Donations and gifts within import duty exemption quota according to regulations of law on export and import duties given by foreign organizations and individuals to Vietnamese individuals; personal belongings of foreign organizations and individuals within diplomatic immunity quotas and movable assets within import duty exemption quota according to regulations of law on export and import duties;

c) Goods within duty-free luggage quotas according to regulations of law on export and import duties;

d) Goods imported as donations for recovery from natural disasters, epidemics or wars as per regulations of the Government;

dd) Goods traded or exchanged across the border to serve production or consumption by border residents on the List of goods traded or exchanged by border residents as prescribed by law and within the import duty exemption quota according to regulations of law on export and import duties;

e) Relics, antiques, national treasures prescribed by regulations of law on cultural heritage imported by competent authorities.

27. Establishments selling goods and services not subject to VAT specified in this Article are not entitled to input VAT deduction and refund, except the cases eligible for 0% VAT specified in Clause 1 Article 9 of this Law.

28. The Government shall elaborate this Article. The Minister of Finance shall prescribe documentation and procedures for identification of goods and services not subject to VAT prescribed in this Article.

Chapter II

TAX BASES AND TAX CALCULATION METHODS

Article 6. Tax bases

The bases for VAT calculation include taxable price and tax rate.

Article 7. Taxable prices

1. Taxable prices are specified below:

Taxable prices of goods and services are VAT-exclusive prices; taxable prices of goods and services subject to excise duty are the prices inclusive of excise duty and exclusive of VAT; taxable prices of goods subject to environmental protection tax are prices inclusive of environmental protection tax and exclusive of VAT; taxable prices of goods subject to excise duty and environmental protection tax are prices inclusive of excise duty and environmental protection tax and exclusive of VAT;

b) Taxable prices of imports are dutiable values (values on which import duty is charged) as prescribed by regulations of law on export and import duties plus (+) import duty plus (+) extra import duties as prescribed by law (if any), plus (+) excise duty (if any) plus (+) environment protection tax (if any);

c) Taxable prices of goods and services used for barter, internal consumption or donation are the prices for calculating VAT on goods and services of the same or equivalent kinds at the time of barter, consumption or donation.

VAT on promotional goods and services prescribed by regulations of law on commerce shall be 0 (zero);

d) Taxable prices for lease of assets are the rents exclusive of VAT.

If the rent is paid in instalments or paid in advance for a certain period of time, the taxable price is the instalment or the advanced payment exclusive of VAT;

dd) Taxable prices of goods sold by installment or deferred payment are the one-off selling prices of such goods, exclusive of value-added tax and the instalment or deferral interest;

e) Taxable prices for goods processing are the payment for processing exclusive of VAT;

g) Taxable prices for construction and installation activities are the value of the completed and transferred work, item or task, exclusive of VAT. If the value of the construction or installation contract does not cover building 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, taxable prices are selling prices for real estate exclusive of VAT, excluding the land levies or land rents payable to state budget (deductible land prices). The Government shall provide for determination of deductible land prices in accordance with land laws;

i) For commission-based agent activities and brokerage of goods and services, taxable prices are the commission on these activities exclusive of VAT;

k) If the amount payable on the invoice for goods and services is inclusive of VAT, the taxable price shall be calculated as follows:

VAT-exclusive price = Amount payable / (1 + tax rate on the goods/services (%))

l) For services including casino business, video games of chance and betting, taxable prices are revenues from these activities minus (-) the amounts exchanged and returned to players and the prizes given to players (if any), inclusive of excise duty and exclusive of VAT;

m) For business operations including: electricity generation by Vietnam Electricity (EVN); transport, material handling; tourism services; pawnshop business; books subject to VAT sold at cover prices; printing; remuneration- or commission-based agent services including claim assessment, claim validation, claiming indemnities from third parties, taxable prices are selling prices exclusive of VAT. The Government shall prescribe taxable prices for business operations mentioned in this Point.

2. Taxable prices of goods and services specified in Clause 1 of this Article include surcharges and extra fees to which business establishments are entitled.

3. The Government shall elaborate this Article.

Article 8. Time for determination of VAT

1. Time for determination of VAT:

a) For goods, it is the time of transfer of the right to own or the right to use the goods to the buyer, or the time of issuance of the invoice, regardless of whether payment is collected;

b) For services, it is the time of completion of service provision or the time of issuance of the service invoice, regardless of whether payment is collected.

2. The time for determination of VAT on the following goods and services shall be prescribed by the Government:

a) Exports and imports;

b) Telecommunications services;

c) Insurance business services

d) Electricity supply; electricity generation; clean water production;

dd) Real estate business;

e) Construction, installation and petroleum operations.

Article 9. VAT rates

1. 0% VAT shall apply to the following goods and services:

a) Exports including: goods from Vietnam sold to overseas organizations and individuals and consumed outside of Vietnam; goods from the domestic market of Vietnam being sold to organizations in free trade zones and consumed within free trade zones to serve export manufacturing; goods sold within airside zones of airports for individuals (foreigners or Vietnamese people) who have completed exit procedures; goods sold at duty-free stores;

b) Export services including: services directly provided for overseas organizations and individuals and used outside of Vietnam; services directly provided for organizations in free trade zones and used within free trade zones to serve export manufacturing;

c) Other goods and services for export including: international transport, rental of vehicles for use outside of Vietnam’s territory; aviation services and maritime services provided directly or via agents for international transport; construction and installation of works in foreign countries or free trade zones; digital content products provided for foreign parties with documentary evidence that they are used outside of Vietnam as per regulations of the Government; spare parts for repair and maintenance of vehicles, machinery and equipment for foreign parties and consumption outside of Vietnam; processed goods for export as per regulations of law; goods and services not subject to VAT upon export, except for the cases in which 0% VAT applies specified in Point d of this Clause;

d) 0% VAT shall not apply in the following cases: technology transfer, transfer of intellectual property rights to abroad; issuing reinsurance policies in foreign countries; credit extension services; capital transfer; derivatives; postal and telecommunications services; exports specified in Clause 23 Article 5 of this Law; tobacco and alcohol that are imported and then exported; oil and gas purchased in Vietnam and sold to business establishments in free trade zones; automobiles sold to organizations and individuals in free trade zones.

2. 5% VAT shall apply to the following goods and services:

a) Clean water for production and daily life, excluding bottled water and other beverages;

b) Fertilizers; ores for fertilizer production, plant protection chemicals and animal growth stimulators as prescribed by law;

c) Services including digging, embanking and dredging canals, ditches, ponds and lakes for agricultural production; growing, tending, and preventing pests and insects for plants; preparing, processing and preservation of agricultural products;

d) Products from plants, cultivated forests (except timber and bamboo sprouts), husbandry, aquaculture, fishery that have not been processed into other products or have only undergone preliminary processing, except the products specified in Clause 1 Article 5 of this Law;

dd) Rubber latex in the form of crepe, sheets, rubber or nuggets; nets, ropes and fibers for making fishing-nets;

e) Products made of jute, rush, bamboo, leaf, straw, coconut husks and shells, hyacinth and other handicrafts made of agricultural raw materials; preliminarily processed cotton; carded, combed fibers; paper for newspaper printing;

g) Fishing vessels at sea; specialized machinery and equipment for agricultural production as per regulations of the Government;

h) Medical devices prescribed by regulations of law on management of medical devices; preventive and curative medicines; active pharmaceutical ingredients and herbal ingredients that are materials for production of curative and preventive medicines;

i) Teaching and learning equipment, including: models, pictures, boards, chalks, rulers, compasses;

k) Traditional art performances;

l) Children toys; books except for those specified in Clause 15 Article 5 of this Law;

m) Science and technology services prescribed by the Law on Science and Technology;

n) Sale, lease, and lease purchase of social housing according to the Law on Housing.

3. 10% VAT shall apply to the goods and services that are not mentioned in Clause 1 and Clause 2 of this Article, including services provided by foreign providers without permanent establishments in Vietnam for organizations and individuals in Vietnam via electronic commerce channels and digital platforms.

4. A business establishment sells goods or services with different VAT rates (including goods and services not subject to VAT) shall declare separate VAT rate for each type of goods and services; If the business establishment cannot determine separate VAT rates, the business establishment shall calculate and pay VAT at the highest VAT rate on its goods or services.

5. Products from plants, cultivated forests, husbandry, aquaculture, fishery that have not been processed into other products or have only undergone preliminary processing and are used as animal feeds or herbal ingredients shall apply the VAT rate for products from plants, cultivated forests, husbandry, aquaculture.

When scraps, byproducts, wastes recovered for recycling or reuse are sold, VAT rates on the products being sold shall apply.

6. The Government shall elaborate Clause 1 and Clause 2 of this Article. The Minister of Finance shall prescribe documentation and procedures for application of 0% VAT mentioned in Clause 1 of this Article.

Article 10. VAT calculation methods

VAT calculation methods include credit-invoice method and direct method.

Article 11. Credit-invoice method

1. Credit-invoice method:

a) VAT payable equals (=) output VAT minus (-) deductible input VAT;

b) Output VAT is the amount of VAT on sold goods and services written on the VAT invoices.

VAT on sold goods and services written on the VAT invoice equals (=) the taxable prices of the goods and services multiplied by (x) VAT rate on such goods and services.

If the amount payable written on the invoice is inclusive of VAT, the output VAT shall equal (=) the amount payable minus (-) taxable price determined according to Point k Clause 1 Article 7 of this Law;

c) Deductible input VAT equals (=) the total VAT written on the invoice for purchase of goods and services or document on payment of VAT on imports or VAT payment document in case of purchase of services specified in Clause 3 and Clause 4 Article 4 of this Law and must satisfy the requirements specified in Article 14 of this Law.

2. The credit-invoice method applies to the business establishments that fully comply with regulations on accounting and invoicing, including:

a) Business establishments that earn annual revenue of at least 01 billion VND from sale of goods and services goods sale, except household businesses and individual businesses;

b) Business establishments that voluntarily apply the credit-invoice method, except household businesses and individual businesses;

c) Foreign organizations and individuals providing goods and services serving petroleum exploration and extraction that pay VAT using the credit-invoice method and have VAT declared, deducted and paid on their behalf by Vietnamese parties.

3. The Government shall elaborate this Article.

Article 12. Direct method

1. Added value-based VAT equals (=) added value multiplied by (x) VAT rate on trade and crafting of gold, silver, and gemstones.

Added value of trade and crafting of gold/silver/gemstones equals (=) the selling price of gold, silver, gemstones minus (-) the buying price of gold/silver/gemstones.

A business establishment involved in trade, crafting of gold, silver or gemstones shall keep separate accounting records on these activities separately to pay VAT directly on added value.

2. Revenue-based VAT equals (=) VAT rate (%) multiplied by (x) revenue. Application of revenue-based VAT:

a) Revenue-based VAT shall apply to:

a1) Enterprises, cooperatives and cooperative unions with an annual revenue of less than 01 billion VND, except for those that voluntarily apply the credit-invoice method prescribed in Clause 2 Article 11 of this Law;

a2) Household businesses and individual businesses, except for the cases specified in Clause 3 of this Article;

a3) Foreign organizations without permanent establishments in Vietnam, overseas non-resident individuals that have revenue in Vietnam but have not fully complied with accounting and invoicing regulations, except foreign suppliers prescribed in Clause 4 Article 4 of this Law;

a4) Other organizations, except for those applying the credit-invoice method prescribed in Clause 2 Article 11 of this Law;

b) VAT rates:

b1) Goods supply and distribution: 1%;

b2) Services and construction without building materials: 5%;

b3) Production, transport, services associated with goods, construction that covers building materials: 3%;

b4) Other business operations: 2%.”

c) Revenues on which VAT is calculated are the total revenue from sale of goods and services written on the sale invoices, surcharges and extra fees to which the business establishments are entitled.

3. Household businesses and individual businesses that do not or not fully comply with accounting and invoicing regulations shall pay fixed VAT in accordance with the Law on Tax Administration.

4. The Government shall elaborate Clause 1 of this Article. The Minister of Finance shall specify the groups of goods and services applying the VAT rates specified in Point b Clause 2 of this Article.

Chapter III

VAT DEDUCTION AND REFUND

Article 13. Prohibited acts in VAT deduction and refund

1. Buying, giving, selling invoices, advertising, brokering sales of invoices.

2. Creation of sales and purchase of goods, provision of services that are not real or trading against the law.

3. Issuance of invoices for sale of goods and services during business suspension, except issuance of invoices to customers to execute contracts that are concluded before the date of notification of business suspension.

4. Use of illegal invoices and documents; illegal use of invoices and documents according to regulations of the Government.

5. Failure to transfer electronic invoice data to tax authorities as per regulations.

6. Falsification, misuse, illegal access, destruction of invoicing and documentation information systems.

7. Giving, taking, brokering bribes or committing other invoice-related acts in order to be eligible for VAT deduction, VAT refund, or to appropriate, evade VAT.

8. Aiding, harboring; arranging collusion between tax officials, tax authorities and business establishments, importers, between business establishments, importers in using illegal invoices and documents, or illegal use of invoices and documents in order to be eligible for VAT deduction, VAT refund, or to appropriate, evade VAT.

Article 14. Deduction of input VAT

1. Business establishments that apply the credit-invoice method may deduct input VAT as follows:

a) Input VAT on goods and services used for the production and sale of goods and services subject to VAT is fully deductible, including uncompensated input VAT on goods and services subject to VAT that are damaged or lost during transport due to their physical or chemical properties;

b) In case certain goods/services are used for the production/trading of both goods/services subject to VAT and goods/services not subject to VAT, only input VAT on the goods/services used for the production/trading of the goods/services subject to VAT is deductible. The business establishment shall separate deductible input VAT and non-deductible input VAT on accounting records; if deductible input VAT and non-deductible input VAT cannot be separately recorded, input VAT shall be deducted according to ratio (%) of revenue from goods/services subject to VAT to total revenue from goods/services sold;

c) Input VAT on goods and services sold to organizations and individuals funded humanitarian aid or grant aid is fully deductible;

d) Input VAT on goods and services used for petroleum exploration and extraction is fully deductible;

dd) Input VAT incurred in a month/quarter shall be declared and deducted during calculation of tax payable of that month/quarter. Input VAT that remains after deduction (hereinafter referred to as “residual input VAT”) at the end of a month/quarter will continue to be deducted in the next month/quarter.

If a business establishment finds that input VAT was declared or deducted incorrectly, it may be rectified before the tax authority or a competent authority issues a decision on tax audit or tax inspection as follows:

In case of incorrect declaration of input VAT of a month/quarter that leads to an increase in VAT payable or a decrease in refundable VAT, the taxpayer shall make a supplementary declaration in the month/quarter in which the incorrectly declared VAT is incurred; the taxpayer shall pay the increase in VAT or return the excess VAT refund and pay a late payment interest (if any) to state budget.

In case of incorrect declaration of input VAT of a month/quarter that leads to a decrease in VAT payable or only an increase or decrease in refundable VAT being carried forward to the next month/quarter, the taxpayer shall make a declaration in the month/quarter in which the error is found;

e) Business establishments may aggregate non-deductible input VAT with expenses to calculated corporate income tax, or with historical costs of fixed assets according to regulations of law on corporate income tax, except VAT of goods and services purchased without documentary evidence of cashless payment as per regulations of the Government;

g) The Government shall promulgate regulations on deduction of input VAT on goods and services forming fixed asset serving employees; capital contribution by property; goods and services purchased under authorization for with invoices bear the authorized party’s name; fixed assets that are automobiles for the transport of up to 09 people; establishments having closed-loop manufacturing process and centralized accounting.

2. Requirements for deduction of input VAT deduction:

a) There are VAT invoices for purchase of goods and services or documentary evidence of VAT payment during import or documentary evidence of VAT payment on behalf of foreign parties according to Clause 3 and Clause 4 Article 4 of this Law. The Minister of Finance shall specify documentary evidence of VAT payment on behalf of foreign parties;

b) There is documentary evidence of cashless payment for goods and services purchased, except in special cases specified by the Government;

c) For exported goods and services, in addition to the requirements specified in Point a and Point b of this Clause, there must also be a contract with the foreign party for sale, processing of goods, provision of services; invoices for sale of goods, provision of services; documentary evidence of cashless payment; customs declarations for exports; packing list, bill of lading, goods insurance documents (if any). The Government shall specify requirements for VAT deduction in case of export of goods via overseas e-commerce platforms and some other special cases.

3. Business establishments that fail to comply with regulations on VAT deduction in Clause 1 and Clause 2 of this Article, invoices and documents derived from prohibited acts specified in this Law shall not be eligible for VAT deduction.

4. The Government shall elaborate this Article.

Article 15. VAT refund

1. Refund of VAT on exports:

a) In a month/quarter, if residual input VAT credit on exported goods and services of a business establishment is 300 million VND or more, it will be refunded by month/quarter, unless the imports are then exported to another country;

b) In a month/quarter, if a business establishment has both goods/services for export and goods/services for domestic sale, input VAT for production/sale of the goods/services for export must be separately recorded; Otherwise, input VAT on goods/services for export will be determined according to ratio of revenue on exported goods/services to total revenue from goods/services subject to VAT of the tax refund period. Tax refund period is the period of time from the tax period having the residual input VAT to the tax period in which VAT refund is claimed.

After input VAT on exported goods/services (including separately recorded input VAT and input VAT calculated according to the aforementioned ratio) is offset against VAT payable on goods/services sold domestically, if the residual input VAT is 300 million VND or more, the business establishment may claim a VAT refund for the exported goods/services. The residual input VAT is refundable if it does not exceed 10% of the revenue from the exported goods/services of the tax refund period. If residual input VAT exceeds 10% of the revenue from the exported goods/services in a tax refund period and is therefore not refundable, it will be deducted in the next tax period in order to determine refundable VAT on the exported goods/services of the next tax refund period.

2. Refund of VAT on investments:

a) Business establishments that have registered for application of the credit-invoice method and have investment projects (new investment project or expansion investment projects) as per investment laws (including investment projects that are divided into multiple stages or items, except investment projects that do not form fixed assets of enterprises) during the investment stage or petroleum exploration and extraction projects during the investment stage, have incurred input VAT during the investment stage and have not claimed VAT refunds may deduct such input VAT from VAT payable from their ongoing business operations (if any). If the residual input VAT on the investment projects is 300 million VND or more, it will be refunded.

If the investment project has been completed (including investment projects that are divided into multiple stages or items with completed stages or items) but the business establishment has not claimed refund of VAT incurred in the investment stage (on the completed stages or items), the business establishment shall submit the VAT refund claim within 01 year from the completion date of the investment project, stage or item.

The completion date of the investment project, stage or item is the date of revenue generation of the investment project, stage or item. This revenue does not include revenue generated during trial, revenue from financial operations, liquidation of raw materials of the investment project;

b) Instead of receiving VAT refund, a business establishment will have the residual VAT on the investment project carried forward to the next period in the following cases:

b1) The investment project does not have adequate charter capital as registered by the time of submission of the VAT refund claim; engages in conditional business lines while the corresponding conditions have not been fully satisfied as per investment laws or the fulfillment of these conditions are not maintained throughout its operation, except during the investment stage where, according to investment laws or relevant laws, the license for operation in conditional business lines is not yet required, or the investment project is not required to have the license for operation in conditional business lines according to investment laws or relevant laws;

b2) It is a natural resource or mineral extraction project (excluding petroleum exploration and extraction projects mentioned in Point a of this Clause) or investment project for manufacture of products being natural resources or minerals that have been processed into other products as prescribed in Clause 23 Article 5 of this Law.

3. A business establishment that only manufactures products or provides services subject to 5% VAT and has a residual input VAT of 300 million VND or more for at least 12 consecutive months or 04 consecutive quarters will be eligible for VAT refund; If the business establishment manufactures products or provides services subject to different VAT rates, VAT shall be refunded at a ratio prescribed by the Government.

4. Business establishments paying VAT using the credit-invoice method will be eligible for VAT refund upon their dissolution or bankruptcy if they have overpaid VAT or residual input VAT.

IN case an artel applying the credit-invoice method is converted into a cooperative, the cooperative will inherit all overpaid VAT or residual input VAT of the artel, which can be used for deduction or claiming refund as per regulations.

5. Foreigners and Vietnamese people residing abroad who have passports or international travel documents papers shall receive refunds of VAT on goods purchased in Vietnam and brought abroad.

The Government shall specify documentation, procedures, refundable tax and refunding method for the cases specified in this Clause.

6. Refund of VAT for programs/projects funded by Official Development Assistance (ODA) grants, grant aid or humanitarian aid:

a) The owner of the program/project or the main contractor, the organization appointed by the foreign donor to manage the program/project funded by ODA grants will receive a refund of VAT on the goods and services purchased in Vietnam to serve the program/project;

b) The organizations in Vietnam that use grant aid or humanitarian aid provided by foreign organizations and individuals to purchases goods and services to serve the program/project funded by such grant aid or humanitarian aid will receive a refund of VAT paid on such goods and services.

7. People eligible for diplomatic immunity who purchases goods and services in Vietnam for personal consumption will receive a refund of the VAT written on the VAT invoices or payment documents having the VAT-inclusive prices.

8. Business establishments having VAT refund decisions issued by competent authorities as prescribed by law, and other cases eligible for VAT refund under treaties to which the Socialist Republic of Vietnam is a signatory.

9. A business establishment must satisfy the following requirements to receive VAT refund in the cases specified in this Article:

a) The business establishment is eligible for VAT refunds according to regulations of Clauses 1, 2, 3 and 4 of this Article, pays VAT using the credit-invoice method, prepares and retains accounting books and accounting records in accordance with accounting laws; has checking accounts at banks under its taxpayer identification number (TIN);

b) Regulations on deduction of input VAT in Clause 2 Article 14 are complied with and it is not the case specified in Clause 3 Article 14 of this Law;

c) The seller has declared and paid VAT under the invoices issued to the claiming business establishment.

10. Taxpayers that are eligible for VAT refund, have input VAT satisfying the VAT refund requirements specified in this Article and fully comply with regulations on VAT declaration shall prepare VAT refund claims for individual cases and send them to competent tax authorities.

Tax authorities shall categorize VAT refund claims as eligible for refund before inspection or subject to inspection before refund, and processes these VAT refund claims in accordance with regulations of law on tax administration.

11. The Government shall elaborate this Article.

Article 16. Invoices and documents

1. Goods and service purchase and sale must be accompanied by invoices and documents according to the law and the following regulations:

a) Business establishments that apply the credit-invoice method shall use VAT invoices. If goods and services subject to VAT are sold but the VAT invoice does not specify the VAT amount, output VAT shall be the amount payable written on the invoice multiplied by (x) the VAT rate, except in the case specified in Clause 2 of this Article;

b) Business establishments that apply the direct method shall use sale invoices.

2. Prices pre-printed on stamps, tickets and cards that are payment documents are inclusive of VAT.

Chapter IV

IMPLEMENTATION CLAUSES

Article 17. Amendments to Clause 1 Article 3 of the Law on Personal Income Tax No. 04/2007/QH12, which is amended by Law No. 26/2012/QH13 and Law No. 71/2014/QH13

“1. Income from business, including:

a) Income from manufacture and sale of goods and services;

b) Income from independent practice of individuals having licenses or practicing certificates as prescribed by law.

Income from business mentioned in this Clause does not include income of household businesses and individual businesses whose revenues are below the level specified in Clause 25 Article 5 of the Law on Value-added Tax.”

Article 18. Effect

1. This Law comes into force from July 01, 2025, except in the cases specified in Clause 2 of this Article.

2. Regulations on revenues of household businesses and individual businesses not subject to VAT at Clause 25 Article 5 of this Law and Article 17 of this Law come into force from January 01, 2026.

3. The Law on Value-added Tax No. 13/2008/QH12, which was amended by Law No. 31/2013/QH13, Law No. 71/2014/QH13 and Law No. 106/2016/QH13, is annulled from the effective date of this Law.

This Law was ratified by the 15th National Assembly of the Socialist Republic of Vietnam during its 8thsession on November 26, 2024.

PRESIDENT OF THE NATIONAL ASSEMBLY

Tran Thanh Man