Vietnam has implemented significant tax and accounting reforms to address previously unresolved concerns, thereby incentivizing further investment and doing business in Vietnam. This Article outlines changes in Law No. 149/2025/QH15 (called the VAT Law 2025) effective from 1 January 2026.
There are 3 key changes under the VAT Law 2025 including:
1.Items not required to declare and pay VAT
Businesses that purchase products from cultivated crops, planted forests, livestock farming, aquaculture, or wild-caught fisheries that have not been processed into other products, or have only undergone simple preliminary processing, and sell them to other businesses, are not required to declare, calculate, and pay VAT.
2 New annual revenue threshold for individual and household businesses
Vietnam’s amended VAT Law regulates the annual revenue threshold for business individuals and households exempt from VAT from VND 200 million to VND 500 million.
3. Regulations on VAT refunds
Under the VAT Law 2024, an additional condition for VAT refunds was introduced, requiring sellers to have fulfilled their VAT declaration and payment obligations for input invoices on which buyers seek a refund. This measure point imposes significant administrative burdens on businesses and the VAT Law 2025 abolishes this requirement.
Among 3 amendments above, the first and third ones can have impact on Foreign invested enterprises. To get the original and English translated the VAT Laws 2024 and 2025, just email to consulting@vietnammanual.com.