SOME NEW POINTS OF THE VAT 2024

SOME NEW POINTS OF THE VAT 2024

The 2024 Value-Added Tax (VAT) Law, effective from July 1, 2025, includes provisions that build upon the current law, with new amendments primarily addressing taxpayers, VAT-exempt goods and services, taxable prices, tax rates, input VAT deductions, and more. Below are some notable updates from the 2024 VAT Law:

1. Tax Rate

a. Goods and services not subject to VAT

The annual revenue threshold for business households and individuals has been increased from 100 million VND to 200 million VND (effective from January 1, 2026).

b. Goods and services subject to a 5% tax rate

Two goods and services that were previously not subject to VAT are now subject to a 5% tax rate:

- Fertilizers.

- Fishing vessels at sea.

c. Goods and services subject to a 10% tax rate

Goods and services previously subject to a 5% tax rate are now subject to a 10% tax rate:

- Unprocessed forest products.

- Sugar; by-products in sugar production, including molasses, bagasse, and sludge.

- Specialized teaching and research equipment and tools for scientific experiments.

- Cultural, exhibition, physical education, and sports activities; performing arts, film production; import, distribution, and screening of films.

2. Input VAT Deduction

- Amendments have been made regarding cases where 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.
• 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.

- The limit of 20 million VND for transactions involving non-cash payments for purchased goods and services has been removed. Therefore, all goods and services purchased must have supporting documents for non-cash payments, except in specific cases as stipulated by the government.

3. VAT Refund

- A new regulation on VAT refunds have been introduced for businesses that only produce goods or provide services subject to a 5% VAT rate and has a residual input VAT of 300 million VND or more for at least 12 consecutive months or 04 consecutive quarters.

- There is a new regulation that goods imported and then exported to another country are not eligible for VAT refunds.

- Addition regulation on VAT refunds for expansion investment projects, investment projects that are divided into multiple stages.