Vietnam has approved amendments to its VAT Law to ease financial pressures on the agricultural sector, support domestic animal feed producers, and streamline the tax refund process by removing restrictive conditions that delayed refunds, with the changes aimed at improving competitiveness and post-disaster recovery.
Vietnam’s National Assembly has approved Law No. 149/2025/QH15 on 8 December 2025, amending and supplementing various provisions of the Law on Value Added Tax 2024 (VAT Law 2024).
Government officials proposed these changes to alleviate financial pressures on the agricultural sector and resolve persistent bottlenecks in the tax refund process following severe natural disasters. Key adjustments include allowing VAT input credits for agricultural products and removing restrictive conditions that previously delayed refunds for exporters.
The key amendments are:
Relieving the financial burden on agriculture
A major highlight of the proposal is a shift in how agricultural products, including forestry, livestock, and aquatic goods, are taxed during business-to-business (B2B) transactions. Under the new rules, these products would not be subject to VAT during the trading phase between enterprises or cooperatives, yet businesses would still be allowed to deduct the full cost of their input VAT.
Fair competition for domestic animal feed
The amendment also seeks to level the playing field for domestic animal feed producers. Currently, imported animal feed is not subject to tax, while domestic producers face a 5% input VAT that must be factored into their selling price, making local products more expensive. The government wants to harmonise these rules to ensure domestic production can compete fairly with imports, especially as the agricultural sector tries to recover from recent heavy storms and flooding.
Simplifying the tax refund process
One of the most significant measures proposed is the criterion for receiving tax refunds. The 2024 VAT Law previously required that a buyer could only receive a refund if the seller had already declared and paid their taxes. The new proposal suggests removing this requirement, shifting the focus to independent responsibility and utilising the Law on Tax Administration to monitor for fraud rather than penalising the buyer for the seller’s actions.
Increased VAT exemption threshold for individuals and households
The VAT Law 2024 has been amended to raise the VAT exemption threshold for households and individuals, increasing the annual revenue limit from VND 200 million to VND 500 million for supplies of goods and services.
VAT treatment of recovered production scrap
Recovered scraps and by-products from production are to be taxed according to their applicable category-specific VAT rates when used or sold.
Removal of the presumptive VAT method
The presumptive VAT method for non-compliant households and individuals has been abolished, requiring them to pay VAT based on actual revenue.
The amendments to the VAT Law took effect on 1 January 2026.
