Vietnam’s National Assembly passed the 2024 Law on Value-Added Tax (VAT) on 26 November 2024, which will come into effect on 1 July 2025.
This new legislation introduces several amendments. One of the changes is the increase in the tax-exempt revenue threshold for small businesses and individual entrepreneurs, which has been raised from VND 100 million (approximately USD 3,934) to VND 200 million (around USD 7,879) annually. This adjustment is expected to reduce the number of taxable entities by over 620,000 and decrease state budget revenues by approximately VND 2,630 billion (USD 103.6 million).
The government has also requested the authority to modify this threshold in response to socio-economic developments, ensuring that tax policies remain flexible and aligned with Vietnam’s economic growth.
In addition to this threshold adjustment, the new VAT law will impose a 5% VAT on fertilisers, which were previously exempt.
It will expand the definition of taxable entities to include foreign organisations and individuals providing services in Vietnam without a permanent establishment.
Moreover, the National Assembly has also mandated that the government issue a decree to regulate imported goods sold through e-commerce channels, effectively removing VAT exemptions on low-value imports valued at VND 1 million or less.
