Legal document newsletter week 16/12/2024
SOME NOTEWORTHY NEW POINTS IN THE LAW ON VALUE-ADDED TAX NO. 48/2024/QH15 OF THE NATIONAL ASSEMBLY
At the 8th session on November 26, 2024 of the 15th National Assembly of the Socialist Republic of Vietnam, the National Assembly passed the Law on Value-Added Tax No. 48/2024/QH15. The Law on Value Added Tax No. 48/2024/QH15 takes effect from July 1, 2025 (except for regulations on the turnover of non-taxable production and business households and individuals, which will take effect from January 1, 2026) and replaces the Law on Value Added Tax No. 13/2008/QH12, Law No. 31/2013/QH13, Law No. 71/2014/QH13 and Law No. 106/2016/QH13. Some new points worth noting in the Law on Value Added Tax No. 48/2024/QH15 are as follows:
Changes in conditions for input VAT deduction
- Change of non-cash payment threshold: all purchased goods and services must have non-cash payment vouchers, except for some special cases as prescribed by the Government (Previously: There are via-bank payment vouchers for purchased goods and services, except for goods and services purchased each time with a value of less than VND 20 million);
- Supplementing a number of documents eligible for input VAT deduction: for exported goods and services, packing slips, bills of lading, goods insurance documents (if any); except for some specific cases as prescribed by the Government, input VAT shall be deducted.
Adjustment of non-taxable objects
- Raising the threshold of non-taxable revenue to 200 million VND/year. Goods and services of business households and individuals with an annual turnover of VND 200 million or less are not subject to value-added tax (Previously: Goods and services of business households and individuals with an annual turnover of VND 100 million or less);
- Eliminate a number of subjects not subject to value-added tax according to current regulations, including: Fertilizers; special-use machinery and equipment for agricultural production; offshore fishing vessels; Securities depository; market organization services of the Stock Exchange or the Securities Trading Center; other securities trading activities…
- Adjustments related to export products being exploited natural resources and minerals that have been processed into other products not subject to VAT must be applied according to the list prescribed by the Government;
- Supplementing imported goods to support and finance the prevention and control of natural disasters, epidemic disasters and wars according to the Government’s regulations are not subject to value-added tax.
Adding a number of subjects subject to the 0% tax rate
- International transport;
- Construction and installation works abroad, in non-tariff zones;
- Goods sold in the quarantine area to individuals (foreigners or Vietnamese) who have gone through exit procedures; goods sold at duty-free shops;
- Export services include: Rental services of means of transport used outside the territory of Vietnam; The services of the aviation and maritime industry are supplied directly for international transportation or through agents.
Non-taxable subjects switch to 5% tax
- Fertilizer;
- Fishing vessels in the sea.
Subjects subject to the tax rate of 5% changed to 10%
- Unprocessed forest products;
- Sugar; by-products in sugar production, including sugar rust, bagasse and sludge;
- Specialized equipment and instruments for teaching, research and scientific experiments;
- Cultural, exhibition, physical training and sports activities; performing arts; film production; import, distribution and screening of films.
Supplementing the case of value-added tax refund
- Business establishments that only produce goods and provide services are subject to the VAT rate of 5% if they have an input VAT amount of VND 300 million or more that has not been fully deducted after 12 months or 04 quarters, they shall be entitled to a VAT refund.
Enforcement effect
This Law takes effect from July 1, 2025, except for the regulations on turnover of production and business households and individuals that are not subject to tax in Clause 25, Article 5 of this Law and Article 17 of this Law, which takes effect from January 1, 2026.