The 2024 VAT Law – No. 48/2024/QH15 was officially passed by the National Assembly on November 26, 2024, and will take effect from July 1, 2025.
How does this new VAT Law compare to the current VAT Law No. 13/2008/QH12? What should businesses and individual entrepreneurs do to stay ahead of the changes?
Let’s compare the details with AACC so you’re not caught off guard—but rather positioned to optimize your tax strategy for business success.
1.List of Goods & Services Exempt from VAT
Old Law:
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Certain items such as fertilizers, specialized agricultural machinery, and offshore fishing vessels were exempt from VAT.
New Law:
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These goods will now be subject to a 5% VAT rate.
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Purpose: Ensuring fairness between domestic and imported products, encouraging value-added production.
Note: Agricultural businesses must update pricing, contracts, and profitability benchmarks accordingly.
2.Revenue Threshold for VAT Obligations for Business Households & Individuals
Old Law:
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Business households with annual revenue above 100 million VND were required to pay VAT.
New Law:
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Threshold raised to 200 million VND/year (effective January 1, 2026).
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Objective: Supporting small traders and household businesses by reducing tax pressure and encouraging legal business operations.
Impact: Millions of small-scale businesses may temporarily halt VAT obligations, allowing them to focus on reinvestment.
3.Adjustment of VAT Rates for Certain Goods & Services
Old Law:
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Many items were exempt or taxed at 5%, including:
▪ Fertilizers
▪ Offshore fishing vessels
▪ Educational equipment
▪ Forestry products & sugarcane by-products
New Law:
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Updated VAT rates:
▪ Fertilizers, offshore fishing vessels → Increased to 5%
▪ Educational equipment, sugarcane by-products → Increased from 5% to 10%
Businesses should reassess pricing strategies and evaluate profit margin impacts accordingly.
4. VAT Rate of 0% – Expanded Scope
Old Law:
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0% VAT rate was unclear or not applied to:
▪ International transportation services
▪ Overseas construction projects
▪ Duty-free zones
New Law:
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0% VAT rate now applies to the above categories.
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Opportunities: More favorable conditions for export businesses, logistics companies, and cross-border consulting services.
Financial Benefits: Optimizing cash flow while reducing VAT burden on outbound transactions.
5. Input VAT Deduction – Stricter Regulations
Old Law:
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Transactions above 20 million VND required bank transfers to qualify for input VAT deduction.
New Law:
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Threshold lowered to just 5 million VND.
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Any VAT invoice over 5 million VND paid in cash will NOT be eligible for VAT deduction.
Warning: Businesses must review payment procedures carefully to avoid losing deduction rights!
6. VAT Refunds – Additional Benefits
LUẬT CŨ:Old Law:
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No clear provisions for VAT refunds on goods and services taxed at 5%.
LUẬT MỚI:New Law:
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Businesses can apply for VAT refunds if, after 12 consecutive months (or 4 quarters), their uncredited input VAT reaches 300 million VND or more.
Highly beneficial for businesses in manufacturing, food, consumer goods, and agriculture sectors.
SUMMARY – NOW IS THE TIME FOR BUSINESSES TO ACT
✔ The new VAT Law brings clearer, tighter regulations—but also opens significant tax optimization opportunities for those who prepare and adjust in time.
Immediate Actions for Businesses & Entrepreneurs:
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Review the list of goods and services currently being traded
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Update payment and invoicing procedures
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Adjust pricing strategies and contracts accordingly
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Develop a tax plan now to maximize profitability
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Consult tax experts to prevent errors
AACC – YOUR TRUSTED PARTNER FOR SMOOTH TAX TRANSITION
With a team of CPA experts, tax agents, and chief accountants boasting over 22 years of experience, AACC will:
🔹 Review financial records, contracts, and bookkeeping
🔹 Provide tailored tax strategy consulting for each industry
🔹 Support the adjustment of accounting systems to comply with the new law
🔹 Assist during tax audits and compliance reporting
📩Contact AACC today to not only ensure legal compliance but also stay ahead in financial and tax optimization trends for the modern era.
