Newsletter

Law No. 56/2024/QH15 amending and supplementing the Law on Securities, Law on Accounting, Law on Independent Auditing, Law on State Bank, Law on Management and Use of Public Assets, Law on Tax Administration, Law on Personal Income Tax, Law on National Archives Reserves, Law on Handling of Administrative Violations

On 29 November 2024, the National Assembly passed the Law amending 9 Laws: Securities Law, Accounting Law, Tax Administration Law, Personal Income Tax Law, etc., effective from 1 January 2025, with some notable points as follows:

– Supplementing and specifying the concept of stock market manipulation; regulations on professional stock investors; responsibilities of organizations and individuals related to records and reporting documents related to securities and stock market activities; private offering of securities, etc.

– Simplify the content of documents but still ensure management requirements; support digital transformation activities; improve State management capacity in the field of accounting, protect legal rights and interests of accountants;

– Regulate those who are not allowed to register to practice auditing, are not allowed to continue practicing auditing; handle violations of the law on independent auditing, enhance the effectiveness and efficiency of State management activities on independent auditing, improve the quality of independent auditing; etc.

– Amending and supplementing regulations on tax refunds, enforcement of administrative decisions on tax management; tax declaration and calculation in e-commerce business activities, business based on digital platforms; application of information technology, modern techniques, etc.;

New points of Value Added Tax Law 48/2024/QH15

On 26 November 2024, the National Assembly passed the Law on Value Added Tax No. 48/2024/QH15, effective from 1 July 2025, with some notable changes as follows:

1. Additional provisions on taxpayers

– Supplementing provisions for foreign suppliers without a permanent establishment in Vietnam that conduct e-commerce business activities, business activities based on digital platforms with organizations and individuals in Vietnam (hereinafter referred to as foreign suppliers); organizations managing foreign digital platforms that deduct and pay tax obligations on behalf of foreign suppliers; business organizations in Vietnam that apply the value-added tax calculation method as the method of deducting tax on purchased services from foreign suppliers without a permanent establishment in Vietnam through e-commerce channels or digital platforms that deduct and pay tax obligations on behalf of foreign suppliers.

– Organizations managing e-commerce trading floors, managing digital platforms with payment functions that deduct, pay tax on behalf of, and declare the deducted tax amount for business households and individuals doing business on e-commerce floors and digital platforms.

2. Adjusting the subjects not subject to VAT

Article 5 of the Law on Value Added Tax 2024 adjusts the provisions on subjects not subject to VAT as follows:

– Reducing the number of groups of goods and services not subject to VAT as follows:

+ Fertilizers; specialized machinery and equipment for agricultural production; offshore fishing boats;

+ Depository securities; market organization services of stock exchanges or securities trading centers; other securities trading activities, etc.

– The annual revenue of households and individuals not subject to VAT increases from VND 100 million to VND 200 million;

– Exported products that are natural resources and exploited minerals that have been processed into other products are not subject to VAT and must be applied according to the List prescribed by the Government.

(Previously, export products were defined as goods processed from resources and minerals with a total value of resources and minerals plus energy costs accounting for 51% or more of the product cost, which are not subject to VAT.)

– Supplementing imported goods to support and sponsor natural disaster prevention, epidemics, and wars according to Government regulations are not subject to VAT.

– “Computer software” is replaced by “software products and software services as prescribed by law”

– Capital transfer does not include transfer of investment projects or sale of assets;

3. Amendment of the tax calculation price for imported goods

Article 7 of the Value Added Tax Law 2024 stipulates that the taxable price for imported goods is amended to be the import taxable value according to the provisions of the law on export tax, import tax plus import tax plus additional import tax as prescribed by law (if any), plus special consumption tax (if any) and plus environmental protection tax (if any).

(Previously, Article 7 of the Law on Value Added Tax 2008 stipulated that the taxable price for imported goods is the import price at the border gate plus import tax (if any), plus special consumption tax (if any) and plus environmental protection tax (if any). The import price at the border gate is determined according to the provisions on import taxable price)

4. Supplementing taxable prices for goods and services used for promotions

Article 7 of the Law on Value Added Tax 2024 supplements the provision: For goods and services used for promotions according to the provisions of the law on commerce, the taxable price is determined as zero (0).

5. Tax rate

Article 9 of the Law on Value Added Tax 2024 adjusts the tax rates of some goods and services as follows:

– Adding some subjects to apply the 0% tax rate:

+ International transportation

+ Goods sold in quarantine areas to individuals (foreigners or Vietnamese) who have completed exit procedures; goods sold at duty-free shops;

+ Export services including: Services for leasing means of transport used outside the territory of Vietnam; Services of the aviation and maritime industries provided directly or through agents for international transportation.

– Non-taxable products converted to 5% tax:

+ Fertilizers;

+ Fishing vessels in coastal areas.

– Non-taxable products converted to 10% tax: securities depository services.

– Products subject to 5% tax rate converted to 10%

+ Unprocessed forest products;

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

+ Specialized equipment and tools for teaching, research, scientific experiments

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

6. Changes in conditions for input VAT deduction

– Purchases of goods and services under VND 20 million must have non-cash payment documents.

– Supplementing some documents for input VAT deduction: According to Point c, Clause 2, Article 14 of the Law on Value Added Tax 2024, for exported goods and services, there must be a packing list, bill of lading, goods insurance documents (if any); except for some special cases as prescribed by the Government, input VAT can be deducted.

7. Supplementing the time for determining VAT for goods

In addition to the time for determining VAT for goods being the time of transfer of ownership or right to use, the time of invoice issuance is also added.

8. Tax refund

Article 15 of the Law on Value Added Tax 2024 adds the following cases of tax refund:

– Business establishments that only produce goods and provide services subject to a VAT rate of 5%, if the input VAT amount that has not been fully deducted is from VND 300 million or more after 12 months or 04 quarters, will be eligible for a VAT refund.

– Remove the provisions on VAT refund related to ownership transfer, business conversion, merger, consolidation, division, separation, etc.

Draft Decree regulating the policy of reducing VAT by 2%

On 3 December 2024, the Ministry of Finance issued Official Letter No. 13145/BTC-CST as follows:

On November 30, 2024, the National Assembly passed Decree No. 174/2024/QH15 at the 8^th session of the 15^th National Assembly to continue reducing the VAT tax rate by 2% for groups of goods and services specified in Point a, Section 1.1, Clause 1, Article 3 of Resolution No. 43/2022/QH15 of the National Assembly on fiscal and monetary policies to support the socio-economic recovery and development program from 1 January 2025 to 30 June 2025.

To ensure that the Decree guiding the VAT reduction policy is issued and takes effect from 1 January 2025, the Ministry of Finance has been conducting research and drafted a Decree regulating the 2% VAT reduction policy in accordance with the Law on Promulgation of Legal Documents.