Vietnam 2026 VAT updates

Many of the provisions will directly influence supply chains, import–export planning, and cost structures across multiple sectors.

Integration of VAT provisions and modernisation of administration

A key feature of the revised VAT law and its accompanying decree is the consolidation of rules that were previously scattered across official letters, bringing greater predictability to tax assessments. Customs officials emphasise that codification should reduce ambiguity for businesses and facilitate a more automated exchange of data when the law came into effect on 1 July 2025.

Digital enablement is a central component. New guidance under Circular No. 51/2025/TT-BTC introduces requirements for electronic interactions with customs, with technology (including AI) being deployed to identify system bottlenecks and streamline processing. Authorities underline that reducing manual interventions is critical to lowering administrative burdens and mitigating compliance disputes.

Expansion of VAT exemptions and rates

Vietnam has broadened its list of VAT-exempt goods, signalling a move to reduce tax friction on exports and support certain economic sectors. Notable changes include:

• Imported goods for financial leasing may be transported to non-tariff zones without incurring VAT.

• Natural resources and minerals on the Government’s regulated list, whether raw or processed, will be exempt when exported. This reinforces the Government’s policy of limiting unprocessed resource flows while supporting downstream industries.

• Exemptions for low-value personal effects, border-trade goods, and cultural artefacts are confirmed, maintaining incentives for cross-border mobility and preservation activities.

At the same time, some existing preferences have been re-profiled. Fertilisers, fishing vessels, and specialised agricultural machinery—previously zero-rated—will move to a 5 percent VAT rate. Other products, including sugar, processed rosin, and specialised teaching or research equipment, will shift from 5 percent to 10 percent.

The law also addresses a longstanding issue in Vietnam’s VAT enforcement: misclassification. Taxpayers engaged in multi-rate activities must separately account for each item. Where differentiation is impossible, the highest applicable rate must be applied. Revised rules also define VAT treatment for primary commodities such as unprocessed agricultural, forestry and fishery products, as well as scrap and by-products.

VAT on low-value express shipments: A significant new revenue source

Vietnam began applying VAT to low-value express consignments on 18 February 2025, reversing a historic exemption. Customs reports that the change has already generated more than VND 1 trillion (as of mid-September), aided by a new electronic declaration system.

The policy targets a persistent problem in e-commerce: consignments being deliberately split to fall under low-value thresholds. By closing the gap, authorities aim to reduce unfair competition and support domestic producers facing pressure from low-cost imports.

Special Consumption Tax: Incentives and tighter controls

Alongside VAT reform, Vietnam has revised its SCT law with dual aims: encouraging productive investment while reinforcing public-health interventions.

Removed or expanded exemptions

• The SCT on air conditioners of 24,000 BTU or below has been removed, a decision welcomed by manufacturers and importers.

• Broader exemptions are granted for goods manufactured for export, returned exported goods that have already paid SCT, vehicles used on heritage sites or public service premises, and specialised aircraft used for pilot training.

Vietnam’s latest tax reforms represent one of the most comprehensive adjustments to VAT and SCT policy in recent years. The package combines administrative modernisation with targeted fiscal measures and is intended to support economic activity, safeguard domestic industries, and advance public-health goals.