Vietnam is considering restricting its VND 1million (approx €37 or $44) low value consignment relief. This exempts from VAT parcels imported from Vietnam destined for consumers.
The current VAT rate in Vietnam is 10%.
The Ministry of Finance is concerned in the explosion in foreign e-commerce and the practise of ‘splitting’ orders by online shoppers to keep the intrinsic value below the VND 1million. Aside from the loss in VAT revenues, this creates an unfair tax burden on domestic online sellers and the traditional high-street retailer.
Rather then withdraw the VAT import exemption altogether, the Ministry is considering limiting the number of VAT exempt parcels per person to 4 per month.
Many other countries have withdrawn their low-value consignment relief altogether. These include: Australia; New Zealand; the European Union; and the UK. Singapore’s GST exemption on e-commerce ends in 2023.