Vietnam's VAT system underwent its most comprehensive overhaul in over a decade with the implementation of Law No. 48/2024/QH15 on 01 July 2025.
For businesses, seven major compliance shifts were enacted—most notably the total elimination of the VND 20 million cash payment threshold, the abolition of VAT refunds for M&A restructurings, and the reclassification of fertilizers and agricultural machinery to the 5% tax bracket. For tourists, while the procedural framework remains stable, the extended 8% reduced rate now encompasses a broader spectrum of goods and services.
This guide details the current VAT rates, structural changes under the new law, eligibility criteria for business and tourist refunds, processing timelines, and a step-by-step guide to applying for a refund in 2026.
What VAT Rates Apply in Vietnam in 2026?
Vietnam operates a tiered VAT system under Law 48/2024/QH15, with a temporary 8% reduced rate extended until 31 December 2026:
|
Rate Category |
Rate |
Scope of Application |
Exceptions & Notes |
|
Standard Rate |
10% |
All goods and services unless explicitly categorized as 0%, 5%, or Exempt. |
Reverts to the universal standard after 31 Dec 2026. |
|
Reduced Rate (Temporary) |
8% |
Most standard goods & services. NEW: Now includes transportation, logistics, and IT services (Extended via Res. 204/2025). |
Excludes: Banking, finance, insurance, real estate, telecom, securities, mining, petroleum, chemicals, and SCT-liable goods. |
|
Preferential Rate |
5% |
Agricultural machinery & equipment; offshore fishing vessels; educational materials; fertilizers. |
Impact: Fertilizers were previously VAT-exempt, now reclassified to 5% to allow input VAT recovery. |
|
Zero Rate (Exports) |
0% |
Exported goods; qualifying cross-border services; on-the-spot export/import; sales to EPZs/non-tariff zones. |
Must strictly pass the "consumed outside Vietnam" test. On-the-spot export is now formally codified. |
|
VAT Exempt |
N/A |
Specific agricultural products; basic financial/health/education services; disaster relief imports. |
Crucial difference: Unlike the 0% rate, input VAT tied to exempt outputs cannot be recovered or refunded. |
What Changed Under VAT Law 48/2024? (Before vs. After)
|
Key Change |
Before (Old Law) |
After (From Jul 2025 / Jan 2026) |
|
"Zero-Cash" Rule for VAT Credit |
Invoices < VND 20M could be paid in cash and still qualify for input VAT credit. |
ALL purchases, regardless of value, require non-cash payment proof to claim input VAT credit. Cash payments disqualify recovery. |
|
VAT Refund for M&A Abolished |
Refunds were permitted for uncredited VAT during ownership transfers, mergers, or de-mergers. |
Only dissolution and bankruptcy cases retain refund eligibility. M&A structures no longer qualify. |
|
8% Rate Expansion |
Logistics, transportation, and IT services were excluded from the VAT reduction. |
These sectors are now successfully integrated into the 8% reduced rate until 31 Dec 2026. |
|
Fertilizers & Ag-Machinery |
VAT-exempt (Meaning producers could not recover input VAT). |
Reclassified to 5% VAT. Producers can now recover input VAT, fundamentally optimizing supply chains. |
|
On-the-Spot Export/Import |
Lacked a robust legal framework; required foreign traders to maintain a commercial presence. |
Formally codified. Grants the 0% rate without requiring a Permanent Establishment (PE) for the foreign trader. |
|
Mandatory E-Invoicing for Refunds |
Paper invoices were sometimes accepted as supporting documents. |
100% E-invoicing required. Any refund dossier containing paper invoices or non-compliant e-invoices will be rejected. |
|
Business Household Threshold |
Revenue ≤ VND 100M/year was VAT-exempt. |
Threshold raised to VND 500M/year (Effective Jan 2026). |
Who Can Claim a Business VAT Refund and What Are the Conditions?
To be eligible, a business must utilize the VAT Credit Method (not the direct method), maintain VAS-compliant accounting books, and process all transactions via a registered corporate bank account.
- Export Enterprises: Must have accumulated uncredited input VAT of ≥ VND 300 million exclusively from exported goods/services. (Note: Enterprises re-exporting imported goods are disqualified).
- Investment Projects: New or expanding projects with ≥ VND 300 million of uncredited input VAT accumulated during the construction/investment phase. Condition: Charter capital must be fully contributed.
- Production Enterprises: Producing 5% VAT goods/services with ≥ VND 300 million of uncredited input VAT accumulated over 12 consecutive months or 4 quarters.
- Dissolution/Bankruptcy: Entities formally dissolving with remaining uncredited input VAT.
How Do Tourists Claim a VAT Refund at Vietnamese Airports?
Foreign visitors can claim a VAT refund (up to 85% of VAT paid, with a max 15% bank service fee) at designated international airports (Noi Bai, Tan Son Nhat, Da Nang, Cam Ranh) and seaports.
Eligibility:
- Must hold a foreign passport and depart via air or sea.
- Minimum purchase of VND 2,000,000 from a single authorized VAT Refund store in one day.
- Goods must be unused and claimed within 60 days of departure.
Step-by-Step Guide:
- At the Store: Request a VAT Refund Declaration Form upon purchase. Present your passport.
- Document Check: Ensure you hold the original receipts and the Tax Refund Form before leaving.
- At the Airport (Customs): Before checking in your luggage, proceed to the VAT Refund Customs Inspection Office. Present your passport, boarding pass/ticket, receipts, and the purchased goods for physical inspection.
- At the Refund Desk: After passing security and immigration, go to the commercial bank's Tax Refund Desk to receive your refund in VND.
- Currency Exchange: Convert the VND refund into your preferred currency at adjacent airport exchange counters.
How Long Does a Business VAT Refund Take?
Under Vietnam’s Tax Administration Law, processing timelines depend strictly on the assigned audit category:
- "Refund First, Audit Later" (Fast-track): 6 working days. Granted to highly compliant businesses with a pristine e-invoice history and no prior tax violations. The tax authority disburses the funds first, followed by a post-refund audit.
- "Audit First, Refund Later" (Standard): Up to 40 working days. Applies to first-time claimants, businesses with pending tax debts, or complex dossiers requiring upfront verification.
- Complex / Disputed Cases: Can take months or even years if it involves cross-border transfer pricing issues, suspected invoice fraud, or disputed export status.
How to Apply for a Business VAT Refund — Step by Step
- Eligibility & Bookkeeping Audit: Ensure you have ≥ VND 300M in uncredited VAT, utilizing the Credit Method, with 100% non-cash payment proofs.
- Dossier Compilation: Gather all e-invoices, bank transfer receipts, ERC/IRC, and category-specific proofs (e.g., Customs Declarations for exports; Construction Permits for investment projects).
- Form Completion: Fill out Form No. 01/HT along with required regulatory annexes.
- Digital Submission: Lodge the complete dossier online via the General Department of Taxation (GDT) eTax portal (thuedientu.gdt.gov.vn). Paper dossiers are obsolete.
- Tax Authority Liaison: Proactively track the status on the portal and respond immediately to any official Requests for Information (RFI) to avoid clock-stopping delays.
Secure Your VAT Refund Smoothly
We help prepare and review the required tax documentation, guide clients through the e-tax portal submission, and support timely compliance with tax authority inquiries. With clear guidance and practical support, we help make the refund process more manageable and efficient from start to finish.
How Can We Help:
Ascentium Vietnam provides expert VAT refund advisory and compliance services for foreign-invested enterprises, including:
- Eligibility Assessment: Determining whether your business qualifies and under which category.
- Documentation Preparation: Compiling e-invoice records, non-cash payment evidence, and category-specific documents.
- Compliance Review: Verifying all VAT Law 48/2024 requirements are met before filing.
- Online Application Submission: Managing the filing process through the GDT e-tax portal.
- Tax Authority Liaison: Representing your company in communications and dispute resolution with tax authorities.
Let Us Help You Manage Your VAT Refunds
Frequently Asked Questions
The standard VAT rate is 10%. However, a temporary 2% reduction (to 8%) applies until 31 December 2026 for most goods and services under Resolution 204/2025/QH15. The 8% rate now includes transportation, logistics, and IT services — newly added from July 2025 under Law 90/2025/QH15.
Businesses using the credit method with accumulated uncredited input VAT exceeding VND 300 million in the following situations: (1) export enterprises; (2) investment projects (including oil & gas); (3) production/service enterprises after 12 months or 4 quarters; (4) dissolution/bankruptcy cases. M&A, mergers, consolidations, and separations no longer qualify from July 2025.
Seven major changes: (1) non-cash payment required for ALL purchases (VND 20M threshold removed); (2) M&A/restructuring cases excluded from refunds; (3) fertilizers/agricultural machinery reclassified from exempt to 5%; (4) on-spot export/import codified at 0%; (5) e-invoice mandatory for all refund claims; (6) transportation, logistics, and IT newly included in 8% reduction; (7) business household threshold raised to VND 500M from Jan 2026.
Tourists must purchase from designated VAT refund stores; minimum purchase VND 2,000,000 per store per day; request a tax refund receipt at point of sale (passport required); keep goods unused; present passport, boarding pass, tax invoice, and goods to the VAT Refund Counter at the airport before check-in (checked baggage) or after security (hand luggage). Refund is in Vietnamese dong (up to 85%, max 15% service fee); claim within 60 days of departure.
Fast-track: 6 working days for compliant businesses with complete documentation. Standard: up to 40 working days for verification cases. Complex/disputed: potentially years for cases involving audits, transfer pricing issues, or disputed export status. Submit complete, e-invoice-backed documentation to minimize processing time.
Form No. 01/HT (completed); IRC and ERC copies; non-cash payment documentation for all transactions; e-invoice records; bank account registered under the business's tax code; for investment projects: Land Use Right Certificate, Construction Permit, charter capital contribution certificate, project management board establishment decision; for exports: customs declarations, bills of lading, packing lists, cargo insurance documents (CIF). Online submission via the government's tax management portal is mandatory.
From July 2025, foreign digital/e-commerce suppliers without a PE in Vietnam face 10% VAT (up from 5%) on services to Vietnamese customers. They may now voluntarily register to issue Vietnamese VAT invoices, enabling them to offset FCT-VAT paid against output VAT collected. For cross-border services, the 0% rate applies only if the service is consumed outside Vietnam.
