Vietnam VAT Rates 2025–2026: Full Guide for Businesses
- Nguyễn Thanh Thủy
- 3 days ago
- 8 min read
Vietnam’s VAT system is entering a new phase in 2025–2026. The core Vietnam VAT rates remain 0%, 5% and 10%, but new rules – including Law 48/2024/QH15 and an extended 2% VAT reduction – are changing how businesses apply these rates in practice.
This guide gives a practical overview of Vietnam VAT rates 2025–2026, the new law, and what companies should do to stay compliant.
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Key Takeaways on Vietnam VAT Rates 2025–2026
In 2025, Vietnam continues to apply three main VAT levels: 0%, 5% and 10%. A temporary 8% rate also applies to many goods and services that normally fall under the 10% standard rate, as part of a 2% VAT reduction programme running through 2026.
The new VAT Law 48/2024/QH15, effective from 1 July 2025, modernises the VAT framework. It reconfirms the rate structure, revises which goods and services fall under each rate, tightens input VAT deduction and refund rules, and formally brings foreign e-commerce and digital service providers into the VAT net.
For businesses operating or investing in Vietnam, understanding how these rules interact is essential for pricing, invoicing, cash flow and tax risk management.
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Overview of Vietnam’s VAT Framework in 2025–2026
New VAT Law 48/2024/QH15 – Effective from 1 July 2025
Law 48/2024/QH15 replaces the older VAT legislation and its amendments. It takes effect on 1 July 2025, with some provisions for small taxpayers applying from 1 January 2026.
The law confirms the three main VAT rates of 0%, 5% and 10%, but reorganises which items fall into each category. Some goods and services move from 5% to 10%, while a number of previously exempt activities are now taxed at 5%. The law also updates definitions of taxable persons and explicitly covers foreign suppliers of e-commerce and digital services into Vietnam.
Another key feature is stricter rules around input VAT deduction and VAT refunds, particularly focusing on documentation, substance of transactions and proof of non-cash payment.
VAT Scope, Taxable Activities and Exemptions
Vietnam VAT generally applies to goods and services used for production, business and consumption in Vietnam, including imports and qualifying cross-border services.
From a practical perspective, supplies can be grouped into three broad buckets:
Those taxable at 0%, 5% or 10%;
VAT-exempt supplies, where no output VAT is charged and input VAT is often not creditable;
Certain items not subject to VAT at all.
Correctly identifying which bucket a transaction falls into is the foundation for applying the correct rate and determining whether input VAT can be credited.
Vietnam VAT Rates and Applicability in 2025–2026
The current Vietnam VAT rates operate as follows:
0% VAT for exports and certain international activities;
5% VAT for selected essential goods and services;
10% as the standard rate;
8% as a temporary reduced rate for many 10%-rated supplies.
0% VAT Rate in Vietnam
The 0% VAT rate is primarily designed to support exports and international services. It applies to exported goods, exported services, international transportation and certain services provided to foreign customers where the service is consumed outside Vietnam.
To apply 0% VAT, businesses must maintain a robust set of documents, typically including contracts with foreign buyers, customs declarations for exported goods, non-cash payment evidence via banking channels and the standard commercial documents such as invoices and packing lists.
If the documentation is incomplete or inconsistent, the tax authority may deny the 0% rate and re-assess the supply at a higher rate, often with penalties and interest.
5% VAT Rate – Essential Goods and Services
The 5% VAT rate is reserved for selected essential goods and services. Common examples include certain agricultural products, clean water for daily life, some healthcare and educational services, and specific cultural or book-related products.
Under the new VAT law, the list of 5% items has been adjusted. Some items move up to the standard 10% rate, and some activities that were previously VAT-exempt are now taxed at 5%. Businesses therefore need to revisit their product and service lists, contracts and invoicing templates to ensure they are not continuing to use outdated classifications.
10% Standard VAT Rate – and When It Becomes 8%
The standard VAT rate in Vietnam is 10%. This applies to most goods and services that do not qualify for 0% or 5% and are not exempt. In practice, this includes the majority of domestic trading activities, manufacturing for the local market, many professional services and a wide range of digital and e-commerce services.
From 1 July 2025 to 31 December 2026, a 2% VAT reduction continues for many supplies that would normally attract 10%. These are temporarily taxed at 8%. The lists of eligible and non-eligible items are detailed in separate implementing regulations and require careful checking against HS codes and business lines.
Sectors Excluded from the 8% VAT Rate
Not all 10%-rated activities benefit from the 2% reduction. Certain sectors remain at 10% and are specifically excluded from the 8% rate. Typical examples include:
Telecommunications and certain IT services;
Banking, finance, securities and insurance;
Real estate business activities;
Metals, mining and petroleum-related products;
Many goods and services subject to special consumption tax.
For businesses in these sectors, the main issue is not the 8% rate but the broader changes in documentation, input VAT deduction and classification under the new law.
Key Changes to Vietnam VAT from 1 July 2025
Beyond the rate structure, the new laws and decrees introduce several compliance changes that affect daily operations.
Stricter Conditions for Input VAT Deduction
Input VAT deduction rules are tighter. To claim input VAT, businesses generally need valid VAT invoices or import VAT documents and proof of non-cash payment. Authorities are paying closer attention to whether bank transfers and other payment evidence truly correspond to the invoices being claimed.
This means finance and accounting teams must coordinate more closely with procurement and treasury. Purchase approval, payment processing and invoice booking should be aligned so that every deductible purchase has the necessary documentation in place.
Updated VAT Refund Rules
VAT refund conditions and procedures have also been refined. Refunds are still available in key situations such as investment projects and businesses with large input VAT credits, especially for exports, but the threshold, timing and documentation requirements are more clearly defined and more strictly enforced.
For exporters and investment projects, refund planning now needs to be integrated into broader cash flow and project management, rather than treated as an afterthought at year-end.
Documentation and Invoicing for Export Transactions
Exporters face high documentation expectations. Authorities will typically look at contracts, customs declarations, bills of lading or airway bills, packing lists, commercial invoices and bank statements showing non-cash payment from foreign buyers.
Even minor inconsistencies between these documents can result in the denial of 0% VAT or input VAT refunds. For many businesses, creating a standard export documentation checklist and embedding it in internal workflows is the most practical way to manage this risk.
Practical Impact on Accounting and ERP Systems
All of these changes translate into system work. Companies often need to:
Update tax codes in their ERP or accounting software to distinguish 0%, 5%, 8%, 10%, exempt and not-subject items;
Build logic that separates eligible and excluded activities for the 8% rate;
Connect invoice processing with payment data so that non-cash payment requirements are easy to demonstrate.
Without these updates, even well-intentioned businesses can struggle during audits or tax inspections.
Sector-Specific VAT Snapshots (2025–2026)
Exporters and Processing Manufacturers
Exporters generally benefit from the 0% rate on export sales, provided that they maintain full documentation. The same products sold in the domestic market will usually attract 10% or 8%, unless they fall within the 5% list.
Manufacturers that both export and sell domestically need to allocate input VAT carefully between these activities and ensure their systems can track them separately, particularly where refund claims are involved.
E-commerce, Digital Services and Foreign Platforms
Foreign suppliers without a permanent establishment in Vietnam that provide digital services or operate e-commerce platforms are now clearly within the scope of VAT. They may need to register for tax in Vietnam or use local intermediaries to declare and pay VAT on their behalf.
This creates new obligations for both foreign providers and Vietnamese customers, especially around contract structuring, invoicing, and the allocation of tax responsibilities in commercial agreements.
Domestic Trading and Services (Retail, F&B, Logistics, etc.)
Most domestic trading and service businesses operate in the 10% or 8% space. Retailers, F&B operators, logistics providers and other service businesses need to confirm whether their supplies are eligible for the 8% rate or are part of the excluded sectors that stay at 10%.
Pricing strategies, quotation templates and contracts may need to be adjusted to reflect the applicable rate over the period from mid-2025 to the end of 2026.
Sectors Without VAT Relief – Banking, Real Estate and Others
For banking, insurance, securities, real estate and various regulated sectors, VAT relief via the 2% reduction is not available. However, these sectors still need to comply with the new rules on documentation, input VAT deduction where applicable, and reporting.
In practice, these industries often face complex transactions and large ticket sizes, so errors in classification or documentation can carry significant financial consequences.
Vietnam VAT Compliance Checklist for 2025–2026
For Existing Businesses in Vietnam
Existing businesses should start with a simple but disciplined review:
First, re-map all products and services under the correct VAT categories: 0%, 5%, 8%, 10%, exempt or not subject. This requires aligning internal descriptions with legal definitions and the detailed lists in the implementing regulations.
Second, review invoice and payment workflows. Every purchase for which input VAT will be claimed should have a clear trail: an approved VAT invoice, a corresponding contract or order, and proof of non-cash payment where required. If these elements are stored in different systems or departments, it is worth standardising how they are linked.
Third, exporters should formalise their export documentation processes. A written checklist, clear responsibilities and periodic internal reviews can significantly reduce the risk of 0% VAT or refunds being denied.
Finally, companies should ensure their ERP or accounting system reflects the reduced 8% rate, the list of excluded activities and the end date of the reduction, so that tax codes automatically revert when the policy expires.
For New Foreign Investors and FDI Companies
For new investors, VAT planning should be integrated into the initial setup, not added later.
Before incorporation, foreign investors should understand their VAT footprint: whether they expect to focus on exports, domestic sales, or digital and e-commerce services, and which Vietnam VAT rates 2025–2026 are likely to apply.
During setup, they should design VAT-ready processes from day one: e-invoice registration, bank account structures that support non-cash payment requirements, and standard operating procedures for retaining contracts and documents in a way that will satisfy future audits.
In parallel, VAT needs to be coordinated with corporate income tax, foreign contractor tax and any special consumption tax that may apply to their products or services.
Common VAT Pitfalls and How to Avoid Re-assessment
Misapplying the 8% VAT Rate
One of the most common pitfalls is incorrectly applying the 8% rate to supplies that are excluded from the 2% reduction. This can happen when teams rely on old internal rate lists or assume that all 10% activities automatically qualify for the reduced rate.
To avoid this, businesses should maintain a clear internal mapping file that explains, for each product group or service line, whether it is eligible for 8% or must remain at 10%, and why. This mapping should be reviewed whenever there are legal updates or changes in business activities.
Weak Documentation for 0% Exports
Another recurring issue is weak documentation for exports. Even genuine exports can be reclassified if the supporting documents are incomplete, inconsistent or poorly stored.
To manage this, companies should assign ownership for export files, implement a standard documentation pack and make sure that commercial, logistics and finance teams understand which documents are critical from a VAT perspective.
Input VAT Deduction without Proper Non-Cash Payment
Finally, input VAT claims can be denied when there is no acceptable evidence of non-cash payment for qualifying purchases.
This is often a systems and process issue rather than a legal misunderstanding. The practical solution is to connect invoice processing with bank payment records so that, at any point in time, it is easy to demonstrate that a given invoice was paid via transfer or another non-cash method that meets the legal requirements.
How Vinex Can Support Your Vietnam VAT Strategy
Navigating Vietnam VAT rates 2025–2026 is no longer just a matter of knowing that the rates are 0%, 5%, 8% and 10%. The combination of a new VAT law, an extended reduction programme and stricter enforcement means that businesses need solid structures, documentation and systems.
A professional tax and legal advisor can help you:
Review and re-classify your supplies under the new VAT Law and the 2% reduction policy;
Design VAT-compliant invoicing, payment and documentation workflows;
Support VAT registration, periodic filing and refund claims;
Integrate VAT considerations into your wider investment, licensing and tax strategy in Vietnam.
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