- Vietnam will no longer exempt small value imported goods from value-added tax (VAT) starting February 18, 2025.
- This policy change aims to ensure fairness in the tax system, align with international trends, and increase state revenue.
- The new policy eliminates the exemption for small value imported goods previously granted under Decision No. 78/2010/QD-TTg.
- The exemption created unfair competition between domestic and imported goods, as domestic goods were subject to full VAT while imported goods were exempt.
- The growth of e-commerce led to a surge in small value imported goods, allowing businesses to exploit the exemption by splitting shipments to avoid VAT.
- The global trend is moving towards eliminating VAT exemptions for small value imported goods, with the EU, UK, Australia, Singapore, and Thailand already implementing similar measures.
- The new policy requires businesses to declare and pay VAT according to the VAT Law and related guidelines.
- Customs authorities will use customs declarations and detailed lists from express delivery companies to determine the amount of tax payable.
- Declarations will be made through the automated cargo clearance system (VNACCS) for air and sea transport or paper declarations for road and rail transport.
- The VNACCS system currently lacks the functionality to automatically calculate VAT for small value goods, requiring businesses to calculate and declare the tax themselves.
- The General Department of Customs is working with technology contractors to update the system, but it is expected to take time.
Source: baochinhphu.vn
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
