Vietnam — Tax: VAT

Why This Matters

The 8% reduced rate is a temporary stimulus measure renewed in periodic government decrees rather than a permanent law change, so businesses need to check the current decree's expiry date and exact scope (it excludes real estate, banking, telecoms, and a few other sectors) before assuming it applies to a given invoice.

Key Facts

• Standard VAT rate: 10%, applying to most goods and services not otherwise specified.
• Temporary reduced rate: 8% on most goods/services (excluding real estate, banking/finance, insurance, telecoms, IT, mining, and a few other carved-out sectors) — periodically extended by government resolution, so confirm the current decree's validity dates.
• 5% reduced rate: essential goods like clean water, medical equipment/supplies, teaching aids, and unprocessed agricultural products sold to processors.
• 0% rate: exported goods and services, and international transportation.
• VAT-exempt: financial services, credit/securities services, life and health insurance, medical/dental services, education and training, and a handful of other categories.
• Businesses with annual revenue above the registration threshold (currently VND 200,000,000, revised upward periodically) must register for VAT and file monthly or quarterly, depending on revenue size.

Steps

1. Determine your VAT rate exposure — Classify goods/services sold against the 10% standard, 8% temporary-reduced, 5% reduced, 0% export, or exempt categories — many businesses sell a mix and must apply different rates line by line on invoices.
2. Register for VAT and e-invoicing — Register the business for VAT with the local tax department as part of enterprise registration, and set up mandatory e-invoicing (hóa đơn điện tử) through GDT-connected software before issuing any invoices.
3. File monthly or quarterly returns — Businesses above the revenue threshold file monthly; smaller/newer businesses may qualify for quarterly filing. Output VAT collected less deductible input VAT determines the amount payable or refundable.
4. Claim input VAT credits — Keep valid e-invoices for all purchases to support input VAT credit claims — invoices missing required fields or from unregistered suppliers are routinely disallowed on audit.
5. Apply for VAT refunds where eligible — Exporters and investment-project businesses with consistent input VAT surpluses can apply for cash refunds, though processing can take several months and often triggers a tax audit.

Costs

• Standard VAT rate: 10%
• Temporary reduced rate (most sectors, subject to current decree): 8%
• Reduced rate (essentials): 5%
• Export rate: 0%

Timelines

• Monthly VAT filing deadline: 20th day of the following month
• Quarterly VAT filing deadline (smaller businesses): Last day of the month following quarter-end
• VAT refund processing (exporters): Typically 40 days to several months depending on audit risk

Required Documents

• VAT registration as part of Enterprise Registration Certificate
• E-invoicing system connected to GDT (hóa đơn điện tử)
• Monthly/quarterly VAT declaration form (Form 01/GTGT)
• Supplier invoices supporting input VAT credit claims
• Customs declarations for export VAT (0% rate) claims

Common Mistakes

• Applying the 8% reduced rate to a good/service that is actually excluded (e.g., real estate, banking, telecoms) because the exclusion list is easy to miss inside the decree text.
• Using non-compliant or manually issued invoices instead of the mandatory e-invoice system, which invalidates input VAT credit claims on audit.
• Missing the periodic renewal/expiry of the temporary 8% rate and continuing to under-charge VAT after it reverts to 10%.
• Applying for an export VAT refund without complete customs and payment documentation, leading to long delays or rejection.

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