Vietnam VAT update

Mon 11th Apr 2016

Vietnam’s National Assembly has this month approved changes to the VAT laws, including modifications to the import Special Consumption Tax.

The changes include:

  • Certain agriculture-related businesses are to become VAT nil-rated, allowing them not to charge VAT, but recover any input VAT suffered
  • The period for the application of VAT credits has been shortened from 12 months to the period of the next VAT return declaration
  • Mineral exporters are exempted from VAT
  • The supply of nursing and care services are exempted from VAT
  • Penalty interest on overdue VAT payments has been reduced to 0.03% per day of the VAT due
  • Related party transactions incurring the Special Consumption Tax on imports face new rules of determining the taxable base to prevent abusive practices