Overview of the Policy Change

Starting February 18, 2025, the Vietnamese government officially abolishes the import tax exemption for low-value goods imported via express delivery services. According to Decision No. 01/2025/QĐ-TTg, all imported shipments valued at 1 million VND (approximately $40) or less will no longer be exempt from import duty and value-added tax (VAT). This policy change means that every imported product entering Vietnam, regardless of its declared value, is now subject to import taxes and VAT, significantly impacting cross-border e-commerce and express shipment imports.

Background of the Policy

In 2010, the Vietnamese government introduced Decision No. 78/2010/QĐ-TTg, which exempted imported goods valued at 1 million VND or less from import duty and value-added tax (VAT) when shipped via express delivery services. This tax exemption aimed to streamline customs clearance and accelerate the processing of low-value shipments. However, with the explosive growth of cross-border e-commerce and a surge in low-value imports, concerns emerged over significant tax revenue losses and unfair competition for domestic manufacturers. The exemption effectively gave imported goods a pricing advantage compared to locally produced products, which remain subject to full VAT and import duties.

Key Changes in Import Tax Policy

Vietnam has officially abolished the import tax exemption for low-value goods valued under 1 million VND (approximately $40) shipped via express delivery services. Previously, these low-value shipments benefited from tax-free status, significantly lowering costs for consumers and cross-border e-commerce buyers importing small parcels. However, as outlined in Decision No. 01/2025/QĐ-TTg, this tax exemption has been fully revoked starting February 18, 2025. From this date onward, all imported goods entering Vietnam—regardless of their declared value—are subject to import duties and value-added tax (VAT).

This policy shift impacts international parcels and express shipments commonly used by e-commerce platforms and individual consumers. It aims to create a fairer tax environment and level the playing field between imported products and domestically manufactured goods, which have always been subject to import taxes and VAT.

Implications for Importers and Consumers

• Increased Import Costs: Imported goods previously exempt from import duty and VAT will now incur additional taxes, leading to higher retail prices for low-value products imported via express delivery. This change affects both cross-border e-commerce buyers and import businesses relying on low-value shipments.

• Stricter Customs Compliance: Importers must now ensure accurate customs declarations and full payment of import duties and VAT on every shipment, regardless of value. Failure to comply may result in delays, fines, or confiscation.

• Impact on E-Commerce and Cross-Border Shopping: Consumers purchasing from international e-commerce platforms will likely face higher costs due to the new tax obligations on low-value goods. This may influence buying behaviors and shipping preferences.

• Potential Changes in Shipping Strategies: Businesses may need to explore alternative shipping methods or bulk shipments to minimize tax impacts and maintain competitive pricing.

What Are the New Import Tax Rates?

Under the updated Vietnamese import tax regulations effective February 18, 2025, all express shipments—regardless of their declared value—are now subject to import taxes and fees. The key tax components applicable to imported goods via express delivery include:

• Import Duty: The import tariff rate varies depending on the product category, ranging typically from 10% to 30%. Different goods are classified under specific HS codes, which determine the applicable duty rate. Importers should verify the tariff classification of their products to accurately calculate import duties.

• Value-Added Tax (VAT): Imported goods are subject to VAT rates between 8% and 10%, depending on the product type. Most general consumer goods incur a 10% VAT, while some essential items may have reduced VAT rates.

• Special Consumption Tax (SCT): This tax applies selectively to certain imported products such as alcohol, tobacco, luxury items, and some high-end consumer goods. The SCT rate varies widely based on the product category and government regulations.

Rationale Behind the Decision

The Vietnamese government’s decision to eliminate the import tax exemption for low-value shipments aims to achieve several strategic objectives:

• Enhance Tax Equity: By taxing all imported goods equally, regardless of value, Vietnam promotes a fair competitive environment between imported products and domestically manufactured goods, ensuring no unfair price advantages.

• Increase National Tax Revenue: With the exponential growth of cross-border e-commerce and imports of low-value goods, abolishing the exemption allows the government to capture significant tax revenue previously lost from untaxed shipments.

• Support Domestic Manufacturing: Removing the tax exemption reduces the competitive edge of imported low-cost goods, thereby helping local producers maintain market share and fostering domestic economic growth.

What Should Importers and Consumers Do?

To adapt effectively to the new import tax regime, importers and consumers should consider the following:

• Calculate Total Costs Including Import Taxes: Before purchasing or importing goods, buyers must factor in import duty, VAT, and any applicable special consumption taxes to accurately estimate the landed cost of products.

• Comply with Updated Customs Procedures: Importers should ensure full compliance with Vietnam’s customs declaration requirements, timely payment of all applicable taxes, and accurate documentation to avoid delays or penalties.

• Explore Alternative Shipping and Tax Optimization Strategies: To mitigate increased costs, businesses might consider options such as bulk shipments, consolidated freight, or working with customs brokers to optimize tax liabilities and logistics efficiency.

Conclusion

The implementation of Decision No. 01/2025/QĐ-TTg represents a major shift in Vietnam’s import tax regulations, ending the previous exemption for low-value goods imported via express delivery services. This policy change directly impacts both businesses and consumers involved in cross-border e-commerce and international shipments to Vietnam.

To ensure full compliance with Vietnam’s updated import tax laws, importers and buyers must thoroughly understand the new rules, including mandatory payment of import duties, value-added tax (VAT), and applicable special consumption taxes on all shipments regardless of value. Proper financial planning and adjustment of pricing strategies are essential to navigate the increased costs and customs procedures effectively.

Staying informed about these important changes in Vietnam’s import tax policy 2025 will help businesses minimize risks, avoid customs delays, and maintain competitive advantage in the growing Vietnamese market.

For personalized guidance and expert advice on navigating Vietnam’s new import tax regulations, contact Green NRJ today for a free consultation. Our experienced team is ready to help you ensure compliance and optimize your import processes.

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