Table of Contents
What is VAT and Who Needs to Register?
VAT is a consumption-based tax imposed at each stage of the supply chain, from production to sale. In Vietnam, VAT is applied to:
- Domestic sales of goods and services
- Imports
- Construction, leasing, logistics, and export operations
Businesses required to register for VAT include:
- Domestic enterprises producing or trading goods/services
- Importers
- Foreign-owned entities conducting business in Vietnam
VAT Rates in Vietnam (2025)
Vietnam applies three VAT rates:
| Rate | Applies To |
|---|---|
| 10% | Most goods and services |
| 5% | Essential items: healthcare, education, clean water, agricultural products |
| 0% | Exports, international transportation, offshore outsourcing |
Some sectors like financial services, education, and healthcare may be VAT-exempt but still need to submit declarations.
How to Register for VAT
Step 1: Business Registration
- Obtain a Business Registration Certificate (BRC)
- Receive a Tax Identification Number (TIN)
- Complete VAT registration within 10 days of receiving your BRC
Step 2: E-Invoice Setup
- All businesses must issue e-invoices via the national e-invoice portal or authorized platforms
Step 3: Choose Filing Frequency
- Monthly: Revenue over VND 50 billion/year
- Quarterly: Revenue under that threshold
Calculating VAT
Formula: VAT Payable = Output VAT – Input VAT
- Output VAT: VAT charged on goods/services sold
- Input VAT: VAT paid when purchasing goods/services
Example:
- Sales: VND 200 million → Output VAT = VND 20 million
- Purchases: VND 80 million → Input VAT = VND 8 million
- VAT Payable = VND 12 million
VAT Filing and Payment Deadlines
| Filing Type | Deadline |
|---|---|
| Monthly | 20th of the following month |
| Quarterly | 30th of the following quarter |
Payments are due at the same time. Late filings can result in financial penalties.
Common VAT Filing Errors and Solutions
- Incorrect Invoice Format: Use licensed e-invoicing systems approved by the Ministry of Finance
- Neglecting Input VAT Records: Keep all invoices and documents organized
- Wrong VAT Rate: Confirm product/service classification with a tax expert
- Missing Deadlines: Use automated tax tools or reminders
Claiming VAT Refunds in Vietnam
Businesses may qualify for refunds if:
- Input VAT exceeds output VAT (export operations)
- Large investment projects accumulate input VAT
- Setup or expansion phase incurs major input costs
Minimum refund value: VND 300 million
Processing time: 20–40 working days
Penalties for Non-Compliance
| Violation | Penalty |
|---|---|
| Late filing | VND 2–25 million |
| Incorrect VAT return | Up to 20% of tax payable |
| Failure to issue e-invoices | Heavy fines + audit risk |
Best Practices for Managing VAT
- Maintain accurate digital accounting records
- Set reminders for deadlines
- Conduct monthly VAT reviews
- Coordinate with foreign contractor tax if needed
- Consult professional advisors for complex issues
Final Thoughts
Understanding and complying with Vietnam’s VAT system is crucial for financial health and legal compliance. By registering on time, calculating VAT accurately, meeting filing deadlines, and keeping complete records, businesses can avoid penalties and benefit from refunds.
Need help with VAT in Vietnam? Contact Green NRJ for expert assistance with VAT registration, reporting, refunds, and long-term compliance strategy.
