Vietnam Removes Import Tax Exemption for Low-Value Goods in 2025

Effective February 18, 2025, the Vietnamese government has implemented a significant policy change concerning the importation of low-value goods through express delivery services. As stipulated in Decision No. 01/2025/QĐ-TTg, the previous tax exemption for imported goods valued at 1 million VND or less has been abolished. Consequently, all imported goods, regardless of their value, are now subject to import duty and value-added tax (VAT).

Background of the Policy Change

In 2010, Decision No. 78/2010/QĐ-TTg was enacted to exempt goods valued at 1 million VND or less from import duty and VAT when sent via express delivery services. This measure aimed to simplify customs procedures and expedite the clearance of low-value shipments. However, with the rapid growth of e-commerce and the increasing volume of low-value imports, concerns arose regarding tax revenue loss and unfair competition with domestically produced goods. The exemption was perceived to create a price advantage for imported goods over similar domestic products, which are subject to VAT.

Key Changes in Vietnam’s Import Tax Policy

Vietnam has officially removed the import tax exemption for goods valued under 1 million VND ($40) when shipped via express delivery services. Previously, such low-value shipments enjoyed tax-free status, reducing costs for cross-border e-commerce buyers. However, under Decision 01/2025/QĐ-TTg, this exemption has been revoked, meaning all imported goods—regardless of value—are now subject to import duties and VAT.

Implications for Importers and Consumers

The abolition of the tax exemption means that all imported goods, irrespective of their value, will now incur import duty and VAT. Importers and consumers should be aware of the following:

• Increased Costs: Imported goods previously exempted will now be more expensive due to the additional taxes.
• Customs Procedures: Importers must ensure compliance with customs declarations and tax payments for all shipments, regardless of value.
• E-commerce Impact: Consumers purchasing low-value goods from international e-commerce platforms may experience higher prices due to the new tax obligations.

What Are the New Import Tax Rates?

Under the revised tax regulations, express shipments will now incur:

• Import duty: Varies by product category (e.g., 10%-30%).
• Value-added tax (VAT): 8%-10% depending on the goods.
• Special consumption tax (if applicable): For certain goods like alcohol or luxury products.

Rationale Behind the Decision

The policy shift aims to:

• Enhance Tax Equity: Ensure that all goods, whether imported or domestically produced, are subject to the same tax regulations, promoting fair competition.
• Increase Tax Revenue: Capture tax from the growing volume of low-value imports, thereby boosting national revenue.
• Support Domestic Production: By eliminating the tax advantage of imported goods, the policy supports local manufacturers facing competition from low-cost imports.

What Should Importers and Consumers Do?

• Calculate total costs before purchasing: Buyers should consider import duties and VAT in addition to product prices.
• Check new customs procedures: Businesses importing goods should ensure compliance with updated import declarations and customs clearance processes.
• Seek alternative shipping options: Some importers may explore bulk shipping or alternative tax structures to minimize costs.

Conclusion

The enforcement of Decision No. 01/2025/QĐ-TTg marks a pivotal change in Vietnam’s import tax policy. Both businesses and consumers engaged in importing goods via express delivery services should familiarize themselves with the new regulations to ensure compliance and adjust their financial planning accordingly.

Related Articles:

• Guide to Importing to Vietnam