Vietnam VAT Updates: New Rules for Foreign E-Commerce Suppliers (2025)
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In recent years, the Vietnamese government has made several amendments to the VAT Law. It implemented VAT and corporate income tax on the revenue of non-resident e-commerce suppliers and digital platforms that facilitate these supplies.
The government has proposed new amendments to the VAT laws and sent them to the National Assembly for approval to further regulate this matter and to secure more revenue for the state budget.
Proposed Amendments to the VAT Law
The proposed amendments to the VAT Law aim to clarify which foreign taxable persons engaged in e-commerce and digital platforms are subject to Vietnamese VAt rules and regulations.
Under the proposed amendments, foreign suppliers are e-commerce or digital platform-based businesses that do not have permanent establishments in Vietnam but sell to Vietnamese consumers. Digital platform operators are liable for deducting and paying the VAT on behalf of these foreign suppliers.
Besides these clarifications, the amendments propose new applicable VAT rates, moving from the current variable percentage-based rates applied to revenue that foreign suppliers generate to applying either 10%, 5%, or exemption, depending on the type of income.
Under the current rules of variable percentage-based rates, foreign suppliers pay VAT at 5%, 3%, or 2% or are exempt, depending on the type of income they generate.
Furthermore, the proposed amendments state that foreign suppliers can use tax payment documents to claim input VAT. A separate Decree will regulate the contents and other requirements relating to these tax payment documents.
Conclusion
The National Assembly is expected to adopt the proposed amendments in the second part of November, and the new rules should become effective on July 1, 2025. While waiting for the amendments' official adoption, foreign suppliers should determine if and to which extent new rules apply to them. Moreover, those affected should prepare for the upcoming implementation of new regulations.
Source: EY
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