On 11 December 2025, the National Assembly of Vietnam issued Law No. 49/2025/QH15 amending the Law on Value-Added Tax, which officially took effect on 1 January 2026 (the “Amended VAT Law”). These changes primarily affect individuals, business households, and enterprises operating in the agriculture production sectors. In particular:
Increase in VAT Exemption Threshold and End of Presumptive Tax for Business Households and Individuals
Under the Amended VAT Law, business households and individuals with annual revenue below VND500 million are classified as non-taxable objects. In addition, the Amended VAT Law abolishes the presumptive tax regime, replacing it with a declaration-based tax system for business households and individuals. This change is expected to support digital transformation and improve transparency in the management of goods, revenue, and profits.
These amendments represent a significant shift toward a more modernized and transparency tax administration, while encouraging proper record-keeping among small businesses.
Removal of Restrictive Tax Refund Conditions
The Amended VAT Law removes Article 15.9(c) of the old VAT Law, which required that buyers could only obtain VAT refunds if sellers had declared and paid VAT on the corresponding invoices. It allows buyers to claim VAT refunds based solely on their own compliance. This reform empowers buyers and reduces opportunity costs. It is expected to streamline refund procedures and remove a major obstacle that previously hindered business operations.
Reforms in the Agricultural Sector
Agricultural Products at the Commercial Stage
Under the Amended VAT Law, unprocessed agricultural products are reclassified as non-taxable objects, which were previously subject to 5% VAT under the old VAT Law. It allows enterprises and cooperatives trading in unprocessed or primarily processed agricultural products for resale to be exempted from VAT declaration and payment, while remaining entitled to input VAT deduction. This adjustment removes inefficiencies, reduces financing burdens, and enhances competitiveness for domestic producers.
Agricultural Products Used for Animal Feed and Medicinal Materials
The Amended VAT Law removes tax rates applicable to unprocessed or primarily processed agricultural products used for animal feed and medicinal materials, which were previously subject to a 5% input VAT under the old VAT law. This amendment contributes to cost reduction and strengthens the competitiveness of the agricultural industry.
Conclusion
Overall, these changes signify a major step toward simplifying tax compliance, reducing costs, and enhancing competitiveness. With the aforementioned key updates, the Amended VAT Law is expected to foster efficiency, profitability, and fairer market conditions for individuals, business households, and enterprises across Vietnam.
