On the afternoon of June 17, Minister of Finance Ho Duc Phoc, authorized by the Prime Minister, presented to the National Assembly the draft Law on Value Added Tax (amended). In it, he clearly stated the reasons and directions for amending the Law on Value Added Tax (VAT). Minister Ho Duc Phoc said that there are 5 reasons leading to the necessity of promulgating the Law on Value Added Tax (amended). Notably, VAT is currently being applied incorrectly and insufficiently to all groups of goods. Revenue from sales of goods and services not subject to VAT with a level of 100 million VND or less per year needs to be studied and adjusted to suit price fluctuations and a number of other factors to suit the socio-economic context. “Regulations on VAT calculation prices for real estate business activities still have different interpretations between taxpayers and tax authorities. At the same time, regulations on input VAT deductions need to be more stringent to help prevent fraud in VAT deductions and refunds, and prevent budget losses,” Minister Ho Duc Phoc presented.

Minister of Finance Ho Duc Phoc. Photo of the National Assembly.

In particular, according to the Government's proposal, it is necessary to study and supplement the regulations on VAT refunds for enterprises producing and supplying goods and services subject to 5% VAT, whose input is mainly subject to a 10% tax rate; study and amend the regulations on tax refunds for investment projects to handle problems arising in practice and create conditions for enterprises to invest and innovate technology, thereby increasing labor productivity and increasing the competitiveness of enterprises. In the revised contents, it is noteworthy that the subjects not subject to VAT are reduced in many fields and industries. For example, in the agricultural sector, the Government proposes to amend the regulations on fertilizers, fishing vessels in offshore and sea areas, and some types of specialized machinery and equipment serving agricultural production... from not subject to VAT to being subject to 5% tax. This amendment aims to overcome difficulties in determining the purpose of use of specialized machinery and equipment used for multiple purposes, including agricultural production. In the review report, Chairman of the Finance and Budget Committee Le Quang Manh said that the draft Law supplements regulations on gifts, presents, movable assets, and border goods within the import tax exemption limit according to the law on export tax and import tax, which are not subject to VAT.

Chairman of the Finance and Budget Committee Le Quang Manh. Photo: National Assembly

According to the Government, although not stipulated in the Law, in practice, VAT exemption associated with import tax exemption is also applied to imported goods with a value of less than 1 million VND sent via express delivery (Decision 78/2010). With the explosion of cross-border e-commerce, the volume of small-value cross-border transactions of goods has increased many times in recent times. In Vietnam, every day, an average of 4-5 million small-value orders are shipped from China to Vietnam via Shopee, Lazada, Tiki, TikTok, etc. According to Mr. Le Quang Manh, many countries have removed the VAT exemption for small-value imported goods to protect revenue sources and create an equal business environment between domestically produced and imported goods. The agency reviewing the draft Law proposed that the Government have appropriate policies to expand and cover revenue sources in the context of current budget constraints. At the same time, explain the legal basis of Decision 78/2010 for the above content. Source: https://laodong.vn/kinh-doanh/4-5-trieu-don-hang-tu-trung-quoc-ve-viet-nam-moi-ngay-qua-shopee-lazada-1354123.ldo