Consolidated Document No. 03/VBHN-BTC: Decree Detailing Implementation of the VAT Law

Overview

Consolidated Document No. 03/VBHN-BTC (Official Gazette No. 130, February 28, 2026) merges:

• Decree No. 181/2025/ND-CP dated July 1, 2025, effective from July 1, 2025.
• Decree No. 359/2025/ND-CP dated December 31, 2025 (amending Decree 181/2025/ND-CP), effective from January 1, 2026.

The consolidated text does not replace the two original decrees - it exists purely for ease of reference. Both decrees detail implementation of certain articles of VAT Law No. 48/2024/QH15 (as amended by Law No. 90/2025/QH15 and Law No. 149/2025/QH15).

Scope and application

The decree details: taxpayers; non-taxable subjects; taxable price; the VAT determination point; the 0 percent and 5 percent tax rates; the deduction method; the direct method; input VAT deduction; and VAT refunds. It applies to taxpayers under Article 3, tax administration agencies, and other related organizations and individuals.

Taxpayers (Article 3)

Beyond domestic producers and traders (enterprises, cooperatives, household/individual businesses, foreign-invested enterprises, export-processing enterprises), the decree spells out a newer taxpayer group:

• Foreign suppliers without a permanent establishment in Vietnam conducting e-commerce or digital-platform business with Vietnamese organizations or individuals.
• Foreign digital platform managers that withhold and remit tax on behalf of foreign suppliers.
• Vietnam-based businesses using the deduction method that buy services from foreign suppliers via e-commerce channels.
• Managers of e-commerce trading floors or digital platforms with payment functions (per Decree 117/2025/ND-CP).

Non-taxable subjects (Article 4)

A detailed list of 16 categories, notably:

• Unprocessed or only lightly processed agricultural, forestry, and aquatic products sold directly by producers; when enterprises and cooperatives trade these same products among themselves at the commercial stage, no VAT declaration is required but input VAT can still be credited (a new point effective January 1, 2026).
• Land-use-right transfers; public-owned housing sold to tenants.
• Credit, lending, securities, capital transfer, debt sale, foreign-currency trading, and derivative services.
• Funeral services; teaching and vocational training; publishing of textbooks, political books, and legal-text books.
• Intra-province public passenger transport; imported machinery not yet producible domestically for scientific research or oil and gas exploration; humanitarian aid goods; transshipped, transit, temporarily imported/re-exported goods; technology transfer, IP transfer, and software; and raw minerals on the restricted-export list.

Businesses dealing only in non-taxable goods and services cannot credit or claim a refund of the related input VAT (except where the 0 percent rate applies).

Taxable price (Articles 5-14)

Sets out how to determine the taxable price for: goods sold and imported goods (adding import duty, special consumption tax, and environmental protection tax where applicable); goods used for exchange, gifts, internal consumption, or promotions; asset leasing, processing, and construction/installation; real estate business (net of land-use fees under several specific scenarios); commission-based agency and brokerage; casino, prize-winning electronic games, and betting services; and specific sectors (electricity, transport, package tours, pawnbroking, books, printing, international telecom, and services from foreign contractors).

VAT determination point (Articles 15-16)

Sets separate rules for exported/imported goods, telecom services, electricity sales, clean water supply, insurance business, real estate business, construction/installation, and oil and gas activities - each tied to its own trigger, generally the date of data reconciliation, acceptance/handover, or transfer of ownership.

Tax rates (Articles 17-19)

• 0 percent: exported goods and services, international transport, aviation/maritime services supporting international transport, and certain services supplied to non-tariff zones - conditional on a contract and non-cash payment evidence. The decree explicitly lists cases that do not qualify for 0 percent despite an export element (technology transfer abroad, reinsurance, credit extension, capital transfer, and certain services consumed in Vietnam by foreign customers).
• 5 percent: fertilizers, plant-protection products, agricultural services, unprocessed agriculture/forestry/aquatic products (unless already non-taxable), medical equipment, medicines, books, children's toys, specialized farm machinery, and more.
• All remaining goods and services apply the standard rate under the VAT Law.

Tax calculation methods (Articles 20-22)

• Deduction method: mandatory for businesses with annual revenue of 1 billion VND or more (except household/individual businesses), or optional for newly established businesses with an approved investment project or fixed assets. Revenue is measured from the prior 12 months of tax returns, and the chosen method applies for a stable 2-year period.
• Direct method on value added: applies specifically to gold, silver, and gemstone trading and processing - tax equals value added (sale price minus corresponding purchase price) multiplied by the tax rate.

Input VAT deduction (Articles 23-24)

General rule: input VAT on goods and services used for taxable business activities is fully creditable; if used for both taxable and non-taxable activities, it must be allocated by revenue ratio. The decree lists 16 specific scenarios, including:

• No deduction for fixed assets used for national defense/security; assets of credit institutions, life insurers, securities firms, hospitals, or training institutions; and aircraft or yachts not used for cargo/passenger transport or tourism business.
• Purchase invoices of 5 million VND or more per transaction need non-cash payment evidence to be counted as a valid deductible cost when input VAT is not creditable.
• Businesses that find declaration errors can file supplementary returns before a tax inspection decision is issued, and in some cases of downward adjustment due to allocation-ratio changes, no administrative penalty applies.

Notes for businesses

Because this is a technical consolidation (not a new piece of legislation), businesses should cross-check against the original Decree 181/2025/ND-CP and Decree 359/2025/ND-CP when applying the rules, paying particular attention to provisions only effective from January 1, 2026 (such as the new rule on trading unprocessed farm produce between enterprises and cooperatives).