Decision 01/2025/QD-TTg: Complete Abrogation of Decision No. 78/2010/QD-TTg dated November 30, 2010 of the Prime Minister on Tax Exemption Threshold for Imported Goods Sent via Express Delivery Services

Overview of Decision 01/2025/QD-TTg

Decision No. 01/2025/QD-TTg was issued by the Prime Minister on January 3, 2025, and takes effect from February 18, 2025. This decision completely abolishes Decision No. 78/2010/QD-TTg dated November 30, 2010, of the Prime Minister concerning the value threshold for imported goods sent via express delivery services to be exempt from tax.

Content of Abolished Decision 78/2010/QD-TTg

Decision 78/2010/QD-TTg previously regulated the value threshold for imported goods eligible for tax exemption when sent via express delivery services. Specifically:

• Tax exemption threshold: Imported goods valued at no more than VND 1 million were exempt from import duties
• Scope of application: Applied to consignments sent via international express delivery services
• Purpose: To facilitate the importation of low-value goods and reduce administrative procedures

The abolition of Decision 78/2010 marks a significant change in import tax policy for goods sent via express delivery.

Reasons for Abolishing Decision 78/2010/QD-TTg

Although the document does not explicitly state specific reasons, the abolition of this decision may stem from the following causes:

Changes in Tax Policy

• Need to adjust the tax exemption threshold to suit the current economic situation
• The VND 1 million threshold set in 2010 may no longer be appropriate after more than 14 years
• Need to align with new provisions in the Law on Export Tax and Import Tax

Management of Cross-Border E-Commerce Activities

• The explosion of cross-border e-commerce in recent years
• Need for stricter control over imported goods via online platforms
• Ensuring fair competition between imported and domestic goods

Consumer Protection and National Security

• Strengthening quality control of imported goods
• Preventing counterfeit goods and intellectual property violations
• Controlling items that may harm health or security

Impact on Businesses and Individuals

For SME Businesses

Import Businesses:

• Need to update new regulations on tax exemption thresholds (if replacement documents are issued)
• Recalculate import costs for small consignments
• Adjust procurement strategies and product pricing

E-Commerce Businesses:

• Cross-border selling businesses need to review their business models
• Import tax costs may increase, affecting selling prices and competitiveness
• Need legal consultation to ensure compliance with new regulations

Logistics and Express Delivery Businesses:

• Changes in customs declaration procedures
• Need to guide customers on changes in tax policies
• Update systems to comply with new regulations

For Individuals

Consumers Purchasing International Goods:

• Small orders from abroad may be subject to import duties
• Costs of purchasing international goods may increase
• Need to thoroughly understand taxes and fees before placing orders

Recipients of Gifts from Abroad:

• Even small-value gifts may be subject to tax
• Need to complete customs procedures for imported consignments

Important Points to Note

Effective Date

• Decision 01/2025/QD-TTg takes effect from February 18, 2025
• Imported consignments before February 18, 2025, still apply the old regulations under Decision 78/2010
• Consignments from February 18, 2025, onwards will comply with new regulations

Replacement Regulations

• Businesses need to monitor new legal documents on import taxes
• New decisions on tax exemption thresholds may be issued in the near future
• Apply current regulations in the Law on Export Tax and Import Tax and guiding documents

Legal Compliance

• Businesses must fully and accurately declare the value of imported goods
• Pay taxes on time as prescribed
• Retain documents related to goods importation

Recommendations for SME Businesses

Update Information

• Regularly monitor the websites of the Ministry of Finance and General Department of Customs
• Participate in training sessions and seminars on new tax policies
• Consult with tax and customs advisory experts

Adjust Business Plans

• Reassess import costs and adjust selling prices if necessary
• Seek alternative supply sources or optimize import processes
• Consider importing in larger quantities to reduce unit costs

Strengthen Internal Management

• Train employees on new regulations
• Establish strict legal compliance procedures
• Use management software to track imported consignments

Practical Actions for Business Owners

Immediate Actions (Before February 18, 2025)

Inventory Assessment:

• Review current inventory levels
• Expedite importation of goods under the old exemption threshold if beneficial
• Calculate potential cost increases for regular imports

Supplier Communication:

• Inform international suppliers of upcoming changes
• Negotiate terms considering potential tax implications
• Explore consolidated shipping options to optimize costs

Financial Planning:

• Budget for increased import costs
• Adjust cash flow projections
• Review pricing strategies to maintain margins

Medium-Term Actions (February-June 2025)

Monitor Regulatory Developments:

• Watch for new decisions establishing replacement exemption thresholds
• Track implementation guidance from customs authorities
• Join industry associations for collective updates

Business Model Review:

• Evaluate whether cross-border e-commerce remains viable
• Consider domestic sourcing alternatives
• Assess market positioning relative to competitors

Customer Communication:

• Inform customers of potential price changes
• Update website terms regarding import duties
• Provide transparency about tax-related costs

Long-Term Strategic Considerations

Diversification:

• Develop relationships with domestic suppliers
• Explore regional sourcing opportunities
• Balance import dependency with local alternatives

Operational Efficiency:

• Invest in customs compliance systems
• Train staff on import documentation
• Establish relationships with customs brokers

Market Positioning:

• Emphasize value-added services beyond price
• Focus on product quality and authenticity
• Build brand loyalty to offset potential price increases

Special Considerations by Business Type

Online Retailers

• Update e-commerce platforms with accurate landed costs
• Implement tax calculators for customer transparency
• Consider free shipping thresholds in relation to tax impacts

Small Import Businesses

• Consolidate shipments to reduce per-unit costs
• Negotiate better terms with freight forwarders
• Explore bonded warehouse options for inventory management

Service Providers Using Imported Components

• Factor tax costs into service pricing
• Maintain buffer inventory to manage cost fluctuations
• Explore product substitution possibilities

Conclusion

Decision 01/2025/QD-TTg abolishing Decision 78/2010/QD-TTg represents a significant change in import tax policy for goods sent via express delivery services. SME businesses, particularly those operating in cross-border e-commerce and goods importation, need to proactively update information, adjust business strategies, and ensure full compliance with new legal regulations to avoid risks and leverage development opportunities.

The abolition of the VND 1 million tax exemption threshold will require careful planning and adaptation by affected businesses. While this may increase costs in the short term, it also presents opportunities for businesses to refine their operations, strengthen compliance systems, and build more sustainable business models. Business owners should view this regulatory change not merely as a challenge but as an impetus to enhance operational efficiency and strategic positioning in an evolving regulatory environment.