Decree 359/2025/ND-CP: Amendments to Decree 181/2025/ND-CP on VAT

Overview

Decree 359/2025/ND-CP issued by the Government on December 31, 2025 is an important legal document in the field of Value Added Tax (VAT). This decree has the function of amending and supplementing certain articles of Decree No. 181/2025/ND-CP dated July 1, 2025, which provides detailed implementation of certain articles of the Value Added Tax Law.

Issuance Context

The issuance of this amendment decree demonstrates the flexible and timely adjustment by state management agencies to the tax legal system. After nearly 6 months of implementing Decree 181/2025/ND-CP (from July 2025), the Government recognized the need to adjust certain contents to:

• Ensure feasibility in practical implementation
• Resolve issues arising during application
• Perfect the legal framework for VAT
• Create more favorable conditions for businesses in compliance

Scope of Adjustment

Decree 359/2025/ND-CP focuses on amending and supplementing "certain articles" of Decree 181/2025/ND-CP. Although specific detailed content of the amended articles has not been fully disclosed in the source document, commonly affected areas typically include:

Potentially Adjusted Areas:

• VAT taxable subjects: Clarification of goods and services subject to tax, non-taxable, or tax-exempt
• Tax calculation methods: Adjustments to credit method or direct method
• Tax rates: Possible clarification or adjustment of tax rates for certain specific goods and services
• Input VAT deduction: Conditions, procedures, and documentation for input VAT deduction
• VAT refund: Processes, documentation, and conditions for tax refund
• Tax administrative procedures: Declaration, payment, and finalization of VAT

Significance for Businesses

For Small and Medium Enterprises (SMEs):

SMEs need to pay particular attention to this decree because:

1. Legal compliance: Any changes to VAT regulations require businesses to adjust immediately to ensure compliance

2. Financial impact: Changes in tax rates and deduction conditions may directly affect cash flow and tax costs

3. Internal processes: Need to review and update accounting processes, invoicing, and tax declaration according to new regulations

4. Penalty risks: Failure to update timely may lead to violations and administrative tax penalties

Recommended Actions:

• Monitor complete document: Wait for and study the entire decree content when officially published
• Consult experts: Consult with chief accountant or tax advisory experts to understand specific impacts
• Train staff: Organize training for accounting and finance departments on the changes
• Update systems: Adjust accounting software and e-invoice systems if necessary
• Archive documents: Maintain complete records and documents related to VAT

Effective Date

The decree was issued on December 31, 2025. The specific effective date will be stipulated in the official content of the decree, typically 15-45 days after signing or from a specific date clearly stated.

Areas Likely Requiring Business Attention

Compliance Preparation:

Businesses should prepare for potential changes in:

• Documentation requirements: Enhanced or modified documentation for VAT claims
• Declaration procedures: Possible adjustments to filing deadlines or formats
• E-invoicing integration: Alignment with electronic invoice systems
• Cross-border transactions: Clarifications on VAT treatment for international services
• Specific industries: Sector-specific provisions that may affect specialized businesses

Risk Management:

To minimize compliance risks:

1. Establish monitoring system: Set up alerts for official publication and guidance
2. Conduct impact assessment: Evaluate how changes affect current practices
3. Budget for adjustments: Allocate resources for system updates and training
4. Review vendor contracts: Ensure supplier agreements align with new VAT treatment
5. Maintain communication: Stay connected with tax authorities for clarifications

Practical Implementation Considerations

For Different Business Types:

Manufacturing enterprises should focus on:

• Changes to input VAT deduction for raw materials
• Export VAT refund procedures
• VAT on imported equipment

Service providers should monitor:

• VAT rates for various service categories
• Cross-border service VAT treatment
• Digital service taxation

Trading businesses need to watch:

• VAT on goods distribution
• Invoice management requirements
• Inventory valuation impacts

E-commerce platforms must consider:

• Online transaction VAT obligations
• Marketplace facilitator rules
• Digital invoice requirements

Conclusion

Decree 359/2025/ND-CP is an important document in perfecting the VAT legal system. Businesses, especially SMEs, need to proactively update information, thoroughly study the changes, and prepare to adjust to ensure proper compliance with new regulations, optimize tax costs, and avoid legal risks. The decree represents the Government's commitment to maintaining a responsive and practical tax framework that adapts to business realities while ensuring revenue collection objectives.