VAT Guidance for Wood and Wood Products under VAT Law 2024 and Decree 181/2025/ND-CP
RegHub explainer by New MarketerLast updated:
This explanation was generated by AI and checked by an automated AI review, not by a human expert. It is not legal, tax or accounting advice and may contain errors. Check the official document before you rely on it.
The Ministry of Finance provides guidance on VAT treatment of wood and wood products effective 1 July 2025 under VAT Law 48/2024/QH15 and Decree 181/2025/ND-CP. The key point: wood is explicitly excluded from the 5% VAT group applicable to minimally processed agricultural and forestry products; processed wood and commercially traded wood is subject to 10% VAT. Specifically: self-produced minimally processed forestry products sold by the producer are VAT-exempt. However, wood (even minimally processed) does **not qualify for the 5% rate** because the new law explicitly excludes wood from that category. Commercially traded or further-processed wood products attract **10% VAT**. On 13 April 2026 the Ministry of Finance issued Official Letter 4582/BTC-CST providing detailed guidance on VAT treatment of minimally processed wood to provincial and city tax departments.
VAT on Wood and Wood Products (from 1 July 2025)
Question: A business purchases raw timber from plantation owners, processes it into products, and sells. What VAT rate applies from 1 July 2025?
Legal Basis
VAT Law 48/2024/QH15 (amended by Law 149/2025/QH15):
Article 5.1 - VAT-exempt: Unprocessed or minimally processed plantation/forestry/aquaculture products sold by the producer itself, and at import stage.
Enterprises and cooperatives buying the above and reselling to other enterprises/cooperatives are not required to declare or pay VAT, but may deduct input VAT.
Article 9.2(d) - 5% rate: Plantation/forestry products (excluding wood and bamboo shoots), livestock, and minimally processed aquaculture, excluding VAT-exempt items.
Article 9.3 - 10% rate: All goods and services not covered by Articles 9.1 and 9.2, including services from foreign providers via e-commerce.
Decree 181/2025/ND-CP (amended by Decree 359/2025/ND-CP):
Article 19.3 - 5% rate: Plantation/forestry products (excluding wood and bamboo shoots), livestock, and minimally processed aquaculture.
Summary for Wood Trading Businesses
| Case | VAT Rate |
|---|---|
| Raw/minimally processed wood sold by producer | 0% (exempt) |
| Minimally processed wood sold between enterprises | 0% (no filing required; input VAT deductible) |
| Wood sold to households/individuals (direct method) | 1% x revenue |
| Processed wood / wood products | 10% |
Note: The Ministry of Finance issued Official Letter 4582/BTC-CST on 13 April 2026 providing detailed guidance to provincial tax departments on minimally processed wood.