Abolishing regulations on tax exemption for small-value imported goods must comply with international practices

VCN - The Ministry of Finance said that the abolition of regulations on tax exemption for imported goods valued at less than VND1 million must comply with international practices in the context of the growing trend of cross-border e-commerce activities.
Delegating the power to the government to waive, lower, or manage late tax penalties is suitable Delegating the power to the government to waive, lower, or manage late tax penalties is suitable
Perfecting the law on import and export tax towards exemption and reduction for the right subjects Perfecting the law on import and export tax towards exemption and reduction for the right subjects
Are belongings of foreigners on business trip to Vietnam exempt from tax? Are belongings of foreigners on business trip to Vietnam exempt from tax?
International trade activities have changed a lot, many countries have abolished regulations on VAT exemption for small-value imported shipments. Photo: H.Anh
International trade activities have changed a lot, many countries have abolished regulations on VAT exemption for small-value imported shipments. Photo: H.Anh

According to the Ministry of Finance, to simplify customs procedures and implement international commitments, in 2010, the Ministry of Finance submitted to the Prime Minister a draft Decision on the tax-exempt quota for imported goods sent via express delivery services (Decision No. 78/2010/QD-TTg).

Accordingly, "a tax-exempt quota of VND 1 million (equivalent to about USD 50) was applied to suit reality".

However, recently, international trade activities have changed a lot. Many countries and regions have abolished the VAT exemption regulations for small-value imported goods.

Specifically, EU countries have abolished the VAT exemption regulations for shipments of 22 euros or less.

Along with that, the United Kingdom (England, Scotland and Wales) also abolished the VAT exemption regulations for imported goods with a total value of 135 pounds or less from January 1, 2021.

In Singapore, from January 1, 2023, the VAT exemption for low-value goods, especially in the e-commerce sector, has been also abolished.

With the e-commerce development, the volume of imported small-value goods ​​is increasing. Photo: H.Anh
With the e-commerce development, the volume of imported small-value goods ​​is increasing. Photo: H.Anh

To ensure fair trade practices, from May 1, 2024, Thailand has also collected VAT on all imported goods, regardless of value.

In addition, at seminars, experts from the Trade Facilitation Project (TFP) also recommended that Vietnam consider abolishing the regulations of VAT exemption on low-value imported goods.

In this trend, the Ministry of Finance has submitted to the Government a draft Decree on customs management of exported and imported goods traded via e-commerce, in which it proposes to abolish the VAT exemption for imported goods sent via express delivery services with a value of less than VND1 million.

This content has been consulted with organizations and individuals according to regulations, has been appraised by the Ministry of Justice and reported to the Government and the Prime Minister.

However, according to the Ministry of Finance, the issuance and implementation of the Decree on customs management of exported and imported goods traded via e-commerce needs to be carried out synchronously with the completion of the IT infrastructure system, so it needs more time for preparation.

To comply with the new requirements and basing on the recommendations of a number of agencies in the process of developing the draft Law on VAT (amended), the Ministry of Finance is coordinating with relevant units to urgently make an application to submit to the competent authority to issue legal documents to abolish Decision No. 78/2010/QD-TTg in accordance with the order and procedures.

Regarding this issue, in the discussion session on October 29, 2024 on the draft Law on Value Added Tax (amended), many National Assembly deputies agreed with non-tax exemption for small –value goods imported through e-commerce platforms.

According to the deputy Hoang Minh Hieu (Nghe An delegation), with the development of e-commerce, imported small-value goods is increasing, so for each order, the value may be small but the total volume of goods imported in this form accounts for a fairly large volume.

Therefore, if tax exemption is applied, it will lead to missing a fairly large amount of tax, not to mention the situation of "splitting" orders to avoid tax.

At the discussion session, explaining this issue, the Deputy Prime Minister and Minister of Finance said that the Government will abolish Decision 78/2010/QD-TTg and include in the draft Law on Value Added Tax (amended) the regulation that all goods with small value must pay tax.

By Hoai Anh/ Huyen Trang

Related News

Proposal to amend regulations on goods circulation

Proposal to amend regulations on goods circulation

VCN - To perfect the policy on customs procedures, inspection and supervision, enterprises and associations have contributed many ideas from practical activities. Thereby, the Drafting Committee (General Department of Customs) has more perspectives to build policies to meet the goal of facilitating trade and ensuring state management of customs.
Stimulate production and business, submit to the National Assembly to continue reducing 2% VAT

Stimulate production and business, submit to the National Assembly to continue reducing 2% VAT

VCN - Reducing value added tax (VAT) has an impact on the decrease of state budget revenue but also stimulates production and promotes business activities, thereby contributing to creating more revenue for the state budget.
Are belongings of foreigners on business trip to Vietnam exempt from tax?

Are belongings of foreigners on business trip to Vietnam exempt from tax?

VCN - That is the question of Nhat Viet Relocation Company Limited, which has just been answered by the Customs Department and given specific instructions on providing a confirmation of residence of foreigners on business trip to Vietnam to follow tax exemption procedures for movable assets.
Perfecting the law on import and export tax towards exemption and reduction for the right subjects

Perfecting the law on import and export tax towards exemption and reduction for the right subjects

VCN - According to Deputy Director General of Vietnam Customs Luu Manh Tuong, there are still many issues to take full advantage of Free Trade Agreements (FTAs), including the need to perfect legal policies on import and export taxes in the direction of strict management and exemption for the right subjects.

Latest News

Step up negotiations on customs commitments within the FTA framework

Step up negotiations on customs commitments within the FTA framework

VCN - Promoting negotiations on customs commitments within the framework of free trade agreements (FTAs) plays an important role in facilitating import and export activities. These commitments not only help optimize the customs clearance process but also minimize costs and risks for businesses, opening up great opportunities for Vietnamese goods to access deeper into the international market.
Review of VAT exemptions for imported machinery and equipment

Review of VAT exemptions for imported machinery and equipment

VCN - The General Department of Vietnam Customs has directed provincial and municipal customs departments to review, inspect, and address issues related to the implementation of VAT exemption policies for specialized machinery and equipment used in agricultural production.
Customs tightens oversight on e-commerce imports

Customs tightens oversight on e-commerce imports

VCN - The General Department of Vietnam Customs has issued new directives to enhance the management of imported goods transacted through e-commerce platforms, addressing ambiguities and ensuring consistent enforcement across provincial and municipal customs departments.
Bringing practical experience into customs management policy

Bringing practical experience into customs management policy

VCN - At the workshop to collect opinions from Southern Customs units on the draft Decree amending and supplementing Decree 08/2015/ND-CP dated January 21, 2015 of the Government; the draft Circular amending and supplementing Circular 38/2015/TT-BTC dated March 25, 2015 and Circular 39/2018/TT-BTC dated April 20, 2018 of the Minister of Finance, organized by the General Department of Customs last weekend, many Southern Customs units contributed specific contents from practical operations in the locality.

More News

Businesses anticipate new policies on customs procedures and supervision

Businesses anticipate new policies on customs procedures and supervision

VCN - With this year’s import-export turnover estimated at nearly US$800 billion and forecasting to surpass this milestone next year, the business community holds high expectations for upcoming amendments and supplements to customs management, procedures, and supervision policies. These changes are expected not only to facilitate trade but also to enhance state management efficiency and support economic development.
Do exported foods need iodine supplementation?

Do exported foods need iodine supplementation?

VCN - Currently, Vietnamese processed food products, including seafood products, have been exported to more than 160 countries, and no country has yet required that "salt used in food processing must be salt with added iodine".
Amendments to the Value-Added Tax Law passed: Fertilizers to be taxed at 5%

Amendments to the Value-Added Tax Law passed: Fertilizers to be taxed at 5%

VCN - With the majority of National Assembly deputies voting in favor, the National Assembly officially approved the revised Value-Added Tax (VAT) Law during its afternoon session on November 26, 2024, as part of the 8th session's agenda.
Proposal to change the application time of new regulations on construction materials import

Proposal to change the application time of new regulations on construction materials import

VCN - To comply with the circular on quality management of construction materials, many businesses importing this item are complaining about difficulties and asking for an extension of the implementation time.
Ministry of Finance proposed to reduce VAT by 2% in the first 6 months of 2025

Ministry of Finance proposed to reduce VAT by 2% in the first 6 months of 2025

VCN - In order to promote the early recovery and development of production and business activities, contributing back to the State budget, the Ministry of Finance proposed to continue reducing 2% of VAT on groups of goods and services currently subject to a tax rate of 10% in the first 6 months of 2025.
Hanoi Customs resolves tax policy queries for enterprises

Hanoi Customs resolves tax policy queries for enterprises

VCN - Queries regarding customs consultation procedures and tax refunds due to price reduction clauses were addressed by the Hanoi Customs Department, providing clarity for businesses.
Regularly check tax obligations to avoid temporary exit suspension

Regularly check tax obligations to avoid temporary exit suspension

VCN - In order to avoid the situation of arriving at the airport or border gate and only finding out that you owe taxes and being temporarily suspended from leaving the country by the Tax Authority, the Tax Authority recommends that taxpayers regularly look up their tax obligations to have a plan to pay taxes on time, not letting the tax debt situation drag on and drag on.
Implementing the SAFE framework in Vietnam: Assessment through the lens of international standards

Implementing the SAFE framework in Vietnam: Assessment through the lens of international standards

VCN - In June 2005, the World Customs Organization (WCO) developed and adopted the SAFE Framework of Standards to Secure and Facilitate Global Trade. The SAFE Framework plays a crucial role in encouraging countries to modernize, enhance security, and facilitate trade within global supply chain management and Authorized Economic Operator (AEO) programs. This approach introduces a comprehensive method for cross-border goods management and promotes closer cooperation between Customs, businesses, and stakeholders. The Customs News presents a two-part series on implementing the SAFE Framework in Vietnam.
Proposing the Tax Authority be flexible in applying tax debt enforcement measures simultaneously

Proposing the Tax Authority be flexible in applying tax debt enforcement measures simultaneously

VCN - In the draft revised Law on Tax Administration, the Ministry of Finance proposed amending regulations on measures to enforce administrative decisions on tax administration to remove obstacles in policy mechanism and improve the effectiveness of tax administration.
Read More

Your care

Latest Most read
Step up negotiations on customs commitments within the FTA framework

Step up negotiations on customs commitments within the FTA framework

VCN - In addition to promoting negotiations on customs commitments within the framework of FTAs ​​under negotiation, the General Department of Customs actively supports businesses to effectively utilize commitments in signed FTAs, especially CPTPP, EVFTA,
Proposal to amend regulations on goods circulation

Proposal to amend regulations on goods circulation

VCN - The Vietnam Association of Maritime Agents, Brokers and Services has proposes to amend and supplement regulations related to the transport of goods subject to customs supervision.
Review of VAT exemptions for imported machinery and equipment

Review of VAT exemptions for imported machinery and equipment

The General Department of Vietnam Customs has directed provincial and municipal customs departments to review, inspect, and address issues related to the implementation of VAT exemption policies for specialized machinery and equipment used in agricultural
Customs tightens oversight on e-commerce imports

Customs tightens oversight on e-commerce imports

The General Department of Vietnam Customs has issued new directives to enhance the management of imported goods transacted through e-commerce platforms
Bringing practical experience into customs management policy

Bringing practical experience into customs management policy

VCN - At the workshop to collect opinions from Southern Customs units on the draft Decree amending and supplementing Decree 08/2015/ND-CP dated January 21, 2015 of the Government; the draft Circular amending and supplementing Circular 38/2015/TT-BTC dated
Mobile Version