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Friday, June 21, 2024

New VAT threshold proposed

The Saigon Times

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HCMC – The Ministry of Finance has circulated a draft of the revised value added tax (VAT) law, proposing that businesses owned by individuals or households with annual revenue of VND150 million or above be subject to the law.

This proposed VAT threshold is VND50 million higher than the current level.

The rationale behind the VAT threshold adjustment, as explained by the Ministry of Finance, is the significant increase in the consumer price index (CPI) in recent years. This revision aims to align the VAT threshold with rising prices.

The increased VAT threshold would not result in additional compliance costs or administrative procedures for taxpayers, said the ministry.

According to data from the General Statistics Office (GSO), about 5.5 million household businesses nationwide contribute to 30% of gross domestic product (GDP) a year.

The draft proposed that goods exchanged by residents in areas which border other countries enjoy VAT exemption. Conversely, three categories of goods, including imported cigarettes, wine, and beer for export, gasoline and oils, and cars sold in bonded zones, as well as goods and services unregistered for trading in bonded zones, will not be entitled to VAT exemption.

Over the years, VAT has contributed more than 20% to annual state budget revenue, according to the ministry.

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