Prepared by: Tax & Accounting Consulting Department Vinasc Accounting and Tax Consulting Company Limited – December 23, 2025
Dear Readers,
Following up on last week’s update regarding the draft Personal Income Tax Law, Vinasc Company is pleased to present to you an important legal piece of information that has just been passed. On December 11, 2025, the National Assembly officially promulgated the Value Added Tax Law (amended) No. 149/2025/QH15 .
This law, effective January 1, 2026 , introduces landmark adjustments to align with the new tax system and support small businesses. The key points are as follows:
1. Changes to the Exempt Subjects (Article 5)
The new law has refined the scope of entities exempt from VAT, particularly focusing on agriculture and household businesses:
- Agricultural, Forestry, and Fishery Products: * Unprocessed or only minimally processed products produced, caught, and sold by organizations and individuals, as well as those imported, continue to be exempt from tax.
- Special mechanism for businesses (B2B): 1Businesses and cooperatives that purchase these products to resell to other businesses and cooperatives are not required to declare or pay VAT, but are still entitled to deduct input VAT . This is a major advantage that helps optimize cash flow for agricultural trading entities.
- Raise the threshold for tax-exempt revenue:
- In line with the draft Personal Income Tax Law, the revenue threshold for household and individual businesses exempt from VAT has been raised from 100 million VND/year to 500 million VND/year .
- This change helps reduce the administrative burden and tax costs for millions of small businesses.
2. Tax rates on waste and by-products (Article 9)
The law clarifies how tax rates are applied to products generated during the production process:
- Waste products, by-products, and scrap materials: When recovered during the production process, these items will be subject to the tax rate applicable to that specific product . This regulation eliminates previous disputes regarding the application of the main product tax rate or the standard scrap tax rate.
3. Summary of major changes
Content | Old regulations | New law (Effective 2026) |
Revenue threshold for household businesses | 100 million VND/year | 500 million VND/year |
B2B agricultural trade | Complex declaration | Input tax can be deducted without declaration. |
Tax rate for scrap/by-products | Not clear | According to the tax rate of that specific item. |
Recommendation from Vinasc
The promulgation of Law No. 149/2025/QH15 is an important step in the tax reform roadmap. Vinasc would like to offer the following notes for your company:
For agricultural trading businesses: It is necessary to review supply contracts and accounting procedures to correctly apply the “no declaration but deductible input tax” mechanism from 2026 in order to optimize tax benefits.
For household businesses: With the new revenue threshold of 500 million VND, many household businesses will transition from being subject to taxation to being exempt from taxation. However, it is important to retain invoices and documents to prove this revenue level when the tax authorities conduct an audit.
Accounting system: Businesses that generate scrap and by-products need to update the list of goods and corresponding tax rates on their ERP/accounting software system to ensure compliance with the new regulations.
If you require a more in-depth analysis of the impact of this Law on your specific business model, please contact Vinasc’s team of experts.