Only businesses with annual revenue of over 200 million VND must pay VAT.

(Dan Tri) - Goods and services of households and individuals with annual revenue of less than 200 million VND will not be subject to value added tax, according to the provisions of the amended Law on Value Added Tax.

On the afternoon of November 26, the National Assembly passed the Law on Value Added Tax (amended) with 407/451 National Assembly deputies in favor, accounting for 84.97% of the total number of National Assembly deputies. This Law will take effect from July 1, 2025. According to the draft Law, goods and services of households and individuals doing business with an annual revenue of less than VND 200 million will not be subject to value added tax. Presenting the previous report on explanation, acceptance and adjustment, Chairman of the Finance and Budget Committee Le Quang Manh said that there were opinions suggesting to consider and raise the threshold of revenue not subject to value added tax to above VND 200 million. In addition, there were opinions suggesting a level of above or below VND 300 million or VND 400 million for the coming years. The National Assembly Standing Committee said that the current Law stipulates the revenue not subject to value added tax at VND 100 million/year.

National Assembly deputies vote to pass the Law (Photo: Hong Phong).

According to the Ministry of Finance's calculations, if the non-taxable revenue threshold is set at VND200 million/year, the number of taxable households and individuals will decrease by 620,653 households, and the State budget revenue will decrease by about VND2,630 billion. If the non-taxable revenue threshold is VND300 million/year, the number of taxable households and individuals will decrease by 734,735 households, and the State budget revenue will decrease by about VND6,383 billion. Therefore, to ensure a reasonable increase in the non-taxable revenue threshold, relatively consistent with the average GDP and CPI growth rate from 2013 to present, the draft Law stipulates a revenue threshold of VND200 million/year. The Government proposes to be assigned the authority to adjust this revenue threshold in accordance with the socio-economic development situation of each period, to ensure flexibility in management, and to suit the actual situation. Mr. Manh said that this content has been consulted by National Assembly deputies by ballot. Accordingly, 204 deputies (accounting for 63.35% of the total number of National Assembly deputies giving opinions) agreed with the regulation "Goods and services of households and individuals doing business with an annual revenue of 200 million VND or less are not subject to tax", as stated in the draft Law. In addition, the Chairman of the Finance and Budget Committee said that there were opinions suggesting not to tax private collectors when repatriating relics and antiques for protection and only taxing when private individuals trade domestically. There were opinions suggesting considering including the group of scientific and technological services as tax-exempt. The National Assembly Standing Committee's view on this matter is that in the case of imported relics and antiquities, in reality, organizations and individuals are also allowed to import them for domestic trade for business purposes, so in these cases, it is difficult for tax authorities to verify whether the purpose of importing relics and antiquities is for protection or business. Therefore, it is proposed to keep the draft Law as it is, which is only exempt from value added tax in cases where these relics are imported by competent State agencies.

Chairman of the Finance and Budget Committee Le Quang Manh (Photo: Hong Phong).

Explaining the proposal to apply a 0% VAT rate (or 1%, 2%), the National Assembly Standing Committee said that if fertilizers are subject to a 0% tax rate, it will ensure benefits for both domestic fertilizer producers and importers. However, in this case, the State budget will have to spend thousands of billions of VND every year to refund input VAT to businesses. In addition, according to the National Assembly Standing Committee, applying a 0% tax rate to fertilizers is contrary to the principles and practices of VAT, which is that a 0% tax rate only applies to exported goods and services, not to domestic consumption. "Applying in this direction will break the neutrality of tax policy, create a bad precedent and be unfair to other manufacturing industries. The regulation of a 1% or 2% tax rate for fertilizers is also not consistent with the goal of value-added tax reform, which is to reduce the number of tax rates, not increase the number of tax rates," said the Chairman of the Finance and Budget Committee.

Dantri.com.vn

Source: https://dantri.com.vn/xa-hoi/kinh-doanh-thu-tren-200-trieu-dong-moi-nam-moi-phai-nop-thue-vat-20241126163834267.htm