Summary Of Newly Amended Administrative Procedures In Tax Management

Key Takeaways

• The 2024 VAT Law, effective July 1, 2025, fundamentally changes regulations on taxable subjects and the conditions for tax deduction.
• The 2% VAT reduction policy is extended through the end of 2026, with its scope expanded to cover more economic sectors.
• E-commerce marketplaces are required to withhold and pay taxes on behalf of their sellers starting July 1, 2025.
• The transition to the VNeID electronic identity is mandatory, completely replacing all old login accounts for tax and public services.
• Numerous administrative procedures are being simplified, consolidated, and fully digitized from end to end.

According to the latest tax regulations from the Government and the Ministry of Finance, a range of administrative procedures in the tax sector will be amended, supplemented, or abolished, taking effect in 2025-2026. These changes focus on two main trends: simplifying procedures to reduce the compliance burden on businesses and tightening management in new areas like the digital economy.

1. Enactment of the 2024 VAT Law

The Value Added Tax Law No. 48/2024/QH15, effective from July 1, 2025, is the most far-reaching change, reshaping one of the most critical taxes for businesses.

The most important adjustment is the requirement for non-cash payment vouchers for purchased goods and services valued at 20 million VND (800 USD) or more to be eligible for deduction. This regulation aims to increase transparency in commercial transactions and assist tax authorities in tax management and control.

The new law comprehensively revises the subjects liable for and exempt from VAT, expanding the list of non-taxable goods and services to include many essential consumer products. Notably, the 0% tax rate regulation is expanded for export activities and services provided abroad.

Regarding tax calculation methods, the Law provides clearer definitions for the conditions to apply the tax deduction method versus the direct calculation method. At the same time, the rules for VAT refunds are standardized, making it easier for businesses to comply and optimize their cash flow.

2. The 2% VAT reduction policy

Resolution 204/2025/QH15 officially extends the policy of a 2% reduction in the VAT rate from July 1, 2025, through December 31, 2026, creating a stable 1.5-year period for businesses to plan their operations.

This policy applies to groups of goods and services with a 10% tax rate, reducing it to 8%. However, certain sectors are excluded from this tax reduction:

• Telecommunications
• Financial, banking, and insurance activities
• Real estate business
• Metals and mineral products (excluding coal)
• Products subject to Special Consumption Tax (excluding gasoline)

Notably, this extension expands the scope of application to new sectors such as logistics, information technology services, and gasoline. The extended duration aims to stimulate economic growth and support business recovery from the impacts of economic downturns.

3. E-commerce marketplaces now required to declare and pay tax on behalf of sellers

Decree 117/2025/NĐ-CP, effective July 1, 2025, introduces a fundamental change in tax management for business activities on digital platforms. Domestic and foreign e-commerce platform operators are now obligated to withhold and pay taxes on behalf of household and individual businesses operating on their platforms.

VAT withholding rates

• Goods: 1%
• Services: 5%
• Transport, services associated with goods: 3%

PIT withholding rates

For resident individuals:

• Goods: 0.5%
• Services: 2%
• Transport, services associated with goods: 1.5%

For non-resident individuals:

• Goods: 1%
• Services: 5%
• Transport, services associated with goods: 2%

The time of withholding is defined as the moment a transaction is successfully confirmed and payment is accepted on the platform. This regulation ensures timeliness and accuracy in collecting tax from e-commerce activities.

4. Transition to electronic identity: VNeID and personal identification numbers

The electronic identity revolution officially begins on July 1, 2025, marking a significant turning point in the relationship between citizens, businesses, and government agencies.

VNeID accounts become mandatory

Starting July 1, 2025, all old login accounts on the National Public Service Portal and the e-Tax System will officially expire. Businesses and organizations are required to register and use an electronic identity account via the VNeID application to perform tax administrative procedures.

This transition requires businesses to prepare in advance. The legal representative must register for a Level 2 electronic identity account and then proceed to register an identity for their organization. The processing time for applications is 3-15 working days, depending on the completeness of the information in the national database.

Personal identification numbers replace tax codes

From July 1, 2025, the personal identification number (PIN) will officially replace the personal tax code in all transactions with tax authorities. This is a crucial step in unifying the national identity system, enabling data integration between government agencies.

Concurrently, the procedure for re-issuing a Tax Registration Certificate is also abolished and replaced by an electronic lookup system. This significantly reduces administrative time and costs for both government agencies and citizens, while also preventing the problem of individuals having two personal tax codes, which complicates management.

5. Consolidation and simplification of PIT procedures

Decision 1848/QĐ-TTg has conducted a comprehensive review, consolidating seven procedures related to declaring personal income tax from real estate transfers, inheritance, and gifts into a single procedure.

The PIT payment deadline for many procedures has been shortened from 5 days to 3 days, increasing efficiency and reducing compliance costs for citizens. This is particularly significant for real estate transactions, which demand high accuracy and rapid processing.

This process standardization also helps minimize errors and increase transparency in handling applications. Taxpayers can track the status of their applications online, allowing for proactive personal financial planning, while also simplifying the role of businesses in PIT finalization for their employees.

6. Raising the taxable revenue threshold for household businesses

One of the most positive changes in the 2024 VAT Law is the raising of the tax-exemption threshold from 100 million VND to 200 million VND (8,000 USD) per year, effective January 1, 2026.

This regulation will directly support millions of household businesses, especially micro-scale production and business establishments. Increasing the exemption threshold not only lessens the financial burden but also significantly reduces the time and cost associated with tax law compliance.

This policy is similar to the incentives for small businesses under the corporate income tax law, aligning with the trend of encouraging entrepreneurship and the growth of the individual economy, and facilitating the transition from the informal to the formal economy. It also helps reduce the pressure on the tax management system by significantly decreasing the number of taxpayers.

Newly amended administrative procedures in tax management

7. Transition to 100% end-to-end online public services

The goal of fully digitizing tax administrative procedures is being systematically implemented. Most procedures, from registration and declaration to payment and refunds, are being standardized for 100% online execution.

The elimination of paper-based records not only saves time but also minimizes errors caused by manual data entry. Businesses can carry out procedures at any time, without being constrained by the office hours of the tax authorities.

The system’s automated checks and confirmations help shorten application processing times from several days to just a few hours in many cases. This is especially important for businesses that need to calculate their cash flow accurately and in a timely manner.

8. Decentralization and delegation of authority in tax management

Decree 122/2025/NĐ-CP has delegated authority more clearly to various levels of tax management, reducing unnecessary intermediary steps and increasing proactivity in handling tasks.

A key change is the abolition of the requirement to re-submit documents that are already available in the government’s data systems. This significantly reduces the administrative burden for businesses and increases the processing efficiency of tax authorities.

The clear delegation of authority regarding the location and deadline for submitting documents for each type of tax and specific case makes it easier for taxpayers to identify the required procedures. It also provides tax officials with clear jurisdiction in handling different types of applications.

9. Standardization and integration of national data

Strengthening connectivity between databases is the foundation for all these administrative reforms. The tax system is now integrated with the national databases for population and business registration. Data accuracy is ensured through automatic cross-referencing between systems, which helps minimize manual entry errors and increases the reliability of tax information.

A unified data ecosystem also allows for more accurate analysis and forecasting of tax collection, supporting the development of tax policies that are better aligned with economic realities.

10. Review and elimination of unnecessary procedures

Under Decision 1848/QĐ-TTg, many administrative procedures that were outdated or no longer relevant have been abolished. Typical examples include the procedure for declaring the business license fee, re-issuing tax registration certificates, and many redundant reports and declarations.

Eliminating unnecessary procedures not only helps businesses save time and money but also allows tax authorities to focus their resources on truly essential tasks. This review process is conducted periodically and systematically, ensuring that the administrative procedure system is always up-to-date and relevant to the evolving economy.The changes in tax administrative procedures from 2025 are part of a major reform aimed at creating a more modern and effective tax management system. Leaders must immediately direct their Finance, Accounting, and HR departments to review internal processes, update software, and prepare for the transition to the new identification and declaration methods to leverage the advantages of an increasingly transparent and streamlined business environment. For businesses needing professional support, compliance advisory services can help ensure an effective and lawful adaptation to the new regulations.