With 452 out of 453 deputies voting in favor (99.78%), the National Assembly on the morning of June 17 officially passed a resolution to reduce VAT.

Under the resolution, from July 1, 2025, to December 31, 2026, the VAT rate will be reduced by 2%, down to 8%, for a wide range of goods and services, excluding sectors such as telecommunications, finance, banking, securities, insurance, real estate, metal products, mineral products (excluding coal), and goods and services subject to special consumption tax (excluding gasoline).

Compared to previous resolutions, this policy broadens the range of goods and services eligible for the VAT cut and extends the timeline through the end of 2026.

Newly added categories benefiting from the tax cut include transportation, logistics, and information technology goods and services.

Education, vocational training, and healthcare services remain exempt from VAT under current tax laws and are not subject to the reduction.

Financial, banking, securities, and insurance services are also not taxed under VAT and therefore not included in the reduction. Telecommunications and real estate sectors, which have seen growth recently, are also excluded from this policy based on Resolution No. 43.

According to the government's proposal in Submission No. 206 dated April 16, 2025, the VAT reduction is expected to decrease state budget revenue by approximately 121.74 trillion VND (roughly 4.87 billion USD), with an estimated 39.54 trillion VND (1.58 billion USD) loss in the second half of 2025 and 82.2 trillion VND (3.29 billion USD) in 2026.

However, the tax reduction aims to stimulate production and business activities, potentially offsetting the budget shortfall through increased revenues from other taxes driven by the ripple effects of the VAT cut.

To compensate for the revenue drop, the government will instruct ministries and localities to implement specific measures. These include strengthening management, streamlining administrative procedures, and advancing digital transformation in tax administration, especially in key sectors and locations such as land, real estate transactions, e-commerce, and digital business platforms.

A key strategy will be expanding the use of e-invoices generated from point-of-sale systems, especially in restaurants, hotels, fuel stations, and gold trading. The target is to increase state budget revenue in 2025 by approximately 10% compared to 2024.

New 'beneficial owner' concept added to revised enterprise law

With 455 out of 457 deputies voting in favor (95.19%), the National Assembly has passed amendments to the Law on Enterprises.

A significant addition in the revised law is the inclusion of the “beneficial owner” concept for enterprises.

Accordingly, a beneficial owner is defined as an individual who ultimately owns or controls a company, excluding direct representatives of state ownership in enterprises fully owned by the government or representatives of state capital in joint-stock and multi-member limited liability companies under regulations on state capital investment.

Enterprises are required to collect, update, and maintain information about their beneficial owners and provide this data to competent authorities upon request.

This data must include full name, date of birth, nationality, ethnicity, gender, contact address, ownership or control percentage, and identification document details of the beneficial owner.

The law also introduces regulations on private bond issuance for non-public companies. The total value of bonds issued must not exceed five times the company’s equity capital, based on the most recent audited annual financial report prior to the issuance year.

This provision aims to strengthen the financial capacity of bond issuers and mitigate payment risks for both issuers and investors.

Amendments were also made to Point b, Clause 2 and Point b, Clause 3, Article 17 of the Law on Enterprises, prohibiting civil servants and public employees from founding, investing in, or managing enterprises, except in cases allowed under laws related to science, technology, innovation, and digital transformation.

The revised Enterprise Law takes effect on July 1.

Tuan Nguyen