The VAT rates currently applied in Vietnam include 0%, 5%, 8% and 10%, depending on the type of goods and services. Since 2025, the Government has adjusted the policy with the tax rate of 8% (reduced from 10%) applied to many groups of products and services until the end of 2026, to support businesses and consumers in the difficult economic context. The following article will help you understand the concept of VAT rates, classify them by level and subject, provide accurate lookup instructions and summarize important notes when declaring.
What is the VAT rate?
VAT is understood as a tax applied to the increased value of goods and services arising from the production, circulation and consumption stages, not calculated on the entire selling price of the product. This definition is stipulated in Article 2 of the Law on VAT 2008,
Besides, based on Article 9 of the Law on VAT 2024 (No. 48/2024/QH15), VAT rate is the percentage applied to the added value of goods and services to calculate the amount of tax payable. The law clearly stipulates the basic tax rates including 0%, 5%, 8% and 10%, corresponding to each specific group of goods and services, and has detailed instructions to help accountants and businesses determine the correct tax rate for each business item.
In summary, the VAT rate is the percentage applied to the added value of goods and services to calculate the amount of tax payable, which is clearly specified for each product group according to the 2024 VAT Law.
See more articles at: VAT Overview – MAN to learn more about VAT
Current VAT rates
According to Article 9 of VAT Law No. 48/2024/QH15, Vietnam's VAT system currently maintains four tax rates: 0%, 5%, 8% and 10%. The existence of multiple tax rates is to regulate consumption, encourage the development of certain sectors and ensure budget revenue. Of which, the 10% rate is considered the standard tax rate, covering most goods and services in the economy.
The Government will make flexible adjustments depending on the situation. From 2025 to the end of 2026, many groups of goods and services currently subject to 10% will be reduced to 8% to stimulate consumption and support businesses. Meanwhile, the 0% and 5% levels will still play a preferential role for essential or export sectors. This mechanism reflects the balance between budget revenue targets and social security policies.
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Classification by VAT rate and applicable subjects
VAT tax rate 0%
VAT rate 0% applies mainly to goods and services exported abroad or consumed in duty-free zones. This includes exported goods, services provided to organizations and individuals outside Vietnam, international transportation, construction and installation of works in export processing zones.
The policy aims to encourage exports and increase the competitiveness of Vietnamese products. Enterprises benefit when the output applies 0% but are still entitled to deduct and refund input tax. However, the conditions for application are very strict: export contracts, customs declarations and bank payment documents. If missing, enterprises are forced to apply the VAT rate of 10%.
For the group of subjects not subject to VAT or not required to declare and pay tax, the VAT rate 0% has a special meaning: this law allows enterprises to be refunded input VAT paid at previous stages, thereby helping exported goods and services to be tax-free when entering the international market. This mechanism contributes to reducing costs, improving competitiveness and encouraging exports.
According to Article 9 of the 2024 Law on VAT and instructions at Article 17, 18 Decree 181/2025/ND-CP, VAT rate 0% is applied to certain groups of goods and services. Including:
For export goods, including: goods sold from Vietnam to foreign countries for consumption abroad; goods supplied to organizations in duty-free zones to serve export production; goods sold at duty-free shops or in quarantine areas for people leaving the country.
For export services, including: services provided directly to organizations and individuals abroad and consumed outside of Vietnam; services provided to organizations in duty-free zones for export production; international transportation services, container lifting, loading and unloading, warehousing, document fees, sealing fees, packaging... related to export activities.
Other goods and services are subject to VAT rate 0% including: international transportation; leasing of means of transport for use outside Vietnam; aviation and maritime services for international transportation; construction works abroad or in duty-free zones; digital content products for consumption abroad; spare parts and repair materials for foreign organizations; processed goods for export; and some goods and services when exported according to regulations.
However, the law also provides Cases not eligible for VAT tax rate 0%. According to Point d, Clause 1, Article 9, Law on VAT 2024 and Clause 4, Article 17, Decree 181/2025/ND-CP, the exclusions include: technology transfer, transfer of intellectual property rights abroad; reinsurance services; credit provision; transfer of capital, derivative products; postal and telecommunications services; imported tobacco, wine, beer for re-export; gasoline sold to duty-free zones; some services provided in Vietnam such as hotels, advertising, tourism, training, etc.
| GROUP | GOODS/SERVICES |
| Export goods | Sell from Vietnam to foreign countries for consumption abroad
Provide for organizations in duty-free zones to serve export production Sold at duty free shops or quarantine areas for people leaving the country |
| Export services | Provide directly to organizations and individuals abroad and consume outside Vietnam.
Supply to organizations in duty-free zones for export production International transportation, container lifting, loading and unloading, warehousing, document fees, sealing fees, export-related packaging |
| Other types | International transportation
Vehicle rental for use outside Vietnam Air and maritime services for international transport Construction of works abroad or in duty-free zones Digital content products consumed abroad Spare parts and repair materials for foreign organizations Export processing goods Some other goods and services exported according to regulations |
| Cases where VAT rate 0% is not applied | Technology transfer, intellectual property rights transfer abroad
Reinsurance and credit services Capital transfer, derivative products Postal and telecommunications services Tobacco, alcohol, beer imported for re-export Gasoline sold in duty free zone Some services provided in Vietnam: hotels, advertising, tourism, training |
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VAT tax rate 5%
According to Clause 2, Article 9 of the 2024 Law on VAT and instructions at Article 19 of Decree 181/2025/ND-CP, VAT rate 5% Applicable to essential goods and services that contribute to supporting people's lives and developing agriculture, health, education, and culture. The specific list includes:
Clean water for production and daily life VAT rate 5% is applied, except for bottled water, jarred water or soft drinks, which are subject to VAT rate 10%. The preferential tax rate aims to ensure that people's basic needs are met at a reasonable cost, while encouraging the use of clean water in production and daily life.
Fertilizers, ores for fertilizer production, pesticides, animal growth stimulants are all subject to tax 5%. For example, apatite ore is used to produce phosphate fertilizers, mud is used to produce biofertilizers; pesticides and growth stimulants are clearly regulated in the law on quarantine and plant protection and veterinary medicine. This is a policy that directly supports agriculture.
Agricultural services such as: digging, dredging canals, ponds; caring for and preventing pests and diseases for crops; processing and preserving agricultural products. These services support production, reduce costs for farmers, and contribute to improving productivity and quality of agricultural products, especially in the small-scale production conditions of Vietnam.
Unprocessed or only pre-processed agricultural, forestry and fishery products such as crops, planted forests (except wood, bamboo shoots), aquaculture, fishing, and livestock. These products, when sold for processing or consumption, are subject to VAT rate 5%. The policy helps reduce costs, promote consumption, and support the agricultural supply chain.
Raw rubber latex (crepe latex, sheet latex, vermicelli latex, rice latex), along with rope, net, specialized thread used to weave fishing nets: These are important input materials in exploitation and aquaculture - the key economic sector of many coastal localities in Vietnam.
Traditional handicraft products from agricultural materials such as jute, sedge, bamboo, straw, leaves, water hyacinth, coconut shell, coconut shell; combed cotton fiber; newsprint. These products both utilize available materials and are closely linked to the livelihood of craft villages. The VAT rate 5% encourages the preservation and development of traditional crafts and increases the value of rural labor.
Fishing vessels, specialized machinery and equipment in agriculture are also subject to tax incentives. Tax reduction contributes to reducing initial investment costs, creating conditions for fishermen and farmers to access modern tools, thereby improving productivity, safety and production efficiency.
Medicines and medical devices The applicable levels include: disease prevention and treatment drugs; pharmaceutical ingredients and medicinal materials for drug production; vaccines; medical biological products; distilled water for mixing injections and infusions. For medical equipment, it is required to have an import license, a circulation certificate or a standard declaration in accordance with legal regulations. This is a policy that prioritizes public health.
Teaching equipment such as models, drawings, boards, chalk, rulers, compasses are also subject to tax 5%. Reducing education costs contributes to expanding access to knowledge, especially in disadvantaged areas. This policy demonstrates the State's priority in investing in future generations.
Traditional and folk performing arts activities also falls under 5%. The purpose is to encourage the preservation and promotion of intangible cultural values, while creating conditions for artists and artisans to maintain and develop their profession. This is both a cultural policy and has economic and social significance.
Children's toys and books (except for books not covered by the provisions of Article 4 of Decree 181) are also entitled to the 5% rate. This is a policy to encourage intellectual development, creativity and learning for children, while promoting the publishing industry and the production of safe and healthy toys.
Science and technology services According to the Law on Science and Technology, tax incentives are also given. This encourages businesses, research institutes, and schools to invest more in research and application, thereby promoting innovation and serving the development of the knowledge economy.
Social housing When selling, renting, or leasing, all enjoy the tax rate 5%. This is a tool to support social security policies, creating opportunities to access affordable housing for low-income people, workers, and laborers in industrial zones.
| GOODS/SERVICES GROUP | CONTENT OF APPLICATION OF VAT RATE 5% | NOTE |
| Clean water | Clean water for production and daily life | Except bottled water, jars, soft drinks (tax 10%) |
| Fertilizers, pesticides, livestock stimulants | Fertilizer
Fertilizer production ores (Apatite, mud...) Pesticides, animal growth stimulants |
Agricultural support |
| Agricultural services | Digging, dredging canals, ponds and lakes
Plant care and pest control Preliminary processing and preservation of agricultural products |
Reduce production costs |
| Unprocessed agricultural, forestry and fishery products | Planted trees, planted forests (except wood, bamboo shoots)
Aquaculture and fishing Livestock products |
Only applies to raw or semi-processed products. |
| Rubber, fishing gear | Raw rubber latex (crepe latex, sheet latex, vermicelli latex, granular latex)
Rope, net, fishing net yarn |
Raw materials for exploitation and aquaculture |
| Traditional handicraft products | Jute, sedge, bamboo, straw, leaves, water hyacinth, coconut shell/skull; combed cotton; newsprint | Encourage the preservation of craft villages |
| Boats & Agricultural Machinery | Fishing vessels, specialized agricultural machinery and equipment | Reduce investment costs for farmers and fishermen |
| Medicines & Medical Devices | Medicines, vaccines, pharmaceuticals, biological products
Distilled water for injection and infusion Medical equipment with license/certification |
Prioritize public health care |
| Teaching equipment | Models, drawings, boards, chalk, rulers, compasses… | Support education, especially in disadvantaged areas |
| Traditional performing arts | Traditional folk art activities | Preserve and promote cultural values |
| Children's toys & books | Children's toys; books (except for those not covered by Article 4 of Decree 181) | Developing children's intelligence and creativity |
| Science and technology services | Science and Technology Services under the Law on Science and Technology | Promote research, pouring |
| Social housing | Sale, rent, lease purchase of social housing | Social security policy, support for low-income people |
VAT tax rate 10%
Clause 3 Article 9 of VAT Law No. 48/2024/QH15 regulations:
“VAT rate 10% applies to goods and services not included in VAT rate groups 0% and 5%. This is a common tax rate, accounting for a large proportion of the economy. The subjects of application include both common consumer goods and many types of domestic services.”
In order to support the economy, the National Assembly has issued Resolution No. 204/2025/QH15 June 17, 2025. On that basis, the Government issued Decree 174/2025/ND-CP June 30, 2025, regulations continue to reduce 2% VAT for a number of groups of goods and services subject to VAT rate 10%.
New point of VAT Law 2024 is to expand the scope to services provided by foreign suppliers through e-commerce and digital platforms for individuals and organizations in Vietnam. This regulation helps manage revenue sources in the digital economy and ensure fair competition.
VAT tax rate 8%
According to Clause 2, Article 1, Decree 174/2025/ND-CPThe Government implements a policy of reducing VAT rates according to Resolution 204/2025/QH15This policy aims to support businesses, business households and consumers, while reducing costs in production and circulation of goods.
For establishments applying the deduction method, the VAT rate from 10% will be adjusted down to the VAT rate of 8% for some groups of goods and services. This reduction helps businesses save costs, expand production and improve competitiveness.
For business households and individuals paying tax at the rate of %, the policy stipulates a reduction of 20% in the rate used to calculate VAT when issuing invoices. This is an indirect reduction but still ensures benefits, suitable for the characteristics of small businesses.
From 01/07/2025, many types of goods and services that are subject to VAT rate 10% will be reduced to VAT rate 8%. However, items included in Appendix I and Appendix II belong to Decree 174/2025/ND-CP remain the same, ensuring tax reduction policy is focused.
Summary table of VAT rates and practical examples
To help businesses and individuals easily visualize how to apply VAT rates in practice, below is a summary table of current tax rates with applicable subjects, illustrative examples and specific conditions. This table not only clarifies the differences between VAT rates 0%, 5%, 8% and 10%, but also provides practical situations for readers to easily compare, thereby applying accurately and limiting the risk of errors when declaring taxes.
| VAT RATE | APPLICABLE SUBJECTS | REAL EXAMPLE | CONDITIONS/NOTES |
| 0% | Exported goods and services; international transportation; construction and installation in duty-free zones; goods sold at duty-free shops | Company A exports rice to the Philippines; logistics company transports goods to Singapore. | Need contract, cleared customs declaration, bank payment documents |
| 5% | Essential goods and services for life, agriculture, health, education | Company B sells fertilizer; hospitals buy medicine; schools buy textbooks. | To reduce living expenses and support social security; the scope of application is clearly listed in the law. |
| 8% | Groups of goods and services previously subject to 10% but reduced in 2025–2026: industry, construction, accommodation, food and beverage, transportation... | Hotel business and construction company for civil housing | Not applicable to banking, real estate, telecommunications, mining, insurance, securities and goods subject to special consumption tax. |
| 10% | Most of the remaining goods and services: trade, real estate, general services, consumer industry | Real estate businesses sell apartments; network operators provide telecommunications services; supermarkets sell consumer goods | Standard tax rate, most common; ensures budget revenue |
See more articles at: Latest Value Added Tax Law 2025 and VAT rates from July 1, 2025
How to look up VAT rates
Source for looking up VAT rates
To determine the correct applicable tax rate, businesses can rely on official legal sources. First, consult VAT Law 2024 and implementing decrees, especially Decree 181/2025/ND-CPSecond, update circulars of the Ministry of Finance and the General Department of Taxation, which regularly issue detailed documents on the list of goods and services to which each level applies.
In addition, businesses can use the search tool on the General Department of Taxation's Electronic Information Portal, which integrates a system of documents and practical instructions. When unclear cases arise, businesses should send a request to the direct tax authority for written instructions to avoid legal risks.
In practice, many businesses are penalized for applying the wrong tax rate due to lack of updates on new regulations. Therefore, it is necessary to regularly look up and pay attention to the effective period of the policy (for example, VAT rate 8% is only applicable until the end of 2026).
Steps to look up VAT rates
To perform look up VAT ratesFirst of all, businesses need to:
- Step 1: Accurately identify the industry code of the goods and services being traded. Correctly identifying the industry code is an important step, because this is the basis for applying the correct tax rate according to legal regulations.
- Step 2: After having the industry code, continue to compare with the categories in Appendix I and Appendix II issued together. Decree 174/2025/ND-CP. If the industry code appears in these two appendices, the goods or services will not be subject to the new tax reduction policy.
On the contrary, when the industry code is not included in the above appendices, goods and services subject to VAT rate 10% will be reduced to VAT rate 8%. This is an important principle that helps businesses be proactive in the process of looking up VAT rates and calculating costs.
See more articles at: VAT declaration and payment – MAN
Conclude
VAT rates are an important element in the indirect tax system, directly affecting the financial obligations of enterprises as well as the prices of goods and services on the market. Currently, Vietnam applies four VAT rates including 0%, 5%, 8% and 10%, clearly defined for each specific group of goods and services.
Determining and applying the correct VAT rate not only helps businesses comply with the law, avoid the risk of collection and penalties, but also creates a solid foundation for cost management and business strategy development. The policy of reducing the VAT rate 8% until the end of 2026 also shows the State's efforts to accompany businesses and consumers in the context of many economic fluctuations.
To ensure compliance and optimize benefits of VAT deduction and refund, businesses need to regularly update legal documents, use official search tools and proactively communicate with tax authorities. During this process, MAN – Master Accountant Network ready to become a trusted partner, supporting businesses from policy consulting, tax rate review to implementing effective accounting - tax solutions. Please contact us to accompany and protect the maximum legal rights of your business.
Contact information:
- Company: MAN – Master Accountant Network
- Address: No. 19A, Street 43, Tan Thuan Ward, Ho Chi Minh City
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- E-mail: man@man.net.vn
