Our long-standing GBA board member Dr. Oliver Massmann, Partner at Duane Morris Vietnam LCC, is sharing the most relevant legal updates with you.
- Government specifies conditions for foreign drivers, vehicles operating in Vietnam
- ID numbers to be used as personal tax code
- Goods valued below $39 to be taxed for express delivery starting Feb. 18
- VAT reduction extended till June 30, 2025
- Semiconductor progress to hinge on incentives
1. Government specifies conditions for foreign drivers, vehicles operating in Vietnam
Some highlines are as below:
- From January 1, 2025, foreign tourists can bring a variety of motor vehicles into Vietnam, including passenger cars, whether right-hand or left-hand drive, capable of carrying up to eight passengers (excluding the driver), mobile home vehicles, and two-wheeled motorcycles.
- Such is a salient point of Government Decree 151/2024/ND-CP dated November 15, detailing a number of articles of, and measures to implement, the Law on Road Traffic Order and Safety.
- Specifically, all foreign motor vehicles operating in Vietnam must have a valid registration certificate and license plate from their country of origin, along with a valid certificate of technical safety and environmental protection, or equivalent documentation issued by the relevant authorities of the country of registration, particularly for motor vehicles.
- Notably, those entering Vietnam under the unilateral visa exemption policy must ensure their passport is valid for at least six months. Electronic visa holders must enter through designated international checkpoints and comply with Vietnam’s immigration regulations.
- Moreover, foreign drivers must be prepared to present essential documents upon request from local authorities. These include their passport or internationally recognized travel document, residence document in Vietnam, a valid driver’s license, a certificate of technical safety and environmental protection for the vehicle, a valid vehicle registration certificate, a civil liability insurance certificate for the motor vehicle in Vietnam, and a customs declaration for temporarily imported or re-exported vehicles.
2. ID numbers to be used as personal tax code
Some highlines are as below:
- The Government News on December 30 quoted the Ministry of Finance as reporting that since July 1, 2025, citizen identification numbers shall be used as personal tax codes in a bid to streamline tax data for the national database on population.
- This is part of the ministry’s Circular 86/2024/TT-BTC, dated December 23, 2024, on tax registration regulations in lie with Article 35 of the Law on Tax Management.
- Circular 86 shall take effect from February 6, 2025, replacing Circular 105/2020/TT-BTC, dated December 3, 2020. With this new Circular, tax codes issued by tax authorities to individuals, households, and business households shall be valid until June 30, 2025.
- From July 1, 2025, personal identification numbers will replace tax codes for households, businesses, individuals, and dependents.
The personal identification number of a Vietnamese citizen is a 12-digit number issued by the Ministry of Public Security. The personal identification number of the representative of a household, representative of a business household, or individual business is also used in place of the tax code of that household, business household, or individual business. - People can search their identification numbers on the VNeID application or at dichvucong.dancuquocgia.gov.vn.
For children, the identification number will be displayed on the birth certificate.
3. Goods valued below $39 to be taxed for express delivery starting Feb. 18
Some highlines are as below:
- Imported goods to be sent via express delivery services valued at VND1 million (over $39) or less will no longer be exempt from import tax and value-added tax, as from February 18, accrding to Prime Ministerial Decision No. 01/2025/QD-TTg (Decision 01), signed by Deputy Prime Minister Ho Duc Phoc on January 3.
- Decision 01 abolishes entirely Decision No. 78/2010/QD-TTg (Decision 78), dated November 30, 2010, which set the value threshold for tax exemption on imported goods sent via express delivery services.
Under Decision 78, imported goods sent via express delivery services with a value of VND1 million or less were exempt from import tax and value-added tax. - According to the Ministry of Finance, when Decision 78 was issued, customs supervision was manually conducted. The tax exemption policy helped reduce administrative procedures, expedite customs clearance, and decrease the number of goods subject to tax declaration and payment.
- However, this policy is no longer suitable due to the rapid growth of e-commerce globally and in Vietnam in recent years, the ministry said. It reported that approximately 4-5 million small-value orders are shipped from China to Vietnam daily through e-commerce platforms.
4. VAT reduction extended till June 30, 2025
Some highlines are as below:
- The VAT reduction is extended under Government Decree No. 180/2024/ND-CP, dated December 31, 2024.
- The value-added tax (VAT) shall be reduced to 8 per cent from 10 per cent in the first six months of 2025, according to Government Decree No. 180/2024/ND-CP, dated December 31, 2024.
- The Government News quoted the Decree as reporting that the new tax policy shall be applied to groups of goods and services currently subject to a tax rate of 10 per cent, except for the following groups of goods and services:
– Telecommunications, financial activities, banking, securities, insurance, real estate business, metals and prefabricated metal products, mining products (excluding coal mining), coke, refined petroleum, chemical products.
– Goods and services subject to special consumption tax.
– Information technology according to the law on information technology. - As the policy is applied in the first half of 2025, it would result in a budget deficit of around VND26.1 trillion (over $1.02 billion), the Government estimated. The 2 per cent reduction in VAT has been initially introduced since 2022 to aid economic growth following the COVID-19 pandemic.
5. Semiconductor progress to hinge on incentives
Some highlines are as below:
- The latest draft of the Law on Digital Technology Industry has been revised and will likely create a competitive advantage for the semiconductor industry, if adopted.
- Le Quang Huy, Chairman of the NA Committee on Science, Technology, and Environment, highlighted some new preferential policies for the semiconductor industry in the draft. Specifically, Article 44 stipulates that the actual cost for research and development (R&D) in the semiconductor industry is calculated at 150 per cent when determining taxable income for corporate income tax (CIT).
- The article also stipulates that the state directly supports costs not exceeding 10 per cent of the total investment in building factories, technical infrastructure, and machinery and equipment from the budget for development expenditures.
- Article 59 stipulates and supplements incentives and funding support into the Law on Investment for key digital technology products and R&D, as well as the design, manufacturing, packaging, and testing of semiconductor products.
- The Law on Digital Technology Industry is expected to be approved by the NA at the ninth session in May.