On the morning of October 29, Le Quang Manh, Chairman of the National Assembly's Finance and Budget Committee, presented the proposed amendments to the VAT Law.

The amendments address tax thresholds for businesses, including discussions on VAT exemptions for goods and services below certain revenue levels.

According to Chairman Manh, the Standing Committee supports including a provision in the law specifying that households and individual businesses with annual revenue of 200 million VND or less are exempt from VAT.

One notable suggestion in the discussion was the 0% tax rate on digital content products exported via digital platforms. Some lawmakers recommended applying the 0% rate only to non-entertainment digital content exports, citing concerns over the verification of foreign consumption.

The Standing Committee pointed out that the current law already allows for a 0% VAT on all exported digital content, which supports the growth of Vietnam’s digital sector - a field with strong export potential. Numerous Vietnamese businesses, particularly in digital content creation, have expressed the need for such incentives to maintain a competitive edge internationally.

The Committee emphasized that removing the 0% VAT rate for entertainment-related digital exports could reduce Vietnam’s competitive standing in the global digital market. Such a move would counter ongoing national efforts to promote and develop Vietnam's digital services sector.

The Committee acknowledged concerns regarding the verification of foreign consumption for these services. However, they suggested that this issue could be addressed through legal documentation requirements. Exporting businesses would be required to provide evidence that the content has been consumed abroad, as outlined in the implementation guidelines for the law.

Thus, the Committee proposed maintaining the current 0% VAT for exported digital content, specifying this in the draft law to streamline implementation.

In addition, Chairman Manh noted that some lawmakers agreed with a provision in the draft law to apply a 5% VAT on fertilizers, which are currently VAT-exempt. Others, however, expressed concern that taxing fertilizers at 5% could increase overall fertilizer costs, affecting farmers and the agricultural sector’s production costs.

To address these concerns, the Standing Committee proposed keeping the current policy as outlined in the draft law previously submitted to the National Assembly in its 7th session.

Quang Phong