On 14 June 2025, the National Assembly of Vietnam officially passed the amended Law on Corporate Income Tax 2025 (“Law on CIT 2025”), demonstrating the State’s strong commitment to enhancing support for the private sector, particularly small and medium-sized enterprises (“SMEs”), and promoting the conversion of household businesses into enterprises. This is one of the key measures to implement Resolution 68-NQ/TW, reaffirming the private sector as a significant driver of the national economy.

Under the current legal framework, a uniform 20% corporate income tax (CIT) rate is applied to all enterprises, regardless of size or revenue. This, to some extent, has not encouraged the growth of SMEs, as the tax burden does not align with the financial capacity of this type of enterprise. To promote SME development, the Law on CIT 2025 introduces two preferential tax rates: a 15% tax rate applicable to enterprises with total annual revenue not exceeding VND 3 billion, and a 17% tax rate applicable to enterprises with total annual revenue exceeding VND 3 billion but not exceeding VND 50 billion. However, to prevent large enterprises from establishing SME subsidiaries solely to take advantage of these preferential tax rates, the law stipulates that such rates will not apply to subsidiaries or affiliated enterprises if the remaining enterprises within the affiliated group do not simultaneously meet the revenue criteria mentioned above. The implementation of preferential tax rates for SMEs is expected to provide significant financial support to the private sector, enabling SMEs to retain more capital for reinvestment and business expansion.

To facilitate the operations of small enterprises and reduce their compliance burdens concerning accounting and tax obligations, the Law on CIT 2025 also introduces a simplified tax calculation method based on a percentage of revenue. Accordingly, enterprises with total annual revenue not exceeding VND 3 billion are permitted to choose the method of declaring and paying CIT based on a fixed percentage of their revenue. The applicable rates vary depending on business activities: 0.3% for the distribution and supply of goods; 1.2% for manufacturing, transportation, services associated with goods, and construction activities where the contractor supplies materials; 1.5% for services and construction activities where the contractor does not supply materials; 4% for property leasing, insurance agency, lottery agency, and multi-level marketing agency activities; and 0.5% for other activities. This policy is anticipated to reduce compliance burdens and accounting costs while aligning with the small scale and limited management capacity of these enterprises.

Another notable point of the Law on CIT 2025 is the corporate income tax exemption for enterprises formed through the conversion of household businesses, aiming to encourage household businesses to convert into enterprises in line with the Government’s policies. Specifically, enterprises established through the conversion of household businesses, with total annual revenue not exceeding VND 50 billion, will be exempt from CIT for two consecutive years starting from the first year they generate taxable income. To ensure this tax exemption policy is applied to the appropriate beneficiaries, the law requires that household businesses must have operated continuously for at least 12 months before converting into an enterprise. Additionally, this exemption will not apply if the newly converted enterprise has its legal representative, largest capital-contributing member, or general partner simultaneously holding one of these positions in another operating enterprise or in another enterprise that was dissolved within 12 months prior to the registration date for the conversion.

Overall, the Law on CIT 2025 brings groundbreaking reforms, marking a significant step in improving the business environment, enhancing competitiveness, and promoting sustainable development for the private sector in Vietnam. The new policies will provide substantial support to SMEs, particularly household businesses transitioning into formal enterprises, thereby expanding the formal economy and contributing to long-term economic growth.

The Tax Sub-Department of Region XVI has issued Official Letter 7629/CCTKV. XVI-QLDN  dated 14/5/2025 to provide guidance to enterprises on resolving certain issues related to invoice issuance in cases involving the sale of shopping vouchers.

According to current regulations, invoices for the sale of goods must be issued at the time ownership or usage rights are transferred, regardless of whether payment has been received. However, shopping vouchers are not considered goods or assets. Therefore, when an enterprise sells shopping vouchers to customers, it is only required to issue a receipt for the amount collected and is not required to issue a VAT invoice at the time of voucher sale. Instead, a VAT invoice is only issued when the customer uses the shopping voucher to exchange for goods, based on the time when the ownership or the right to use the goods is transferred to the customer.

As part of efforts to implement the revised 2024 Law on Value-Added Tax, the Ministry of Finance is developing a Draft Decree (“Draft”) that aims to clarify and operationalize new VAT regulations. The Draft is expected to improve tax transparency, strengthen administrative oversight, and assist businesses in achieving compliance. Key proposals under the Draft include several significant adjustments.

One notable change is the proposed reduction in the threshold for non-cash payments required to qualify for input VAT deductions. Currently, a non-cash payment is required for purchases of VND 20 million or more. The Draft lowers this threshold to VND 5 million (including VAT), reflecting a stricter approach to discourage tax fraud and enhance traceability in transactions.

The Draft also introduces clearer definitions for goods and services not subject to VAT. For instance, preliminary processed agricultural products are now defined as items that have undergone basic processes such as milling, peeling, drying, canning, or preservation using inert gases or sulfur. This clarification aims to help taxpayers and authorities more clearly identify qualifying VAT-exempt agricultural goods. Additionally, the Draft proposes extending VAT exemption to include artificial products that replace human body parts, as well as imported goods classified as relics, antiques, and national treasures in accordance with legal provisions. These clarifications are expected to facilitate more consistent interpretation and application of VAT exemptions.

Regarding VAT for promotion, under current regulations, promotional goods and services provided free of charge have a taxable price of zero. However, ambiguity remains for cases involving price reductions during promotions. To address this, the Draft specifies that the VAT taxable price in such instances shall be the discounted price applied during the registered or notified promotional period under commercial law.

To support businesses involved in supplying goods and services taxed at the 5% VAT rate, the Draft introduces new provisions for VAT refunds. Enterprises exclusively conducting 5% VAT activities may claim a refund if accumulated uncredited input VAT reaches VND 300 million or more over a 12-month period. Businesses with mixed VAT activities (5% and other rates) may also qualify for refunds if they can account separately for input VAT related to their 5% VAT-rated activities, and the threshold of VND 300 million is met.

In general, the Draft aims to provide clearer guidance and more consistent enforcement of the new VAT Law. The proposed amendments balance the objectives of effective tax administration with the need to simplify procedures and support business operations. If adopted, these changes are expected to facilitate smoother implementation of the VAT law and reduce interpretive uncertainties for both taxpayers and tax authorities. 

The cosmetics sector in Vietnam is currently governed primarily by Decree No. 93/2016/ND-CP, Circular No. 06/2011/TT-BYT, and related legal documents. However, over time, these regulations have revealed significant gaps with substandard cosmetic products continuing to circulate openly in the market, posing risks to consumer health and undermining fair competition.

In response to these issues, the Ministry of Health is developing the first draft of a new Decree on Cosmetics Management (“Draft”) which seeks to strengthen the regulatory framework. The Draft introduces a range of proposed changes to improve oversight, address existing shortcomings, and promote a more transparent and equitable business environment in the cosmetics industry. 

One of the major focuses of the Draft is the tightening of regulations on cosmetic advertising. To prevent misleading or deceptive cosmetic advertisements, the Draft proposes to prohibit the use of images, uniforms, or names of doctors, pharmacists, healthcare professionals, or medical facilities in cosmetic advertisements. Additionally, the use of certain terms such as “treatment,” “heals immediately,” “eradicates,” “cures,” “permanently cured,” “kills viruses,” “kills fungi,” “fat reduction,” “weight loss,” and similar phrases in cosmetic advertising will be banned. These proposal are aimed at preventing cosmetics from being mistaken for medicinal products and enhancing the clarity and reliability of advertising content. While these stricter rules may initially challenge businesses in revising their promotional strategies, they are expected to support a healthier competitive environment and protect consumer interests.

The Draft also proposes enhanced requirements for cosmetic manufacturing facilities. Specifically, the Draft requires each facility to appoint a full-time quality assurance officer with a university degree in a relevant field, specialized training in cosmetic quality management, and at least two years of relevant experience. In terms of infrastructure, the Draft sets out more detailed and specific standards for ventilation, lighting, water systems, and equipment used in the manufacturing process, aiming to raise safety and quality benchmarks across the industry.

Moreover, in contrast to the current regulations, which only require the appointment of a production supervisor with relevant expertise, the Draft goes further by requiring that all personnel directly involved in the production process must possess appropriate professional knowledge, experience, skills, and competence consistent with the scale of the facility. Furthermore, these personnel must be trained in manufacturing procedures in accordance with CGMP principles. 

Significant changes are also proposed to the cosmetic product notification process. Under the current framework, a receipt number must be issued within three working days from the date a valid dossier is submitted, and remains valid for five years. The Draft, however, proposes to extend this processing period to ten working days and reduce the validity of the receipt number from five years to three. According to the Ministry, this adjustment is consistent with international practice, where the validity period often ranges from one to three years.

Overall, the Draft introduces more specific and detailed regulations compared to the current framework, reflecting the Ministry of Health’s efforts to address existing shortcomings and elevate the regulatory standards for the cosmetics sector. If adopted, the new regulations will likely extend the time required for cosmetic notification procedures and place greater restrictions on advertising activities. However, in the long run, the Draft is expected to help establish a more transparent, equitable, and stable business environment.