Decree 144/2026/ND-CP: Essential VAT Amendments for Businesses in Vietnam

Operating a business in Vietnam requires constant vigilance regarding corporate compliance and tax regulations. The regulatory landscape evolves rapidly to match the country’s dynamic economic growth. Just days ago, on June 20, 2026, a major shift in tax policy officially took effect.

The Vietnamese Government issued Decree No. 144/2026/ND-CP, which amends and supplements several crucial provisions of the previous Decree No. 181/2025/ND-CP. This new legal document details the implementation of the Law on Value-Added Tax. Implementing the latest VAT Amendments into your daily corporate operations is an absolute priority for every foreign investor, chief financial officer, and business owner currently operating in the country.

Whether your foreign direct investment enterprise operates in insurance, finance, international trading, or heavy manufacturing, understanding these VAT Amendments is not optional. They directly impact which entities are completely exempt from tax, the precise conditions required to claim input tax deductions, and the strict non-cash payment requirements you must follow.

1. How the VAT Amendments Expand Exemptions: New Opportunities

One of the most significant and welcome changes introduced by these VAT Amendments is the broad expansion of the list of goods and services that are no longer subject to Value-Added Tax. This legislative update directly affects several major sectors. It opens up lucrative new business opportunities and requires immediate adjustments to your current invoicing and tax declaration practices.

A Major Expansion for Insurance Services

The new decree adds a comprehensive new category of tax-exempt insurance services. This is a massive victory for the financial and insurance sectors. The following specific insurance activities are now explicitly exempt from tax:

• Life insurance, health insurance, student insurance, and other directly human-related insurance services.
• Livestock insurance, crop insurance, and other agricultural insurance services designed to protect the farming sector.
• Insurance for ships, boats, critical equipment, and other necessary tools that directly serve the fishing industry.
• Reinsurance activities conducted strictly in accordance with the Vietnamese law on insurance business.
• Insurance for petroleum constructions, specialized equipment, and foreign-flagged oil vessels operating within Vietnamese territorial waters or designated joint exploitation zones.

Crucially, there is one specific detail that will reshape the insurance market. Brokerage commission revenue derived from these insurance services is now explicitly exempt from tax. Prior to this decree, insurance brokers and agents often operated in a grey area regarding their output tax obligations. These recent VAT Amendments finally provide absolute clarity. Insurance brokers no longer need to add a 10% tax charge to their commission invoices for these specific categories, making their services instantly more competitive in the market.

Completing the Legal Framework for Debt Trading

Decree 144 also comprehensively revises and clarifies the regulations governing debt trading activities. The government is actively working to modernize its financial sector and resolve bad debts within the banking system.

Under the new provision, full tax exemption applies directly to the sale of debt. This explicitly includes the sale of payables, the sale of receivables, and the transfer of certificates of deposit. Previously, the exemption was applied much more narrowly, causing confusion during complex financial restructuring. Financial institutions, debt management companies, and standard businesses engaged in restructuring their internal debt should immediately review their active transactions to ensure they are correctly applying this new exemption.

Are you unsure if your current accounting software and internal practices are fully compliant with the new VAT Amendments? Let our licensed experts review your books and optimize your tax strategy.

2. VAT Amendments on Exported Natural Resources

While the VAT Amendments offer generous relief in the financial and insurance sectors, the government is simultaneously tightening regulations in other specific industries. This balanced approach is designed to protect national interests and promote domestic manufacturing.

The decree amends the rules surrounding exported goods to explicitly clarify that export products consisting of unprocessed or simply processed natural resources and minerals are absolutely not subject to tax exemption. This rule applies strictly if the State’s current macroeconomic policy is to discourage or restrict the export of those specific raw materials.

The exact products covered under this restrictive rule are detailed extensively in Appendices I and II issued alongside the decree. The strategic goal here is to force companies to process raw materials locally within Vietnam, adding value to the supply chain and creating local manufacturing jobs, rather than simply extracting and exporting raw earth.

If your enterprise is involved in mining, resource extraction, or the export of minerals, your compliance team must carefully review these appendices. Exporting restricted materials will now carry a heavy tax burden, drastically altering your profit margins.

Read Related: How to Claim Tax Relief Via VAT Refund in Vietnam?

3. The Most Impactful of the VAT Amendments: Deferred Payments

For most foreign investors and standard trading companies, the absolute crown jewel of these VAT Amendments is the radical change to the rules regarding input tax deduction for goods and services purchased on deferred payment or installment terms. This single legislative change will fundamentally alter how your finance department manages cash flow.

The New Mechanism: Temporary Deduction Before Payment

Before June 20, 2026, businesses often had to wait until an actual cash transfer was made to legally claim an input tax deduction for large purchases. Under the new rules introduced by Decree 144, the government is offering a massive cash flow advantage.

For any goods and services purchased on deferred payment or installment terms with a total value of 5 million VND or more, businesses are now legally entitled to deduct the input tax immediately. To claim this early deduction, your accounting department must simply possess three things:

• A fully executed, legally binding written purchase contract detailing the deferred terms.
• The official, compliant electronic tax invoice from the supplier.
• Non-cash payment documents for the specific transaction.

The truly game-changing provision is this: in situations where non-cash payment documents are not yet available simply because the contractual payment due date has not yet arrived, your business is still legally permitted to declare and claim the input tax credit for that current tax period.

The Crucial Adjustment Mechanism

This incredible flexibility comes with a very strict compliance obligation. The internal mechanisms required by these VAT Amendments are rigorous.

Your accounting team must monitor the specific payment due date listed in your purchase contract. By the time that exact due date arrives, if your business still has not made the payment and therefore does not possess the required non-cash payment bank transfer documents, you must take immediate action. You are legally required to declare and adjust downward the exact amount of input tax that you previously credited.

If you fail to make this downward adjustment upon missing a payment deadline, the tax authority will consider the previously claimed deduction as a severe compliance violation during your next audit, resulting in heavy financial penalties.

However, the law remains fair. If your business experiences a delay, makes the required downward adjustment, and then subsequently manages to pay the supplier and obtain the non-cash payment documents a month later, you are protected. You may once again declare and claim that exact input tax credit in the new tax period when the final banking documents are physically obtained.

The Practical Impact on Your Cash Flow and Operations

This new rule is a massive, tangible win for businesses that heavily rely on deferred payment arrangements with large suppliers or equipment manufacturers. It significantly improves short-term liquidity by allowing you to deduct input tax much earlier, keeping cash inside your business rather than waiting months for a final installment payment to clear.

Imagine your manufacturing startup purchases 500 million VND of specialized machinery on a 90-day deferred payment term. Instead of waiting 90 days to claim the 50 million VND tax credit, you can claim it in the current month, freeing up critical operating capital immediately.

However, this financial benefit creates a brand new administrative burden. Your business must carefully track every single payment due date across all vendor contracts. This requires highly robust accounting software systems and flawless, daily coordination between your procurement managers, accounts payable department, and chief accountant.

4. Sector-Specific VAT Amendments for Revenue Tracking

Beyond the broad exemptions and deferred payment rules, the decree also introduces highly specific administrative tweaks. The technical guidance provided by these VAT Amendments ensures that complex industries are reporting their revenue uniformly across the country.

The new decree provides explicit instructions on exactly how to determine total revenue for the purpose of allocating input tax deductions in heavily regulated sectors.

• Credit Institutions: The revenue of domestic credit institutions and branches of foreign banks operating in Vietnam shall be calculated strictly in accordance with the specialized laws governing credit institutions, ignoring conflicting general tax definitions.
• Securities Firms: Revenue derived from securities trading and stock market activities shall be determined strictly in accordance with national securities laws.
• Insurance Providers: Revenue from insurance business activities shall be determined solely in accordance with the laws on the insurance business.

While this may seem overly technical, it resolves years of minor disputes between specialized financial firms and local tax auditors regarding the exact definition of taxable revenue.

5. Action Plan: Adapting to the New VAT Amendments

Because these VAT Amendments are already in force as of June 20, 2026, foreign investors cannot afford to delay their response. A proactive approach will not only guarantee full legal compliance but also unlock immediate tax savings and dramatically improve your local entity’s cash flow.

To properly navigate this new regulatory environment, Incorp Vietnam strongly advises all corporate directors to execute the following action plan immediately:

Step 1: Conduct a Comprehensive Invoice Review
Instruct your chief accountant to review your current billing practices. If you operate in the insurance, brokerage, or debt trading sectors, ensure you immediately stop charging output tax on the newly exempt categories. Continuing to charge tax on exempt services will result in invoicing disputes with your clients and administrative headaches with the tax portal.

Step 2: Upgrade Your Accounts Payable Systems
The ability to claim early deductions on deferred payments is powerful, but dangerous if mismanaged. You must update your internal enterprise resource planning software to automatically track contract payment due dates. Set internal alerts at least five days before a payment deadline. If the payment cannot be made, your tax team must be notified immediately to prepare the mandatory downward tax adjustment for that month’s filing.

Step 3: Audit Your Supply Chain Contracts
Review your purchasing contracts with local suppliers. Ensure that all deferred payment terms are explicitly stated in writing. Without a formal written contract clearly stating the installment terms and exact dates, the tax authority will instantly deny your early input tax deduction.

Step 4: Consult Local Experts
Tax regulations in Vietnam are highly nuanced. The penalties for claiming deductions you are not entitled to are severe, often including back taxes, daily interest charges, and administrative fines. Partnering with a licensed local tax agent ensures that your interpretation of the law exactly matches the expectations of the provincial tax departments.

Conclusion: Do Not Leave Your Tax Strategy to Chance

The rollout of Decree 144/2026/ND-CP marks a significant milestone in Vietnam’s ongoing effort to refine its fiscal policy. The expansion of exemptions shows a clear intent to support the financial and agricultural sectors, while the new deferred payment deduction mechanism proves the government is actively listening to the cash flow concerns of modern enterprises.

However, the Vietnamese tax system remains unforgiving to those who fail to maintain perfect documentation. As a foreign investor, the burden of proof always falls entirely upon your company. You must possess the contracts, the electronic invoices, the banking documents, and the meticulously maintained ledgers to justify every single deduction you claim.

By acting now, updating your internal software, and training your finance team on these exact new mechanisms, you can easily turn a complex regulatory change into a distinct financial advantage for your company.

Tracking complex deferred payment schedules and mandatory tax adjustments requires expert local knowledge. InCorp Vietnam provides end-to-end bookkeeping, payroll, and chief accountant services to keep your business profitable, compliant, and stress-free.