Vietnam ends tax-free status for low-value imports sent via express services
From February 18, 2025, Vietnam will end import duty and VAT exemptions for goods valued under VND1 million(US$40) sent via express delivery, under a new government directive.
Decision 01 ends previous tax exemptions
Deputy Prime Minister Ho Duc Phoc signed Decision No. 01/2025/QD-TTg (Decision 01) on January 3, 2025, repealing Decision No. 78/2010/QD-TTg, which had allowed duty-free import for goods valued at 1 million VND or less. Decision 01 will take effect on February 18, 2025.
Previously, under Decision 78, goods imported via express delivery valued up to VND1 million were exempt from import duty and VAT. Goods exceeding this value were subject to applicable taxes.
When introduced in 2010, Decision 78 aimed to streamline customs processes during a time when declarations were manually handled. The tax exemption helped reduce administrative burdens and sped up clearance for low-value shipments.
However, with the rapid growth of e-commerce, particularly cross-border trade, the policy has become less relevant. Each day, an estimated 4-5 million low-value orders are shipped from countries like China to Vietnam via e-commerce platforms.
Modernizing customs procedures
The automated customs management system (VASSCM) has significantly enhanced efficiency, simplifying the clearance process and minimizing delays at ports and warehouses. Over 99% of customs declarations are now processed electronically through Vietnam’s automated clearance system (VNACCS/VCIS), making the system more capable of handling large volumes of daily declarations.
This modernization has improved tax collection for express-delivered goods, allowing for centralized and rapid processing without disrupting trade activities.
Critics of the previous tax exemptions noted disparities between imported and domestically produced goods. While local products are subject to VAT, imported goods under VND1 million via express delivery were exempt, creating an uneven playing field.
The exemption encouraged price imbalances, affecting the competitiveness of local goods. Decision 01 aims to address these concerns by ensuring consistent taxation, supporting domestic production, and promoting fair competition.
The repeal of Decision 78 aligns with Vietnam’s broader tax reform strategy to comprehensively cover all revenue sources, expand the tax base, and ensure sufficient and equitable tax collection.
By implementing Decision 01, the government seeks to harmonize tax policies for small-value imported goods with international standards and encourage consumption of locally produced goods.
