How to calculate VAT in Vietnam
1. What is VAT?
Value Added Tax (VAT, thuế giá trị gia tăng) is an indirect tax on the value added to goods and services at each stage from production to consumption. The final consumer ultimately bears the tax.
2. Adding VAT to a price
When you have a price before VAT and need the invoice total:
VAT = Price before VAT × VAT rateTotal = Price before VAT × (1 + VAT rate)
Example: a laptop costs 10,000,000 ₫ before 10% VAT. VAT is 1,000,000 ₫ and the total is 11,000,000 ₫.
3. Removing VAT from a total
When the invoice shows a VAT-inclusive total and you need the net price and VAT:
Price before VAT = Total ÷ (1 + VAT rate)VAT = Total − Price before VAT
Example: a restaurant bill of 1,080,000 ₫ includes 8% VAT. The price before VAT is 1,080,000 ÷ 1.08 = 1,000,000 ₫ and the VAT is 80,000 ₫.
4. Legal basis
- Law on Value Added Tax No. 48/2024/QH15, in force since 1 July 2025.
- Resolution 204/2025/QH15 and Decree 174/2025/ND-CP: VAT reduced from 10% to 8% for most goods and services from 1 July 2025 to 31 December 2026, excluding telecoms, finance, banking, insurance, real estate, metals, mining and goods subject to special consumption tax (except petrol).
Frequently asked questions
How do I remove VAT from a price in Vietnam?
Divide the VAT-inclusive total by (1 + VAT rate). For 10% VAT divide by 1.10, for 8% VAT divide by 1.08. The difference between the total and the result is the VAT amount.
What are the VAT rates in Vietnam?
The standard rate is 10%. A reduced 8% rate applies to many goods and services under the government VAT reduction policy, 5% applies to essentials such as clean water, medical equipment and teaching aids, and 0% applies to exports.
Which goods are not eligible for the 8% reduced rate?
The reduction generally excludes telecommunications, finance, banking, securities, insurance, real estate, metals and chemical products, among others. Check your business line before applying 8%.