Vietnam Issues Unified Guidance on VAT for Re-exported Goods

On July 23, Vietnam Customs issued an urgent dispatch to its regional Customs branches, providing unified guidance on the application of Value Added Tax (VAT) for temporarily imported and re-exported goods. This directive comes after some units reported difficulties in the implementation process. The purpose of this dispatch is to ensure consistent policy implementation regarding VAT application. In Vietnam, the smooth flow of imported and exported goods and stable tax revenue are key to economic growth. In particular, the increase in manufacturing and import-export activities significantly contributes to national finances. As of May this year, revenue from import-export activities reached VND 215.14 trillion, reflecting the strong economic performance. This unification of VAT application policy aims to enhance the transparency and efficiency of trade procedures and support business activities. Under its single-party system, Vietnam prioritizes economic growth, focusing on attracting foreign investment and promoting export industries. Especially with strong economic ties to China, stabilizing trade policies is crucial for maintaining and strengthening supply chains. Customs authorities are also focusing on digitalization and information sharing for trade facilitation, including the widespread deployment of vehicle management software at border gates and information on chemical component declarations during import-export procedures.