LEGAL UPDATE – NOTABLE NEW REGULATIONS TAKING EFFECT FROM 01 JULY 2025

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01 July 2025 is a significant milestone marking considerable changes in the Vietnamese legal system. A series of new laws have been enacted, amended, supplemented, and provided with detailed guidance, spanning numerous fields such as criminal law, tax, healthcare, insurance, court organization, and the legal profession. These changes not only directly impact the operations of state agencies but also have a profound effect on the legal lives of businesses and citizens. This article summarizes several prominent policies to help readers promptly grasp the new regulations and ensure effective legal compliance.

A. CHANGE IN AUTHORITY TO ISSUE AND REVOKE LAWYERING PRACTICE CERTIFICATES

According to Clause 3, Article 17 and Clause 2, Article 18 of the Law on Lawyers 2006 (amended and supplemented in 2012), the Minister of Justice has the authority to issue Lawyering Practice Certificates:

“Within twenty days from the date of receiving a complete and valid application dossier, the Minister of Justice shall decide to issue a Lawyering Practice Certificate; in case of refusal, a written notification must be issued, clearly stating the reasons, to the applicant and the Department of Justice where the application was submitted.”

“The Minister of Justice has the authority to revoke a Lawyering Practice Certificate and shall regulate the procedures for its revocation.”

However, according to Clause 1, Article 9 and Clause 1, Article 10 of Decree No. 121/2025/NĐ-CP, which regulates the delegation and decentralization of state management in the justice sector, the authority to issue and revoke Lawyering Practice Certificates will be transferred to the Chairperson of the provincial-level People's Committee, and will no longer be under the purview of the Minister of Justice. Decree No. 121/2025/NĐ-CP will take effect on 01 July 2025.

B. CHANGES IN THE ORGANIZATION OF THE PEOPLE'S COURTS

According to Clause 1, Article 4 of the Law on the Organization of People's Courts 2024, the People's Courts system comprises: the Supreme People's Court, the High People's Courts, the provincial-level People's Courts, the district-level People's Courts, specialized first-instance People's Courts (Administrative, Intellectual Property, Bankruptcy), and the Military Courts (the Central Military Court, military courts of military zones and equivalent, and regional military courts). This is also known as the four-tiered court model.

However, on 24 June 2025, the 15th National Assembly voted to pass the Law Amending and Supplementing a Number of Articles of the Law on the Organization of People's Courts 2024, including Article 4, which will change the organization of the People's Courts as follows: the Supreme People's Court, the provincial-level People's Courts, the regional People's Courts, the specialized Courts, and the Military Courts (the Central Military Court, military courts of military zones and equivalent, and regional military courts). Thus, the new court model will only consist of three tiers; the High People's Courts and the district-level People's Courts will be dissolved and cease operations. This Law takes effect on 01 July 2025.

C. ABOLITION OF THE DEATH PENALTY FOR EIGHT OFFENSES

On June 25, 2025, the 15th National Assembly passed the Law Amending and Supplementing a Number of Articles of the Criminal Code, which includes the abolition of the death penalty for eight offenses. These offenses include: Embezzlement of property (Article 353); Taking bribes (Article 354); Illegal transportation of narcotic substances (Article 250); Activities aimed at overthrowing the people's administration (Article 109); Espionage (Article 110); Sabotaging the material and technical foundations of the Socialist Republic of Vietnam (Article 114); Manufacturing or trading in counterfeit goods that are curative or preventive medicines (Article 194); and Undermining peace, instigating aggressive war (Article 421).

This Law takes effect on 01 July 2025. The transitional provisions in the Law also state that for death sentences already pronounced for these eight offenses but not yet executed, the execution shall not be carried out. The Chief Justice of the Supreme People's Court will decide to commute the death sentence to life imprisonment.

D.   KEY AMENDMENTS TO THE LAW ON VALUE ADDED TAX 2024

The Law on Value Added Tax 2024, which will take effect on 01 July 2024, replacing the Law on Value Added Tax 2008, introduces several new points:

            First, regarding taxpayers, it supplements regulations for taxpayers involved in e-commerce and digital platform-based business activities. This includes, for example, foreign suppliers without a permanent establishment in Vietnam who conduct e-commerce or digital platform-based business with organizations and individuals in Vietnam, and organizations acting as e-commerce trading floor managers or digital platform managers with payment functions.

            Second, regarding goods and services not subject to VAT, it removes certain items from the non-taxable list (e.g., fertilizers, machinery and equipment specialized for agricultural production, offshore fishing vessels, securities depository services) and adds others (e.g., imported goods for donation or sponsorship for the prevention, control, and overcoming of disasters, natural calamities, epidemics, and wars as prescribed by the Government). It also raises the annual revenue threshold for VAT exemption for business households and individuals from 100 million VND to 200 million VND.

            Third, regarding goods and services subject to the 0% tax rate, it adds clear provisions that exported goods and services are those supplied directly to organizations or individuals abroad and consumed outside of Vietnam; or supplied directly to organizations in non-tariff zones and consumed within such zones to directly serve export production activities. It also adds that digital information content products supplied to foreign parties, with supporting documents proving consumption outside Vietnam as prescribed by the Government, are subject to the 0% tax rate.

            Fourth, regarding goods and services subject to the 5% tax rate, it specifies that traditional and folk performing arts are subject to the 5% rate. Additionally, it supplements principles for applying tax rates in cases where a business trades in multiple types of goods and services with different VAT rates or where agricultural products are used as animal feed or medicinal materials, to ensure uniform application and avoid differing interpretations.

            Fifth, it adds a provision for promotional goods. Specifically, the taxable price for goods and services used for promotion in accordance with the law on commerce is determined to be zero. This provision was not present in the Law on Value Added Tax 2008.

E. 2% REDUCTION IN VALUE ADDED TAX UNTIL THE END OF 2026

Resolution No. 204/2025/QH15 on the reduction of value-added tax stipulates a 2% reduction in VAT until the end of 2026, with the following content:

“A 2% reduction in the value-added tax rate shall be applied to groups of goods and services specified in Clause 3, Article 9 of the Law on Value Added Tax No. 48/2024/QH15 (to a remaining 8%), with the exception of the following groups of goods and services: telecommunications, financial activities, banking, securities, insurance, real estate business, metal products, mineral products (excluding coal), and goods and services subject to special consumption tax (excluding gasoline).”

Resolution No. 204/2025/QH15 is effective from 01 July  2025 to the end of 31 December 2026.

F.    NEW POLICIES FOR BUSINESS HOUSEHOLDS

In the near future, business households will need to prepare for a series of changes regarding the following issues:

• Tax management using personal identification numbers. Taxpayers, relevant agencies, organizations, and individuals will use personal identification numbers instead of tax identification numbers (Circular No. 86/2024/TT-BTC).

• Owners of business households will be subject to compulsory social insurance (Law on Social Insurance 2024).

• Business households with an annual revenue of 1 billion VND or more must issue e-invoices from cash registers (Decree No. 70/2025/NĐ-CP).

  
  

G. ADDITIONS AND CHANGES TO GOODS SUBJECT TO SPECIAL CONSUMPTION TAX

On June 14, 2025, the 15th National Assembly passed the Law on Special Consumption Tax (Amended), which includes notable content regarding goods subject to this tax.

            First, sugar-sweetened beverages. Products classified as sugar-sweetened beverages are those within the definition of beverages under the Vietnam Standards (TCVN) with a sugar content exceeding 5g/100ml. This does not include beverages such as milk and milk products, liquid foods for nutritional purposes, natural mineral water and bottled water, pure fruit and vegetable juices, fruit and vegetable nectars, and cocoa products. Accordingly, products like natural fruit juices, coconut water, milk products, and liquid foods for nutritional purposes are not subject to special consumption tax.

            Second, air conditioners with a capacity from over 24,000 BTU to 90,000 BTU will be subject to special consumption tax. The previous regulation subjecting air conditioners with a capacity of 90,000 BTU or less to the tax is no longer in effect. This means that air conditioners with a capacity of 24,000 BTU or less and those with a capacity over 90,000 BTU (typically used in industrial settings or very large spaces) will not be subject to special consumption tax.

H. USE OF ORGANIZATIONAL ELECTRONIC IDENTIFICATION ACCOUNTS FOR ELECTRONIC TAX TRANSACTIONS

According to Article 40 of Decree No. 69/2024/NĐ-CP, accounts created by the National Public Service Portal or the administrative procedure processing information systems at the ministerial and provincial levels for agencies and organizations may be used until the end of 30 June 2025. Consequently, from 01 July 2025, accounts that organizations and businesses have registered on the National Public Service Portal or the ministerial and provincial administrative procedure processing systems will no longer be usable. Instead, they will begin using electronic identification accounts to access the National Public Service Portal and the administrative procedure processing information systems at all levels to handle administrative procedures as prescribed.

However, to date, many businesses have not yet completed the procedures for obtaining an electronic identification account, causing many difficulties for them in handling administrative procedures in general and electronic tax transactions in particular.

According to Official Letter No. 2065/CT-NVT dated 26 June 2025, from the Tax Department regarding the implementation of using personal identification numbers instead of tax codes and using organizational electronic identification accounts for electronic tax transactions, the guidance is as follows:

“In the event that by 01 July 2025, a taxpayer is in the process of applying for an electronic identification account but has not yet been granted one by the Ministry of Public Security, or in the case of a foreign individual or an organization whose legal representative is a foreign national who has not yet been granted an electronic identification account due to the implementation schedule of the Ministry of Public Security, the taxpayer shall continue to fulfill their obligations to the State Budget through their electronic tax account, provided they meet the regulations of the Law on Tax Administration and the Law on Electronic Transactions, until they are issued an electronic identification account in accordance with the implementation roadmap of the Ministry of Public Security.”

Thus, according to the guidance above, businesses that have not yet completed the procedure for obtaining an electronic identification account can confidently proceed with electronic tax transactions using their existing electronic tax accounts until the electronic identification procedure is completed.

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Disclaimer:

This article

• reflects the author's subjective viewpoint on the main topic mentioned in this article, providing the best reference value at the time of publishing;

• is not considered the viewpoint or opinion of any state agency in any case; and

• does not constitute legal advice from Minh Thien Law and should not be applied to resolve any specific legal situation.

  
  

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