Overview of Key Changes in the Draft Amended Law on Tax Administration 2025: Impacts and Key Considerations for Businesses

The Draft Amended Law on Tax Administration (5th Draft) has attracted significant attention from the business community and financial professionals. With a strong orientation toward digital data–driven tax administration and voluntary compliance, the Draft introduces a number of fundamental changes compared to the current Law No. 38/2019/QH14.

Below is a summary of five key groups of changes that taxpayers should pay close attention to.

1. A Major Shift in Tax Administration for Household Businesses: Abolition of Presumptive Tax

This is considered the most significant change, affecting millions of household businesses and individual business operators in Vietnam.

• From “assessed tax” to “self-declaration and self-payment”: The Draft proposes the complete abolition of the presumptive tax method imposed by tax authorities. Instead, household and individual business operators will be responsible for determining taxable activities, selecting the applicable tax calculation method (direct or credit method), and calculating their own tax liabilities.
• Role of the Tax Authority: The tax authority’s role will shift from tax assessment to support and supervision, relying on large-scale data systems.
• Effective date: This regulation is expected to take effect early, from 1 January 2026, six months earlier than the general effective date of the Law).
• Expert perspective: This change requires household businesses to enhance their accounting capabilities. Accordingly, the Draft expands the scope allowing tax agents to provide accounting services to this group of taxpayers.

2. Strengthened Tax Administration for E-commerce and the Digital Economy

The Draft Tax Administration Law 2025 clearly defines the responsibilities of digital platforms, both domestic and cross-border.

• Responsibilities of e-commerce platforms:
  • Platforms with payment functions must withhold, declare, and remit taxes on behalf of sellers (household and individual business operators) operating on the platform.
  • Platforms without payment functions will require sellers to fulfill their own tax obligations.
• Expanded subjects to tax administration: Foreign organizations and individuals conducting business on digital platforms and earning income in Vietnam will be explicitly included in tax administration, regardless of whether they have a permanent establishment in Vietnam.

3. Enhanced Enforcement Measures and Violation Handling

The Tax policy maker introduces stronger enforcement tools to improve tax debt recovery.

• New enforcement measure – Bankruptcy proceedings: the Draft adds the measure allowing tax authorities to file petitions to initiate bankruptcy proceedings against enterprises with outstanding tax debts. Tax authorities will be exempt from court fees and advance payments in such case.
• Handling of absconding taxpayers: Enforcement measures may be applied even when taxpayers still owe taxes but are no longer operating at their registered addresses.
• Expanded authority for asset seizure: The authority to issue decisions on asset seizure and auction will be transferred to People’s Committee Chairpersons at various levels, enhancing legal validity and enforcement effectiveness.

• Scope of “tax evasion”: The definition of tax evasion is narrowed. Procedural violations (e.g., late filing exceeding 90 days) that do not result in tax underpayment will be subject only to administrative penalties and will not be considered tax evasion.

4. International Taxation and Transfer Pricing Management  

To align with international integration trends, regulations on inspection and declaration are adjusted with greater flexibility:

• Amended tax declaration period: The period for filing amended tax returns due to errors is reduced from 10 years to 5 years.
• Transfer pricing audit duration: For enterprises with related-party transactions, on-site inspections may last up to two years if information exchange with foreign tax authorities is required.
• Decentralization of APA approval: The authority to approve Advance Pricing Agreements (APAs) will be delegated from the Minister of Finance to heads of tax authorities, shortening approval timelines.

5. Accelerated Digital Transformation and Enhanced Taxpayer Protection

The Draft emphasizes a “taxpayer-centered” approach through technological improvements:

• Electronic identification:  Personal tax identification numbers will be synchronized with personal identification numbers (citizen ID numbers)
• Legal validity of automated documents: Tax notices and administrative decisions automatically issued by tax authority systems, with digital signatures, will be legally recognized.
• Taxpayer protection mechanisms: Taxpayers will be exempt from penalties and late payment interest if delays result from technical failures of the tax administration system or errors by payment service providers.
• Liability exemption for tax officials: Tax officials will be exempt from liability for matters that have already been appraised by other competent authorities.

Conclusion

The Draft Amended Law on Tax Administration 2025 reflects strong efforts to enhance transparency and modernize tax administration. For businesses—particularly those operating on digital platforms or engaging in related-party transactions—early awareness and preparation are critical to developing appropriate compliance strategies.

Contact Information

Mr. Nguyen Bao Anh
Deputy General Director – Head of Tax, Transfer Pricing & Outsourcing Services
Email: anh.nb@a-c.com.vn