Comprehensive changes of the Law on Tax Administration 2025 to meet the requirements of the new context

In the context of a thriving globalization economy and cross-border trade, digital transformation has become an inevitable trend in public governance in Vietnam. The Law on Tax Administration 2025 was approved by the National Assembly on December 10, 2025 and will take effect from July 1, 2026 in the spirit of comprehensively renovating tax administration activities. The new regulations are expected to help the State combat tax revenue loss, implement the requirements of transparent, modern, and international standard management. At the same time, these regulations can help businesses reduce compliance costs, optimize the time to declare and submit tax documents, and facilitate the expansion of production and business.

In order for businesses to have a comprehensive perspective on these new regulations, HM&P will analyze and clarify important new points in the Law on Tax Administration 2025 that will take effect in the near future.

Expanding taxpayers to avoid revenue loss and ensure fair competition

The Law on Tax Administration 2025 has added a group of taxpayers. They are foreign organizations and individuals doing business in Vietnam, generating income in Vietnam, or doing business on e-commerce and digital platforms.[1] These regulations will create a more equal business environment between domestic and foreign enterprises because Vietnamese enterprises have always been subject to supervision and must invest resources to declare and pay taxes according to regulations. The expansion of taxpayers also helps tax authorities closely monitor and control the activities of foreign enterprises that do not have a commercial presence in Vietnam, ensuring that these subjects fulfill their tax obligations fully.

In addition, the Law has abolished the form of flat tax for business households and individuals to establish an equal business environment between these subjects and operating enterprises, eliminating the growing gap between the business reality of households and individuals and the method of collecting flat tax. From January 1, 2026, 100% of business households and individuals will apply the method of self-declaration and self-payment of tax according to actual revenue as prescribed in Article 13 of the Law on Tax Administration 2025. In addition to new legal obligations, the systematization and transparency in accounting and tax activities also make it easier for business households and individuals to expand their scale, access credit, or participate in professional supply chains.

Taxonomic grouping for risk scoring and compliance assessment

Taxpayer grouping regulations are a step from a manual and spread management model to risk-based management and compliance. According to the new regulations, instead of applying a common management mechanism as before, enterprises will be grouped to apply appropriate management and supervision measures, processes.

The tax authority will carry out the grouping based on criteria such as industries, fields, characteristics, mode of operation; legal type, ownership structure; scale of operation, scale of revenue, amount of budget payment; level and history of compliance with the law.The [2] level of tax risk of a business is determined and assessed based on the level of compliance of that business. According to Article 34 of the Law on Tax Administration 2025, the basic information that tax authorities record for assessment and grouping is information on the frequency of violations, the nature and severity of violations, the level of cooperation with tax authorities in carrying out procedures, and  examine, inspect and comply with tax handling decisions.

With this regulation, enterprises that comply well will enjoy priority regimes while enterprises have made mistakes, declared revenue lower than reality, incorrectly or inadequately invoiced,.... will be subject to stricter supervision. This is the basis for the tax sector to effectively implement the post-inspection mechanism; Tax authorities carry out inspections and examinations without duplication, reducing pressure on businesses and creating incentives for compliance. On the other hand, cases of lack of transparency will face the risk of tax re-examination according to Article 22 of the Law on Tax Administration 2025. Therefore, enterprises need to actively equip resources in accounting and tax activities to fulfill their tax obligations, avoid being classified as a high-risk group, affecting the reputation and production and business activities.

Application of technology to comprehensively and automatically process administrative procedures

From 2026, tax management in all activities of management agencies and taxpayers will be implemented based on digital technology and big data. Articles 32, 33, 35 of the Law on Tax Administration 2025 have regulations on infrastructure, systems and technology application in this work. Documents, notices, and decisions of tax authorities will be issued automatically, aiming to eliminate the procedure for issuing papers and returning results in paper copies.

All activities of collecting and processing tax data and classifying taxes will be applied science and technology. The method of electronic tax payment specified in the Law on Tax Administration 2025 has been implemented in practice.[3] Accordingly, businesses and organizations can declare and pay taxes via the website of the Department of Taxation; business households and individuals can choose 01 of 03 platforms to implement, including: (i) Website of the Department of Taxation; (ii) eTax Mobile application; or (iii) the National Public Service Portal. Article 14 of this Law also stipulates that tax authorities and customs offices must issue identification codes for payable amounts so that taxpayers can conveniently monitor and fulfill their obligations. Thereby, taxpayers can easily look up the status of the dossier, discuss with the competent authorities, and make their recommendations and requests.

Effective from July 1, the Regional Tax Sub-department II has been officially renamed Ho Chi Minh City Tax Department, comprising 29 affiliated units. Source: Nguoi Lao Dong

In addition, tax refund, exemption and reduction will gradually be implemented on the basis of databases, risk management criteria, automatic processing processes, and information security.[4] On the other hand, taxpayers must meet the requirements for connecting, storing, securing and retrieving accounting books, invoices and electronic documents to share with management agencies according to the Law on Tax Administration 2025. Business households and individuals in the case of using invoices generated from cash registers can connect data with tax authorities to be suggested and assisted in making tax declarations and calculating taxes by the system.[5]

And some other noteworthy new regulations

Firstly, according to Article 12 of the Law on Tax Administration 2025, the time limit for additional declaration of tax declaration dossiers when there are errors and omissions has been shortened from 10 years to 05 years. With this regulation, businesses will face the pressure of accurate tax declaration and supplementation of documents on time, especially in large-scale or "long-term" projects, which are often difficult to detect errors and omissions related to tax incentives, deductible expenses when calculating tax, etc ....

Secondly, enterprises that make additional declarations that increase the payable tax amount and/or reduce the tax amount to be deducted, exempted, reduced or refunded will still be handled according to regulations as for cases detected by tax authorities.[6]The  Law on Tax Administration 2025 has a transitional provision that tax debts owed by the end of June 30, 2026 will be handled according to this Law, so businesses need to quickly conduct a review to overcome violations and avoid being sanctioned according to the new regulations.

In addition,  the Law on Tax Administration 2025 has clearly defined the responsibilities in fulfilling tax obligations of parties involved in capital transfer transactions and investment projects. According to Article 17 of this Law, organizations and individuals "holding Vietnamese nationality" are responsible for determining, declaring, deducting and even paying on behalf of foreign organizations and individuals the payable tax amounts. This regulation strengthens tax management and prevents revenue loss for capital transfer activities and investment projects, but it also invisibly poses significant challenges for Vietnamese businesses. Especially in the case that they are the transferee but must control and perform on behalf of the tax obligation of the income-generating party.

To adapt to the digital age, the Law on Tax Administration 2025 has laid the foundation for an electronic tax management mechanism, shifting the focus from synchronous control to risk-based monitoring and compliance. The new regulations contribute to combating tax fraud, creating a more favorable and equal business environment, but at the same time set higher requirements for transparency and initiative of taxpayers. This requires taxpayers to be prepared to adapt to the new mechanism, reduce risks and develop in a sustainable direction.