0% VAT, Full Customs: Vietnam’s On-Spot Export Overhaul Explained

Vietnam’s On-Spot Import/Export Law Takes Effect: A New Customs Era

Effective July 1, 2025, Vietnam has enacted a pivotal law that formally recognizes on-spot import/export as a regulated customs activity. This development marks a major shift for global supply chains operating in Vietnam—especially in contract manufacturing, toll processing, and regional distribution.

Effective Date: July 1, 2025
Legal Shift: On-spot import/export—once a grey area—is now officially part of the customs regime.
Key Change: Transactions must follow full customs clearance procedures, with both import and export declarations, under customs supervision.

By clarifying customs procedures and preserving the 0% VAT incentive, the law introduces a level of legal certainty and operational flexibility that can reshape sourcing, inventory, and port strategies across Asia.

New Customs Procedures for On-Spot Transactions

Under the new law, on-spot import/export is treated as a full customs event. This introduces stricter—but clearer—requirements for companies operating in Vietnam.

Key Requirements

Dual Declarations: Both the domestic exporter and the designated importer must submit customs declarations.
Customs Supervision: Goods are subject to inspection and supervision as if crossing a national border.
Standard Documentation:
- Foreign trade contract
- Commercial invoice
- Packing list
- Export invoice
- Import customs declaration
- Relevant permits or certificates (if applicable)
Timeline: The importer must finalize customs procedures within 15 working days of export clearance and delivery.

These changes aim to standardize practice, reduce ambiguity, and make Vietnam’s customs landscape more aligned with international expectations.

0% VAT Incentive Maintained

Despite the stricter requirements, Vietnam will continue applying a 0% VAT rate to eligible on-spot transactions. This ensures Vietnam retains its competitive edge as an export hub.

To qualify, businesses must:

Meet the legal definition of on-spot import/export transactions
Provide proper documentation such as:
- Signed contracts
- Invoices
- Payment records
- Customs clearance documents

The VAT provision has now been formally embedded in the VAT law rather than existing as a subordinate clause, adding a layer of legal clarity and long-term consistency for businesses operating in Vietnam.

Reminder: Firms have 15 working days from goods delivery to complete customs clearance. Any delay or missing documents could jeopardize the 0% VAT claim—and trigger penalties or future audit risk.

Vietnam’s New Advantage: Legal Clarity + Competitive Incentives

This legal update doesn’t just clean up compliance—it deepens Vietnam’s attractiveness in regional and global supply chains:

Retains Tax Incentives: Keeping the 0% VAT rate maintains parity with physical exports, ensuring local processing doesn’t trigger extra tax liability.
Improves FDI Environment: Global manufacturers gain confidence from transparent, codified procedures for goods movements and ownership transfers.
Supports Supply Chain Localization: Firms can shift from cross-border logistics to in-country value chains while keeping export incentives intact.
Sets Regional Example: Vietnam is now a model for how emerging economies can manage domestic trade under globalized frameworks.

Supply Chain Planning: Strategic Shifts Triggered by Vietnam’s Law

This legal reform supports Vietnam’s role as a regional trade and manufacturing hub, and unlocks new strategic opportunities:

Regional Hub Model: Enables Vietnam to function as a base for Southeast Asia–focused supply chains with in-country transactions minimizing international shipments.
Supply Chain Resilience: With more transactions localized, supply chains become less vulnerable to port closures, maritime disruption, or geopolitical instability.
Investment Signal: The alignment of tax, trade, and customs law shows Vietnam’s intent to attract FDI and retain high-value production activities.

Strategic Recommendations for Logistics Professionals

To adapt quickly and fully benefit from the new regime, logistics teams should prioritize the following actions:

Update SOPs and ERP Configurations: Ensure customs declarations, VAT documentation, and internal workflows are aligned with the new requirements.
Train Operations & Compliance Teams: Equip staff with knowledge on new procedures, especially in customer-facing and document-preparing roles.
Partner with Compliant Suppliers: Work with domestic vendors who are capable of participating in on-spot transactions and providing proper export documentation.
Monitor for Further Guidance: Customs authorities may issue clarifications or procedural adjustments post-enactment. Set up alerts or coordination channels to stay current.

Under-the-Radar Impacts on Cargo Flow and Port Strategy

Beyond legal clarity, the on-spot law has practical effects on Vietnam’s maritime and inland logistics landscape:

Reduced Port Congestion: With more transactions completed domestically under on-spot terms, some export volumes may bypass physical shipment, easing pressure on ports.
Reshaping Regional Cargo Flows: Multinationals may reallocate supply routes and inventory positioning to capitalize on Vietnam’s more predictable and incentive-backed system.
Local Value Creation: By formalizing on-spot transactions, Vietnam encourages more upstream and downstream activities—such as packaging, labeling, and final assembly—to occur domestically.

Final Insights: From Legal Reform to Trade Advantage

Legal Clarity: On-spot import/export is now a recognized and regulated process, with customs and VAT compliance requirements.
0% VAT Preserved: Despite stricter procedures, the 0% VAT rate remains available for qualifying transactions with proper documentation.
Business Opportunity: The new framework enhances supply chain transparency, supports nearshoring, and strengthens Vietnam’s competitive appeal.

Stricter customs rules are a challenge—but also a chance to build stronger, more resilient operations. With TRADLINX, logistics teams get the real-time tracking and procedural alignment needed to move confidently under Vietnam’s new on-spot export regime.

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References

What Businesses Are Asking About the New On-Spot Law

Does this mean on-spot transactions are now considered exports?
Yes — from a customs and VAT perspective, qualifying on-spot transactions are treated similarly to exports, but they require full customs procedures and compliance within Vietnam.

Is the 0% VAT applied automatically?
No. Businesses must meet strict eligibility conditions, including having proper documentation and following the full customs clearance process to apply the 0% VAT rate.

Will this impact logistics operations or routing?
It may reduce congestion at ports and change how companies structure supply chains, as more domestic transactions can now occur under export-like incentives.

Who benefits most from this law?
Contract manufacturers, EPEs (Export Processing Enterprises), and foreign-invested suppliers operating in Vietnam — especially those participating in regional production networks.

How soon should businesses adjust their procedures?
Immediately. The law took effect on July 1, 2025, and delayed compliance may result in VAT disputes or customs penalties.