Exporting goods and providing services to customers abroad offers the biggest VAT advantage — the 0% rate — but it is also where companies most easily lose the incentive when dossiers and invoices do not meet the rules. This article sets out 6 key points for issuing VAT invoices to foreign customers under the legal framework in force as of 14/10/2026.
Note on legal currency: the VAT Law 48/2024/QH15 (effective 01/7/2025) has been amended three times — Law 90/2025/QH15 (effective 01/7/2025), Law 149/2025/QH15 (effective 01/01/2026), and Law 09/2026/QH16 (effective 24/4/2026); the latest consolidated text is 114/VBHN-VPQH 2026. Cross-check VBHN 114 before citing article numbers of the VAT Law.
1. The 0% rate: scope and current instruments
Article 9.1 of the VAT Law 48/2024/QH15 applies the 0% rate to exported goods and services. The items eligible for 0% are detailed in Article 17 of Decree 181/2025/ND-CP — including digital content products supplied to foreign parties (Article 17.3.d). Decree 181/2025 was amended by Decree 359/2025/ND-CP (issued 31/12/2025, effective 01/01/2026).
Key point: never cite Article 9 of Circular 219/2013/TT-BTC on 0% conditions as a current instrument — that circular was issued under the old VAT Law; the current framework is Article 18 of Decree 181/2025.
2. Conditions for 0%: missing one condition loses the incentive
Article 18 of Decree 181/2025 sets the conditions for the 0% rate:
- Exported goods: (a) a contract for sale/processing of exported goods (or an export consignment contract); (b) non-cash payment vouchers; (c) a customs declaration as prescribed;
- Exported services: (a) a service contract with an organization or individual abroad or in a non-tariff zone; (b) non-cash payment vouchers.
Failure to meet all conditions means no 0% rate — the standard rate applies. Note in particular: services consumed in Vietnam — even where the customer is a foreigner — do not qualify for 0%. And non-cash payment is mandatory: receiving cash or undocumented personal transfers forfeits the 0% condition.
3. Prepare supporting dossiers in advance — do not wait for an audit
Article 4 of Circular 69/2025/TT-BTC provides: taxpayers self-determine 0% eligibility based on Article 9.1 of the VAT Law and Article 17 of Decree 181/2025; when a state management authority so requests, they must produce dossiers proving compliance with Article 18 of Decree 181/2025.
The practical message: assemble complete dossiers from the moment the transaction arises, not when an audit begins. For exports via overseas e-commerce platforms, additional conditions on input VAT deduction and refund apply (Articles 27 and 28 of Decree 181/2025).
4. Which invoice to issue: e-invoices and commercial e-invoices
When selling goods or providing services (including exports), the seller must issue an electronic invoice to the buyer — the principle in Article 4 of Decree 123/2020 (as amended by Decree 70/2025/ND-CP, effective 01/6/2025).
From 01/7/2026, the e-invoice framework moved to Decree 254/2026/ND-CP (detailing Tax Administration Law 108/2025 on e-invoices and electronic vouchers); Article 8.3 of Decree 254/2026 adds “commercial e-invoices” for organizations, households, and individuals exporting goods and services abroad that meet the conditions for transmitting commercial invoice data electronically to the tax authority.
Two traps: (a) assuming a “commercial invoice” alone suffices for exports — for VAT purposes the company must issue a VAT e-invoice for declaration and refund; the commercial invoice is only an accompanying trade document; (b) citing Decree 123/2020 without noting its amendment by Decree 70/2025 and replacement by Decree 254/2026 from 01/7/2026. For export consignment: after actual export, the consignor issues a VAT e-invoice for declaration and refund (0% if conditions are met) or a sales e-invoice depending on the tax calculation method.
5. Invoicing timing: do not issue late
Article 9.1 and 9.2 of Decree 123/2020 (as amended by Article 1.6.a of Decree 70/2025) provide:
- Exported goods (including processed exports): the seller sets the invoicing time but no later than the next working day after customs clearance of the goods;
- Services for foreign organizations/individuals: the time of completion of the service, regardless of whether payment has been received; where payment is collected before or during service provision, the invoicing time is the payment time (except deposits or advances securing certain services such as accounting, auditing, financial/tax consulting, valuation, design consulting…).
6. Digital content products: prove “consumption outside Vietnam”
For digital content products supplied to foreign customers, the 0% rate requires dossiers proving consumption outside Vietnam — e.g., the buyer’s residence status abroad (billing address, delivery address, headquarters), access information (telephone/SIM area code, IP address, fixed-line location) — per Article 17.3.d of Decree 181/2025.
Consequences of failing the 0% conditions: the company may not deduct or claim refund of input VAT on those exported goods/services; missing non-cash payment vouchers or customs declarations also risks assessment at the standard rate and back-tax collection.
A note on the “reverse” direction — when a Vietnamese company pays a foreign counterparty (foreign contractor tax): Article 9 of Circular 69/2025/TT-BTC (not Article 7) governs VAT applicable to foreign organizations and individuals doing business in Vietnam; VAT payable under the direct method equals taxable revenue multiplied by the deemed percentage (the tax base is the contractor’s entire revenue received, before tax, including costs paid on its behalf by the Vietnamese party). Foreign contractors paying under the direct method may not deduct input VAT.
Finally, do not confuse “foreign customers” with export processing enterprises (EPEs) — EPEs are organizations in non-tariff zones within Vietnam with their own invoicing rules (Decree 254/2026); this article covers only customers abroad.
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Frequently asked questions
Do all services for foreign customers automatically get 0% VAT?
No. All conditions must be met (contract + non-cash payment vouchers), and the service must be consumed outside Vietnam — services consumed in Vietnam do not get 0% even for foreign customers.
Is a commercial invoice enough for exports?
Not for VAT purposes. The company must issue a VAT e-invoice for declaration and refund; the commercial invoice is only an accompanying trade document.
Can we still get 0% if paid in cash by the foreign customer?
No. Non-cash payment is a mandatory condition; without the voucher the 0% condition is lost, with risks of tax assessment and back collection.
Legal bases: VAT Law 48/2024/QH15 (Article 9.1; VBHN 114/VBHN-VPQH 2026 — three amendments: 90/2025, 149/2025, 09/2026/QH16); Decree 181/2025/ND-CP (Articles 17, 18; amended by Decree 359/2025/ND-CP); Circular 69/2025/TT-BTC (Articles 4, 9); Decree 123/2020/ND-CP (Articles 4, 9; amended by Decree 70/2025/ND-CP); Decree 254/2026/ND-CP (Article 8).
Does your company export goods or provide services to foreign customers and need a review of the 0% VAT conditions and e-invoicing? Reach us via the Contact page of FLAT Law Firm for VAT compliance advice.
For reference only, not legal advice.
The legal content of this article is reviewed by FLAT’s AI Legal Council and submitted to the owner for approval; it is not an opinion of a licensed lawyer and does not replace legal advice for specific cases.