The Vietnamese Ministry of Finance today officially implemented a new policy on cross-border trade taxes, completely eliminating the VAT exemption on imported goods valued under 1 million Vietnamese dong (approximately 285 RMB). This reform marks an important move by the Vietnamese government to regulate market order and promote fair trade through fiscal and tax leverage.

According to the new policy, all goods entering via express channels must be declared and pay VAT at the current tax rates, which are divided into two brackets: 8% and 10%, depending on the type of goods.

Compared to the previous VAT exemption policy that had been in place for over ten years, the new policy will subject cross-border e-commerce companies to stricter tax declaration processes and significantly increased operational costs.

According to preliminary estimates by the Vietnam E-commerce Association, the new policy will cause the end retail price of cross-border goods to rise by an average of 10%-15%, especially weakening the price competitiveness of Chinese dominant categories such as electronics and clothing. A manager of a cross-border logistics company in Shenzhen disclosed, “Customs clearance time has been extended from an average of 3 days to 5-7 working days, and the cost of handling additional customs declaration materials per order is approximately 5 RMB.”

Currently, Chinese cross-border e-commerce platforms have begun to implement countermeasures, including setting up bonded warehouses in locations such as Lang Son and Hai Phong in northern Vietnam, and reducing the tax cost per item by handling bulk customs clearance. Analysts believe that the new policy may drive the Southeast Asian cross-border e-commerce competitive landscape from a “price war” to a “service war.”