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IS YOUR COMPANY ACTUALLY CONDUCTING AN ON-THE-SPOT IMPORT-EXPORT TRANSACTION?

IS YOUR COMPANY ACTUALLY CONDUCTING AN ON-THE-SPOT IMPORT-EXPORT TRANSACTION?

Do you truly understand VAT regulations and the conditions for applying the 0% VAT rate to on-the-spot import-export transactions?

This is no longer an issue affecting only a handful of businesses.

Through our consulting work with FDI enterprises, we have noticed a problem that is becoming increasingly common.

Many companies deliver goods within Vietnam, complete customs declarations, issue invoices applying the 0% VAT rate, and have even followed this practice for many years. However, the key question that should be asked is:

Does the transaction genuinely satisfy the legal nature of an on-the-spot import-export transaction?

This is the issue businesses need to review carefully.

Since July 1, 2025, Law No. 90/2025/QH15 has introduced Article 47a into the Customs Law, providing a clearer legal basis for on-the-spot import and export goods. In addition, Decree No. 167/2025/ND-CP amends Article 35 of Decree No. 08/2015/ND-CP, providing more detailed regulations on the scope and procedures applicable to this customs regime.

However, the existence of legal regulations governing on-the-spot import-export transactions does not mean that every transaction involving the delivery and receipt of goods within Vietnam automatically qualifies as an on-the-spot import-export transaction.

This is precisely the point that businesses should reassess before continuing to apply the relevant tax treatment and customs procedures.

1. First of All: What Is an On-the-Spot Import-Export Transaction?

Under current regulations, on-the-spot import and export goods generally include the following cases:

  • Goods processed in Vietnam under a processing contract with a foreign trader, where the foreign trader sells or transfers those goods to an organization or individual in Vietnam.
  • Goods bought, sold, leased, or borrowed between a Vietnamese enterprise and a foreign trader, where the foreign trader designates the delivery and receipt of the goods with another enterprise located in Vietnam.

The most important element of this regulation lies in the phrase:

“Upon the designation of a foreign trader”

Therefore, when determining whether a transaction qualifies as an on-the-spot import-export transaction, businesses should not simply rely on the fact that the goods are delivered within Vietnam.

More importantly, they must evaluate the entire transaction structure.

Key Questions Businesses Should Answer

  • Who is the seller?
  • Who is the buyer?
  • Who is the foreign trader involved?
  • Which parties signed the contract?
  • Who designated the delivery of the goods to the Vietnamese enterprise?
  • Between which parties does the payment flow occur?
  • Are the commercial, customs, and accounting documents fully consistent with one another?

These are the factors that determine the true legal nature of the transaction—not merely the physical location where the goods are delivered.

2. Why Is This Particularly Important for FDI Enterprises?

Within multinational corporations’ supply chains, a common transaction model is structured as follows:

Foreign Parent Company / Overseas Customer

↓ instructs

Company A in Vietnam

↓ delivers goods

Company B in Vietnam

The goods never physically leave Vietnam, yet the transaction is structured based on a foreign trader who instructs the delivery and receipt of the goods within Vietnam.

Where all legal requirements are satisfied, this may qualify as an on-the-spot import and export transaction.

However, if a business simply assumes:

“Our overseas customer instructed us to deliver the goods to another company in Vietnam.”

without reviewing the contractual structure, the transaction parties, and the complete documentary flow, there is still insufficient basis to conclude that the transaction qualifies as on-the-spot import and export.

3. Important Note: Not Every Transaction with an Export Processing Enterprise (EPE) Qualifies as On-the-Spot Import and Export

Following July 1, 2025, businesses should no longer assume that every transaction between a domestic enterprise and an Export Processing Enterprise (EPE) is excluded from on-the-spot import and export.

In Official Letter No. 16946/CHQ-GSQL dated July 30, 2025, the Customs Department clarified that transactions involving the delivery and receipt of goods between domestic enterprises and EPEs, or between EPEs, under the instruction of a foreign trader pursuant to sales, processing, leasing, or lending contracts fall within the scope of on-the-spot import and export transactions.

Accordingly, transactions between domestic enterprises and EPEs, or between EPEs, that are carried out under the instruction of a foreign trader pursuant to commercial, processing, leasing, or lending contracts may qualify as on-the-spot import and export.

Conversely, where the transaction simply involves:

A domestic enterprise → directly selling goods to an EPE

without a transaction structure based on the instruction of a foreign trader, the transaction should be assessed as a standard export/import transaction rather than automatically being classified as on-the-spot import and export.

Therefore, the fact that the counterparty is an EPE alone is not the determining criterion for identifying an on-the-spot import and export transaction.

4. Is a Three-Party Contract Mandatory?

This is another area that frequently causes confusion for FDI enterprises. Instead of simply asking:

“Is there a three-party contract?”

Businesses should instead ask:

“How is the legal relationship between the seller, the foreign trader, and the consignee reflected within this transaction?”

The essence of an on-the-spot import and export transaction lies in the foreign trader’s commercial relationship with the parties and its instruction regarding the delivery and receipt of goods within Vietnam.

Accordingly, when reviewing a transaction, businesses should examine all of the following documents together:

  • Sales contract;
  • Contract appendices;
  • Purchase Order (PO);
  • Delivery instructions;
  • Commercial Invoice;
  • Packing List;
  • Customs declaration;
  • Payment documents; and
  • Any supporting documents demonstrating the legal relationship between the parties.

The existence or absence of a three-party contract should not be used as the sole basis for determining whether a transaction qualifies as on-the-spot import and export.

5. The More Critical Issue: 0% VAT

This is the area that businesses should pay the closest attention to.

Simply because a company considers a transaction to be an “on-the-spot import and export transaction” does not automatically mean that it qualifies for the 0% Value-Added Tax (VAT) rate.

The 0% VAT rate is a separate tax matter, and businesses must satisfy all applicable conditions relating to eligible transactions, supporting documentation, and required evidence.

Effective July 1, 2025, the new VAT Law and its implementing regulations came into force. The Ministry of Finance also issued Circular No. 69/2025/TT-BTC providing guidance on documentation and procedures for applying the 0% VAT rate.

Accordingly, businesses issuing VAT invoices at the 0% rate for transactions involving the delivery of goods within Vietnam should ask themselves at least the following three questions:

  • ① Does my transaction genuinely fall within the scope of exported goods or on-the-spot import and export?
  • ② Do I possess sufficient documentation proving that the transaction satisfies all conditions for applying the 0% VAT rate?
  • ③ Are the contracts, delivery instructions, customs declarations, invoices, and payment documents fully consistent with one another?

If any part of the transaction chain is inconsistent, the resulting risk may extend beyond customs procedures to include VAT compliance, invoicing requirements, and accounting records.

6. Four Transaction Categories That FDI Enterprises Should Review Carefully

Category 1 – Selling Goods to a Vietnamese Enterprise Under the Instruction of a Foreign Company

Businesses should verify:

  • Whether the overseas company is genuinely acting as the foreign trader in the transaction;
  • Which parties have signed the contract;
  • Whether there is a delivery instruction specifying delivery within Vietnam;
  • Whether the consignee is the designated recipient; and
  • Whether the payment flow matches the transaction structure.

Category 2 – Selling Goods to an Export Processing Enterprise (EPE)

Businesses should not automatically assume that this constitutes an on-the-spot import and export transaction.

Instead, determine whether:

  • The transaction is a normal domestic sale between a domestic enterprise and an EPE; or
  • The transaction is carried out under the instruction of a foreign trader.

Each scenario may require a different customs treatment.

Category 3 – Purchasing Goods Domestically Under the Instruction of a Parent Company or Foreign Customer

This is a common scenario for many FDI enterprises.

Businesses should clearly identify:

  • Who is the buyer;
  • Who is the seller;
  • Whether the foreign company is a contracting party;
  • Who issues the delivery instruction; and
  • Whether the Vietnamese consignee is the designated recipient.

Category 4 – Transactions Currently Applying the 0% VAT Rate

This is the highest-priority category for review.

Businesses should not simply verify:

“Has an on-the-spot customs declaration been filed?”

Instead, they should verify:

“Do the customs declaration, contract, delivery instruction, invoice, and payment documents consistently reflect the same underlying transaction?”

7. Compliance Checklist for Businesses

Step 1 – Map Out the Transaction Structure

For each transaction, draw a simple transaction flow:

Seller → Foreign Trader → Receiving Party

Then answer the following questions:

  • Who signed the contract?
  • Who issued the invoice?
  • Who made the payment?
  • Who delivered the goods?
  • Who received the goods?
  • Who designated the delivery location?

If your business cannot clearly answer all six questions, it is too early to conclude that the transaction qualifies as an on-the-spot import-export transaction.

Step 2 – Review the Contracts

Review the following documents:

  • Sales Contract;
  • Purchase Order (PO);
  • Contract Appendices;
  • Delivery Terms;
  • Payment Terms;
  • Delivery Designation Clauses.

Step 3 – Cross-check Supporting Documents

Cross-check the following:

Contract ↔ PO ↔ Invoice ↔ Packing List ↔ Customs Declaration ↔ Payment

The information across all documents must be consistent and accurately reflect the true nature of the transaction.

Step 4 – Review VAT 0% Eligibility

Do not simply ask:

“If there is an on-the-spot import-export customs declaration, can the transaction automatically apply the 0% VAT rate?”

Instead, ask:


“Does this transaction fully satisfy the legal requirements for applying the 0% VAT rate under Vietnam’s VAT regulations, and does the business possess sufficient supporting documentation?”

8. A Legal Change That Represents a Major Compliance Challenge

Law No. 90/2025/QH15 took effect on July 1, 2025, introducing Article 47a on on-the-spot import and export goods. Decree No. 167/2025/ND-CP further clarifies the procedures under Article 35 of Decree No. 08/2015/ND-CP.

However, businesses need to change more than just customs declaration codes. More importantly, they need to change the way they assess these transactions:

Do not determine whether a transaction is an on-the-spot import-export transaction solely because “the goods are delivered within Vietnam.”

Instead, determine it based on:

TRANSACTION SUBSTANCE → LEGAL PARTIES → CONTRACT → DELIVERY INSTRUCTION → GOODS FLOW → PAYMENT FLOW → CUSTOMS DOCUMENTATION → VAT TREATMENT

A transaction may be operationally correct from a logistics perspective but still fail to comply with customs and tax regulations.

THT Cargo Logistics – Recommendations for FDI Enterprises

If your company is involved in any of the following transactions:

  • Domestic enterprise ↔ Foreign enterprise;
  • Domestic enterprise ↔ Export Processing Enterprise (EPE);
  • EPE ↔ EPE;
  • Goods delivered within Vietnam under the instruction of an overseas parent company or foreign customer;
  • Or transactions currently applying the 0% VAT rate for goods delivered within Vietnam,

Do not limit your review to the customs declaration alone. Review the entire transaction structure.

In particular, ensure you can answer these three questions:

  1. Does this transaction genuinely qualify as an on-the-spot import-export transaction?
  2. Is there a foreign trader involved who officially instructs the delivery and receipt of the goods?
  3. Does the current documentation provide sufficient legal basis to apply the 0% VAT rate?

This is the right time for FDI enterprises to proactively review their transaction structures before questions are raised by Customs or the Tax Authority.

THT Cargo Logistics supports businesses in reviewing transaction structures, on-the-spot import-export documentation, customs declaration codes, and VAT-related compliance issues.

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