Officially reduce 2% VAT from July 1

The National Assembly has passed the Resolution of the 5th Session, which includes a 2% reduction in value-added tax (VAT) from July 1 to the end of 2023.

VAT reduction policy in 2022

On January 28, 2022, the Government issued Decree 15/2022/ND-CP on tax exemption and reduction policies under Resolution 43/2022/QH15 on fiscal and monetary policies to support the Socio-Economic Recovery and Development Program.

Accordingly, VAT will be reduced to 8% for groups of goods and services currently subject to a tax rate of 10%, except for the following groups of goods and services:

- Telecommunications, financial activities, banking, securities, insurance, real estate business, metals and prefabricated metal products, mining products (excluding coal mining), coke, refined petroleum, chemical products. Details in Appendix I issued with Decree 15/2022.

- Goods and services subject to special consumption tax. Details in Appendix II issued with Decree 15/2022/ND-CP.

- Information technology according to the law on information technology. Details in Appendix III issued with Decree 15/2022/ND-CP.

The reduction of VAT for each type of goods and services specified in Clause 1, Article 1 of Decree 15/2022/ND-CP is applied uniformly at the stages of import, production, processing, and commercial business.

For coal products sold (including coal mined and then screened and classified according to a closed process before being sold) are subject to VAT reduction.

Coal products in Appendix I issued with Decree 15/2022/ND-CP, at stages other than exploitation and sale, are not subject to value added tax reduction.

In case the goods and services listed in Appendices I, II and III issued together with Decree 15/2022/ND-CP are not subject to value added tax or are subject to 5% value added tax according to the provisions of the Law on Value Added Tax, the provisions of the Law on Value Added Tax shall apply and no value added tax reduction shall be granted.

The above VAT reduction policy is applied from February 1, 2022 to December 31, 2022.

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