Official VAT reduction until June 30, 2025

The Government has just issued Decree No. 180/2024/ND-CP stipulating the policy of reducing value-added tax (VAT) according to Resolution No. 174/2024/QH15 dated November 30, 2024 of the National Assembly. Accordingly, the regulation of reducing VAT by 2% will be extended until the end of June 2025.

01/02/2025 09:13

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The Government has just issued Decree No. 180/2024/ND-CP stipulating the policy of reducing value-added tax (VAT) according to Resolution No. 174/2024/QH15 dated November 30, 2024 of the National Assembly. Accordingly, the regulation of reducing VAT by 2% will be extended until the end of June 2025.

Reduce VAT on groups of goods and services currently subject to a tax rate of 10%

The Decree clearly states that VAT will be reduced 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 this Decree.

- Goods and services subject to special consumption tax. Details in Appendix II issued with this Decree.

- Information technology according to the law on information technology. Details in Appendix III issued with this Decree.

The Decree also clearly states that VAT reduction for each type of goods and services 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 listed in Appendix I issued with this Decree, at stages other than mining and selling, are not subject to VAT reduction.

Corporations and economic groups that implement a closed process to sell are also subject to VAT reduction on coal products sold.

In case the goods and services listed in Appendices I, II and III issued with this Decree are not subject to VAT or are subject to 5% VAT according to the provisions of the Law on VAT, the provisions of the Law on VAT shall apply and VAT shall not be reduced.

VAT reduction level

Regarding the VAT reduction rate, the Decree clearly states that business establishments calculating VAT using the deduction method are entitled to apply the VAT rate of 8% to the goods and services specified above.

Business establishments (including business households and individual businesses) that calculate VAT according to the percentage method on revenue are entitled to a 20% reduction in the percentage rate for calculating VAT when issuing invoices for goods and services eligible for VAT reduction as prescribed above.

Previously, according to Decree 72/2024/ND-CP of the Government, the regulation of reducing 2% VAT on some groups of goods will expire on December 31, 2024. Thus, with the newly approved Decree 180/2024/ND-CP, the 2% VAT reduction will be extended for another 6 months.

Source: https://baophapluat.vn/chinh-thuc-giam-thue-vat-den-3062025-post536662.html