The regulations on value added tax reduction policy

On 30/6/2024, the Government issued Decree No. 72/2024/ND-CP dated June 30, 2024 regulating the value added tax reduction policy according to Resolution No. 142/2024/QH15 dated June 29, 2024 of the National Assembly.

According to Decree No. 72/2024/ND-CP, value added tax is reduced for groups of goods and services currently applying 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. The details in Appendix I are issued with this Decree.

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

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

- The reduction of value added tax for each type of goods and services specified in Clause 1 of this Article is applied uniformly at the stages of import, production, processing, and commercial business. For coal products sold (including coal that is mined and then screened and classified according to a closed process before being sold) are subject to value added tax reduction. Coal products in Appendix I issued with this Decree, at stages other than the stage of mining and selling, are not subject to value added tax reduction.

General corporations and economic groups that implement a closed process before selling are also subject to value added tax reduction for coal products sold.

In case the goods and services listed in Appendices I, II and III issued together with this Decree 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 be applied and no value added tax shall be reduced.

Value added tax reduction rate

- Business establishments calculating value added tax according to the deduction method shall apply the value added tax rate of 8% to the goods and services specified in Clause 1 of this Article.

- Business establishments (including business households and business individuals) calculating value added tax according to the percentage method on revenue shall be entitled to a 20% reduction in the percentage rate for calculating value added tax when issuing invoices for goods and services subject to value added tax reduction as prescribed in Clause 1 of this Article.

The Decree No. 72/2024/ND-CP takes effect from July 1, 2024 to December 31, 2024.