- VAT Rate Reduction Approved: The 15th National Assembly has approved a reduction of the Value Added Tax (VAT) rate from 10% to 8%, effective until December 31, 2026, to stimulate economic activity and boost production and business operations in the country.
- Expanded Eligibility: This 2% VAT reduction applies to a broader range of goods and services as specified in Article 9, Clause 3 of the Law on Value Added Tax No. 48/2024/QH15, while excluding certain sectors such as telecommunications, banking, insurance, and specific mining products.
- Longer Duration and Further Guidance: The tax reduction period has been extended from July 1, 2025, to December 31, 2026, and includes eligible sectors like transportation, logistics, and information technology services. Additional details regarding the implementation of this measure are anticipated from the Government.
Source Pagero
Government Reduces VAT from July 1, 2025, to December 31, 2026, Excluding Certain Sectors
- The government issued Decree No 174/2025/ND-CP on June 30, 2025, to reduce value-added tax from July 1, 2025, to December 31, 2026.
- The reduction applies to goods and services currently taxed at 10 percent, excluding telecommunications, financial activities, banking, securities, insurance, real estate, metal products, and mining products except coal.
- Goods and services subject to special consumption tax except gasoline are also excluded.
- The reduction is uniformly applied at import, production, processing, and commercial stages.
- Businesses using the deduction method will apply an 8 percent VAT rate.
- Businesses using the percentage method will receive a 20 percent reduction in the percentage rate for VAT calculation.
- Specific procedures are outlined for issuing invoices and declaring VAT for both deduction and percentage methods.
Source: baochinhphu.vn
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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