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Insights Continued reduction of VAT to 8 % until December 31, 2024

Continued reduction of VAT to 8 % until December 31, 2024

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According to Decree 72/2024/ND-CP, the Value-Added Tax (VAT) in Vietnam will continue to be reduced to 8 % from July 1, 2024, to December 31, 2024. This reduction applies to groups of goods and services currently taxed at a rate of 10 %, with some exceptions. 
    

Exceptions

  • The exceptions include telecommunications, financial activities, banking, securities, insurance, real estate business, metals and precast metal products, mineral products (excluding coal mining), coke, refined petroleum, and chemical products; 
  • Products and services subject to special consumption tax; 
  • Information technology products and services as prescribed in the Law on Information Technology; 
  • The VAT reduction for each type of goods and services mentioned above is uniformly applied at all stages of import, production, processing, and commercial business. Coal products in Appendix I issued with Decree 72/2024/ND-CP, at stages other than the mining stage for sale, are not subject to VAT reduction; 
  • General corporations and economic groups that implement a closed process before selling are also subject to VAT reduction for coal mining products sold. 
Business establishments that pay VAT using the credit-invoice method shall pay 8 % VAT on the goods and services eligible for VAT reduction. Business establishments (including household businesses and individual businesses) that pay VAT using the direct method (as a percentage (%) on revenue) shall be eligible for 20 % reduction in the rate (%) used as the basis for calculating VAT when issuing invoices for the goods and services eligible for VAT reduction.
   
For more details, please refer to Decree 72/2024/ND-CP, effective from July 1, 2024 to December 31, 2024.

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