Value added tax reduction from July 1, 2025 to December 31, 2026

(Chinhphu.vn) - The Government issued Decree No. 174/2025/ND-CP dated June 30, 2025, stipulating the policy of reducing value-added tax according to Resolution No. 204/2025/QH15 dated June 17, 2025 of the National Assembly. The Decree takes effect from today (July 1, 2025) to December 31, 2026.

Value added tax reduction from July 1, 2025 to December 31, 2026

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

The Decree clearly states that value added tax 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:

a- Telecommunications, financial activities, banking, securities, insurance, real estate business, metal products, mining products (except coal). Details in Appendix I issued with this Decree.

b- Goods and services subject to special consumption tax (except gasoline). Details are in Appendix II issued with this Decree.

The Decree also clearly states that the reduction of value added tax for each type of goods and services is applied uniformly at the stages of import, production, processing, and commercial business.

In case the goods and services listed in Appendices I and II issued 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 apply and no value added tax reduction shall be allowed.

Value Added Tax Reduction

Regarding the reduction in value added tax, the Decree clearly states: 1- Business establishments calculating value added tax according to the deduction method are entitled to apply the value added tax rate of 8% to the goods and services specified above.

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

Procedures and order of implementation

For business establishments specified in Point 1 above, when making a value-added tax invoice to provide goods and services subject to value-added tax reduction, write "8%" in the value-added tax rate line; value-added tax amount; total amount the buyer must pay. Based on the value-added tax invoice, the business establishment selling goods and services declares output value-added tax, the business establishment purchasing goods and services declares input value-added tax deduction according to the reduced tax amount stated on the value-added tax invoice.

For business establishments specified in Point 2 above, when making sales invoices for providing goods and services subject to value added tax reduction, in the "Total amount" column, fully record the amount of goods and services before reduction, in the "Total amount of goods and services" line, record the amount reduced by 20% of the % rate on revenue, and note: "reduced... (amount) corresponding to 20% of the % rate to calculate value added tax according to Resolution 204/2025/QH15".

In case the business establishment as prescribed in Point 1 above, when selling goods or providing services, applies different tax rates, the value added tax invoice must clearly state the tax rate of each good or service.

In case the business establishment as prescribed in Point 2 above sells goods or provides services, the sales invoice must clearly state the amount of discount.

In case the business establishment has issued an invoice and declared according to the tax rate or percentage to calculate value added tax that has not been reduced according to the provisions of this Decree, the seller and the buyer shall process the issued invoice according to the provisions of law on invoices and certificates. Based on the invoice after processing, the seller shall declare and adjust the output tax, the buyer shall declare and adjust the input tax (if any).

FULL TEXT OF DECREE 174/2025/ND-CP.

Snow Letter

Source: https://baochinhphu.vn/giam-thue-gia-tri-gia-tang-tu-01-7-2025-den-het-31-12-2026-10225070118590677.htm