The Government issued Decree 94/2023/ND-CP stipulating the policy of reducing value added tax according to Resolution No. 110/2023/QH15 dated November 29, 2023 of the National Assembly .
From 1/1/2024, VAT will be reduced by 2%.
Specifically, 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: Telecommunications, financial activities, banking, securities, insurance, real estate business, metals and prefabricated metal products, mining products (excluding coal mining), coke, refined petroleum, and chemical products.
Goods and services subject to special consumption tax on information technology according to the law on information technology.
Value added tax 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 value added tax reduction. Coal products listed in Appendix I issued with this Decree, at stages other than mining and selling, are not subject to value added tax reduction.
Corporations and economic groups that implement a closed process to sell are also subject to value-added tax reduction on coal products sold.
In case goods and services 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 rate: Business establishments calculating value added tax according to the deduction method are entitled to apply a value added tax rate of 8% to specified goods and services.
Business establishments (including business households and individual businesses) calculating 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 eligible for reduced value added tax.
This Decree takes effect from January 1, 2024 to June 30, 2024.
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