VAT reduction to 8% from July 01, 2023
According to the Decree, the VAT reduction applied from July 01, 2023 to the end of December 31, 2023 according to Decree No. 44/2023/ND-CP is as follows:
- Business establishments calculating VAT using the credit-invoice method may apply 8% VAT to goods and services to which 10% VAT is applied, except for the following goods and services:
+ Telecommunications, finance, banking, securities, insurance, trading of real estate, metals and prefabricated metal products, mining products (exclusive of coal mining), coke coal, refined petroleum, chemical products. Details are specified in Appendix I enclosed with Decree No. 44/2023/ND-CP.
+ Excisable goods and services. Details are specified in the Appendix II enclosed with Decree No. 44/2023/ND-CP.
+ Information technology under the law on information technology. Details are specified in the Appendix III enclosed with Decree No. 44/2023/ND-CP.
+ The reduction of VAT for each category of goods and service specified in Clause 1 Article 1 of Decree No. 44/2023/ND-CP shall be consistently applied in all stages, including import, manufacture, processing and commercial business.
Coal products mined for sale (including coal products mined and then washed, sieved and classified under a closed process before they are sold) are eligible for VAT reduction. Coal products in Appendix I enclosed herewith are not eligible for VAT reduction in any stages other than the mining stage.
Economic corporations applying the closed process before sale are also eligible for VAT reduction for the coal products mined for sale.
If the goods and services specified in the Appendixes I, II and III enclosed with Decree No. 44/2023/ND-CP are not subject to VAT or are subject to 5% VAT under regulations of the Law on Value-Added Tax, they shall apply the Law on Value-Added Tax and are not eligible for VAT reduction.
- Businesses (including household businesses and individual businesses) that calculate VAT as a percentage of revenue (direct method) may reduce the VAT rate by 20% when issuing sale invoices for goods and services eligible for VAT reduction specified in Clause 1 Article 1 of Decree No. 44/2023/ND-CP.
For more details, see Decree No. 44/2023/ND-CP which is effective from July 01, 2023 to the end of December 31, 2023.
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