Are dining bills eligible for VAT reduction in Vietnam in 2035?

Are dining bills eligible for VAT reduction in Vietnam in 2035?

VAT is the abbreviation of the English term "VAT," also known as a tax levied on the added value of goods and services arising in the production, circulation to consumption process, as stipulated in Article 2 of the Law on VAT 2008.

Pursuant to Article 11 of Circular 219/2013/TT-BTC, which stipulates cases subject to the 10% VAT rate as follows:

10% Tax Rate

The 10% tax rate applies to goods and services not specified in Articles 4, 9, and 10 of this Circular.

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Furthermore, in accordance with the provisions of Articles 4, 9, and 10 of Circular 219/2013/TT-BTC regarding non-VAT taxable objects and cases subject to 0%, 5% VAT rates, the dining services recorded in dining bills will be subject to a 10% tax rate.

However, pursuant to Article 1 of Decree 180/2024/ND-CP, which provides for VAT reduction as follows:

Reduction of VAT

1. Reduce value-added tax for groups of goods and services currently applying a 10% tax rate, except for the following groups of goods and services:

a) Telecommunications, financial services, banking, securities, insurance, real estate business, metals and fabricated metal products, mining products (excluding coal mining), coke, refined petroleum, chemical products. Details in Appendix I issued with this Decree.

b) Products and services subject to special consumption tax. Details in Appendix II issued with this Decree.

c) Information technology in accordance with information technology law. Details in Appendix III issued with this Decree.

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2. VAT reduction rate

a) Business establishments calculating VAT by the credit method are applied a VAT rate of 8% for goods and services stipulated in Clause 1 of this Article.

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Additionally, examining the list provided in Appendices 1, 2, 3 of Decree 180/2024/ND-CP does not include dining services.

Moreover, pursuant to Article 2 of Decree 180/2024/ND-CP, which provides for the effective date of the VAT reduction Decree as follows:

Effectiveness and Implementation

1. This Decree shall be effective from January 1, 2025, until the end of June 30, 2025.

2. The ministries, based on their functions and duties, and the People's Committees of provinces and centrally run cities, direct related agencies to deploy communication, guidance, inspection, and supervision so that consumers understand and benefit from the VAT reduction stipulated in Article 1 of this Decree, focusing on solutions to stabilize the supply and demand of goods and services subject to VAT reduction to maintain market price stability (price without VAT) from January 1, 2025, until the end of June 30, 2025.

3. In case of arising difficulties during implementation, the Ministry of Finance shall guide and resolve.

4. The Ministers, Heads of ministerial-level agencies, Heads of Government agencies, Chairs of the People's Committees of provinces and centrally run cities, and related enterprises, organizations, and individuals shall be responsible for implementing this Decree.

Accordingly, in the first 6 months of 2025, from January 1, 2025, to June 30, 2025, the VAT rate stated in dining bills will be reduced and subject to an 8% tax rate.

After June 30, 2025, if the VAT reduction policy is not extended, dining bills will not continue to receive the VAT reduction and will return to a 10% tax rate.

Are dining bills eligible for VAT reduction in Vietnam in 2035? (Image from the Internet)

What are procedures for implementing VAT reduction in the first 6 months of 2025 for dining bills in Vietnam?

Pursuant to Clause 3, Article 1 of Decree 180/2024/ND-CP, which provides for the procedure for implementing VAT  reduction as follows:

- When issuing value-added tax invoices for dining services, the VAT rate line must state "8%"; the value-added tax amount; and the total amount the buyer must pay.

- Based on the value-added tax invoice, the business establishment providing dining services declares the output VAT, and the business establishment purchasing dining services declares input VAT deduction according to the reduced tax amount stated on the value-added tax invoice.

When is the time for determining VAT on service provision in Vietnam?

Pursuant to Clause 2, Article 8 of Circular 219/2013/TT-BTC, which provides for the time for determining VAT on service provision as follows:

- For service provision, it is the time the service provision is completed or the time the service provision invoice is issued, regardless of whether the money has been collected or not.

- For telecommunications services, it is the time of completing data reconciliation on telecommunications connection charges under the economic contract between telecommunications service establishments, but not later than 2 months from the month the telecommunications connection charges arise.