Decree 180 on VAT reduction until June 30, 2025 issued in Vietnam?

Decree 180 on VAT reduction until June 30, 2025 issued in Vietnam?

On December 31, 2024, the Government of Vietnam issued Decree 180/2024/ND-CP stipulating the policy to reduce value-added tax according to Decree 174/2024/QH15.

To be specific, the contents of the Decree include 02 articles:

- Article 1 Reduction of Value-Added Tax

- Article 2 Effective Date and Implementation.

View the full text of Decree 180 reducing VAT to 8% until June 30, 2025 here.

Decree 180 on VAT reduction until June 30, 2025 issued in Vietnam? (Image from Internet)

Which goods and services are eligible for VAT reduction in Vietnam in 2025 according to Decree 180/2024/ND-CP?

Based on Article 1 of Decree 180/2024/ND-CP, it is stipulated that goods and services will be eligible for VAT reduction for the first 6 months of 2025 as follows:

(1) Reduction of value-added tax on groups of goods and services currently applying the tax rate of 10%, except for the following goods and services:

- Telecommunications, financial activities, banking, securities, insurance, real estate business, metals, and products made from cast metals, mining products (excluding coal mining), coke, refined petroleum, chemical products. Details are in Annex I issued with this Decree.

- Products and services subject to special consumption tax. Details are in Annex II issued with Decree 180/2024/ND-CP

- Information technology according to the law on information technology. Details are in Annex III issued with Decree 180/2024/ND-CP

- The VAT reduction for each type of goods and services specified in Clause 1, Article 1 of Decree 180/2024/ND-CP is uniformly applied in the stages of import, production, processing, and commercial business. For coal mining products sold (including cases where mining coal is subsequently screened, classified under a closed process before being sold) subject to VAT reduction. Coal products under Annex I issued with Decree 180/2024/ND-CP at stages other than the mining sale stage are not eligible for VAT reduction.

General corporations and economic groups implementing a closed process to sell products are also eligible for VAT reduction for coal mining products sold.

In cases where goods and services listed in Annexes I, II, and III issued with Decree 180/2024/ND-CP are not subject to value-added tax or are subject to value-added tax at 5% according to the Law on Value-Added Tax, the provisions of the Law on Value-Added Tax shall be observed and VAT shall not be reduced.

On the Level of VAT Reduction:

- Businesses calculating VAT according to the deduction method shall apply an 8% VAT rate for goods and services specified in Clause 1, Article 1 of Decree 180/2024/ND-CP

- Businesses (including business households, individual businesses) calculating VAT based on a percentage (%) of revenue are entitled to a 20% reduction in the percentage (%) for VAT calculation when issuing invoices for goods and services eligible for VAT reduction as specified in Clause 1, Article 1 of Decree 180/2024/ND-CP.

How long is the VAT reduction period in Vietnam in 2025 according to Decree 180/2024/ND-CP?

Article 2 of Decree 180/2024/ND-CP stipulates as follows:

Effective Date and Implementation

1. This Decree is effective from January 1, 2025, to the end of June 30, 2025.

2. Ministries, according to their function, tasks, and People's Committees of provinces and centrally run cities, shall direct relevant agencies to disseminate, guide, inspect, and supervise so that consumers understand and benefit from the VAT reduction prescribed in Article 1 of this Decree, focusing particularly on solutions to stabilize the supply and demand of goods and services eligible for VAT reduction to maintain price stability (prices excluding VAT) from January 1, 2025, to the end of June 30, 2025.

3. During the implementation, if obstacles arise, the Ministry of Finance shall provide guidance and address issues.

4. Ministers, Heads of ministerial-equivalent agencies, Heads of agencies attached to the Government of Vietnam, Chairpersons of People's Committees of provinces and centrally run cities, and related enterprises, organizations, and individuals shall be responsible for implementing this Decree.

Thus, the VAT reduction period in 2025 is implemented from January 1, 2025, to the end of June 30, 2025.