Is the lottery business eligible for a 2% VAT reduction in Vietnam in the first 06 months of 2025?

Is the lottery business eligible for a 2% VAT reduction in Vietnam in the first 06 months of 2025?

According to Appendix II issued in conjunction with Decree 180/2024/ND-CP, which specifies the list of services subject to special consumption tax that are not eligible for a VAT reduction, the services include:

- Discotheque business;

- Massage and karaoke services;

- Casino business; electronic games with prizes including jackpot, slot machines, and similar devices;

- Betting business;

- Golf business, including membership card sales and golf play ticket sales;

- Lottery business.

Furthermore, Clause 2 of Article 2 of Decree 180/2024/ND-CP stipulates the effect and implementation as follows:

Effect and Implementation

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

2. The ministries according to their functions and duties, and the 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 as prescribed in Article 1 of this Decree. This includes focusing on solutions to stabilize the supply-demand of goods, services subject to VAT reduction to maintain price stability in the market (prices excluding VAT) from January 1, 2025, to the end of June 30, 2025.

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From the above regulations, it can be seen that the lottery business is a service not eligible for a 2% VAT reduction in the first six months of 2025, from January 1, 2025, to the end of June 30, 2025.

Is the lottery business eligible for a 2% VAT reduction in Vietnam in the first 06 months of 2025? (Image from the internet)

Which entities are VAT payers in Vietnam?

According to Article 3 of Circular 219/2013/TT-BTC, entities required to pay VAT include organizations and individuals producing and trading goods and services liable to VAT in Vietnam, regardless of industry, form, or type of business organization (hereinafter referred to as "business establishment") and organizations and individuals importing goods and purchasing services from abroad liable to VAT (hereinafter referred to as "importers"), including:

- Business organizations established and registered under the Enterprise Law 2020, Cooperative Law 2023, and other specialized business laws;

- Economic organizations of political organizations, socio-political organizations, social organizations, socio-professional organizations, people's armed units, public service organizations, and other organizations;

- Foreign-invested enterprises and foreign parties involved in business cooperation under the Investment Law; foreign organizations and individuals operating business in Vietnam but not establishing a legal entity in Vietnam;

- Individuals, households, independent business groups, and other subjects engaged in production, business, and import activities;

- Organizations and individuals engaged in business activities in Vietnam purchasing services (including services attached to goods) from foreign organizations without a permanent establishment in Vietnam and expatriates as non-residents in Vietnam, then the purchasing institutions, individuals are taxpayers, except in cases without declaration, computation, and tax submission for VAT as guided in Clause 2, Article 5 of Circular 219/2013/TT-BTC.

Regulations on permanent establishments and non-residents follow the laws on corporate income tax and personal income tax.

- Branches of export processing enterprises established to engage in trading goods and related activities to sale in Vietnam under the laws on industrial zones, export processing zones, and economic zones.

When are cases where taxpayers are not required to declare and pay VAT in Vietnam?

According to Clause 3, Article 2 of Decree 209/2013/ND-CP, the cases where taxpayers are not required to declare and pay VAT include:

- Organizations and individuals receiving compensations, rewards, support payments, rights transfer on emissions, and other financial receipts.

- Organizations and individuals producing or conducting business activities in Vietnam purchasing services from foreign organizations without a permanent establishment in Vietnam and individuals abroad as non-residents in Vietnam, including cases: Repair of vehicles, machinery, and equipment (including materials, replacement parts); advertising, marketing; investment and commerce promotion; brokerage in selling goods and providing services; training; sharing telecom and postal charges between Vietnam and foreign countries wherein such services are provided outside Vietnam.

- Non-business organizations and individuals who aren't taxpayers selling assets.

- Organizations and individuals transferring investment projects to produce, trade goods, services liable to VAT to enterprises, cooperatives.

- Agricultural, forestry, aquaculture, unprocessed product sales or those merely undergoing preliminary processing sold to enterprises, cooperatives, except in the cases stipulated in Clause 1, Article 5 of Law on VAT 2008.