Is there a VAT reduction poposal at the 8th Session of the 15th National Assembly of Vietnam in November 2024?

Is there a VAT reduction poposal at the 8th Session of the 15th National Assembly of Vietnam in November 2024?

According to Resolution 218/NQ-CP dated November 12, 2024, the Government of Vietnam assigned the Ministry of Finance to lead, in cooperation with relevant agencies and localities, in researching, advising, and proposing the development of a national strategy on anti-waste in the spirit of directives from the General Secretary, and to report to the Prime Minister of the Government of Vietnam in November 2024.

View the full text of Resolution 218/NQ-CP dated November 12, 2024: Here

At the same time, the Ministry of Finance is urged to promptly summarize, assess, and advise to promulgate policies or submit to competent authorities to promulgate policies on tax exemptions, reductions, and extensions of taxes, fees, and land levy in 2025, to be implemented at the beginning of the year, especially concerning the continuation of the value-added tax reduction in the first 6 months of 2025 to be reported to the National Assembly at the 8th session.

Additionally, the 8th session of the National Assembly will work for 29.5 days, from October 21 to November 30, 2024; divided into 2 phases: Phase 1 from October 21 to November 13; Phase 2 from November 20 to the morning of November 30.

Thus, there will be information on the continuation of the value-added tax reduction in the first 6 months of 2025 at the 8th Session of the 15th National Assembly in November.

Is there a VAT reduction poposal at the 8th Session of the 15th National Assembly of Vietnam in November 2024? (Image from the Internet)

Which goods and services are not entitled to VAT reduction in Vietnam in the last 6 months of 2024?

Article 1 of Decree 72/2024/ND-CP implements the value-added tax reduction for groups of goods and services applying a 10% tax rate, except for the following groups:

- Telecommunications, financial activities, banking, securities, insurance, real estate business, metals and pre-fabricated metal products, mining products (excluding coal extraction), coke, refined petroleum, chemical products.

Details in Appendix I attached to Decree 72/2024/ND-CP

- Goods and services subject to special consumption tax.

Details in Appendix II attached to Decree 72/2024/ND-CP

- Information technology according to IT laws.

Details in Appendix III attached to Decree 72/2024/ND-CP

- The value-added tax reduction for each type of goods and services specified in Clause 1, Article 1 of Decree 72/2024/ND-CP is applied uniformly at importation, production, processing, commercial business stages. For coal extracted and sold (including cases where coal is extracted and then sifted and graded by a closed process before sold) that is subject to value-added tax reduction. Coal is listed in Appendix I attached to Decree 72/2024/ND-CP, at stages other than the extraction and sale stage, it is not subject to value-added tax reduction.

Economic groups, corporations implementing the closed process for selling coal extraction are also subject to value-added tax reduction on extracted coal sold.

In cases where goods and services listed in Appendices I, II, and III attached to Decree 72/2024/ND-CP are subject to no value-added tax or subjected to a 5% value-added tax rate according to the Law on VAT, then the provisions of the Law on VAT apply, and they are not subject to a reduction in VAT.

Note: Decree 72/2024/ND-CP is effective until December 31, 2024.

How to issue invoices with VAT reductions in Vietnam according to Decree 72?

Based on clause 3, clause 4, Article 1 of Decree 72/2024/ND-CP regarding the procedures for VAT reduction, the issuance of VAT reduction invoices is as follows:

VAT Reduction

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3. Implementation procedures

a) For business establishments specified at point a, clause 2 of this Article, when issuing VAT invoices for goods and services subject to VAT reduction, at the VAT tax rate line, state “8%”; the VAT amount; total payable by the buyer. Based on the VAT invoice, business establishments selling goods, services declare output VAT, and business establishments buying goods, services declare input VAT deduction according to the tax reduced stated on the VAT invoice.

b) For business establishments specified at point b, clause 2 of this Article, when issuing sales invoices providing goods and services subject to VAT reduction, in the "Amount" column, fully record the value of goods and services before reduction, and at the "Total amount of goods and services" line, record according to the amount reduced by 20% of the percentage rate on revenue, concurrently note: “reduced by...(amount) corresponding to a 20% rate for VAT calculation as per Resolution No. 142/2024/QH15”.

4. In cases where business establishments specified at point a, clause 2 of this Article, sell goods and provide services with different tax rates, the VAT invoice must specify the tax rate for each item according to clause 3 of this Article.

In cases where business establishments specified at point b, clause 2 of this Article, sell goods and provide services, the sales invoice must clearly state the amount reduced according to clause 3 of this Article.

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Therefore, when issuing VAT invoices, record the VAT reduction as follows:

- For business establishments that calculate VAT according to the deduction method:

+ At the tax rate line: Record 8%

+ Fully record: VAT amount and Total amount payable by the buyer.

In cases where business establishments sell goods and provide services at different tax rates, the VAT invoice must clearly specify the tax rate for each item according to the procedure for issuing invoices.

- For business establishments (including business households, individual businesses) calculating VAT by percentage rate on revenue:

+ "Amount" column: Fully record the value of goods and services before reduction.

+ At the "Total amount of goods and services" line: Record according to the amount reduced by 20% of the rate on revenue, concurrently note: “reduced by...(amount) corresponding to a 20% rate for VAT calculation as per Resolution No. 142/2024/QH15”.

In cases where business establishments sell goods and provide services, the sales invoice must clearly state the amount reduced according to the procedure for issuing invoices.