Resolution on 20% reduction of VAT rates for 2025 approved officially in Vietnam?

Resolution on 20% reduction of VAT rates for 2025 approved officially in Vietnam?

Based on Official Dispatch 13145/BTC-CST 2024 Download regarding the consultation for the draft Decree regulating the 20% reduction of VAT rates policy as follows:

On November 30, 2024, the National Assembly passed a Resolution on the 8th session, 15th National Assembly. In the Resolution, the National Assembly decided: To continue reducing the VAT rate by 2% for groups of goods and services specified at point a, Section 1.1, Clause 1, Article 3 of Resolution No. 43/2022/QH15 of the National Assembly on fiscal and monetary policies supporting the economic and social recovery and development program from January 1, 2025, to the end of June 30, 2025. The Government of Vietnam is assigned the responsibility to implement, ensure the task of collection, and balance the state budget for 2025 as decided by the National Assembly.

To ensure that the Decree guiding the VAT reduction policy is issued and comes into effect from January 1, 2025, the Ministry of Finance has conducted research to draft a Decree regulating the 20% reduction of VAT rates policy in accordance with the Law on Promulgation of Legal Documents.

Thus, it can be seen that the Resolution to reduce VAT by 2% in 2025 was officially approved on November 30, 2024. According to the Resolution, the VAT reduction of 2% will continue from January 1, 2025, to the end of June 30, 2025.

Resolution on 20% reduction of VAT rates for 2025 approved officially in Vietnam? (Image from the Internet)

When will the Resolution on 20% reduction of VAT rates be announced?

According to Clause 2, Article 80 of the Law on Promulgation of Legal Documents 2015, the stipulation is as follows:

Promulgation of Laws, Ordinances, and Resolutions

1. The President promulgates laws and ordinances no later than 15 days from the date they are passed.

For ordinances passed by the Standing Committee of the National Assembly that the President requests the Standing Committee to reconsider according to Clause 1, Article 88 of the Constitution, no later than 10 days from the date the ordinance is passed, the President must send a document to the Standing Committee requesting reconsideration. The Standing Committee is responsible for reconsidering the issues raised by the President at the nearest session. After the ordinance is voted on and passed again by the Standing Committee, the President promulgates it no later than 15 days from the date the ordinance is passed again by the Standing Committee. If the President still disagrees, the President submits the matter to the National Assembly for a decision at the nearest session.

For laws and ordinances drafted and issued in a simplified procedure, the President promulgates the laws and ordinances no later than 5 days from the date they are passed.

2. The Secretary-General of the National Assembly announces the resolutions of the National Assembly and resolutions of the Standing Committee of the National Assembly no later than 15 days from the date the resolution is passed.

For resolutions drafted and issued in a simplified procedure, the Secretary-General announces the resolution no later than 5 days from the date the resolution is passed.

According to the above regulations, the Resolution on 20% reduction of VAT rates will be announced no later than 15 days from the date the Resolution is passed, meaning the Resolution will be announced no later than December 15, 2024.

What are cases of VAT refund in Vietnam?

Based on Article 13 of the Value Added Tax Law 2008 (amended by Clause 7, Article 1 of the 2013 Amended Value Added Tax Law, further amended by Clause 3, Article 1 of Law No. 106/2016/QH13), the cases eligible for VAT refund are as follows:

- Business establishments paying VAT according to the credit method, if having uncredited input VAT for the month or quarter, may carry it over to the next period.

- In cases where a business establishment registered to pay VAT using the credit method has a new investment project in the investment phase with input VAT on purchased goods and services for investment not yet credited and the remaining tax amount is 300 million VND or more, VAT is refundable.

- Business establishments not eligible for VAT refund may transfer the uncredited tax of the investment project according to investment law to the next period in the following cases:

+ Investment projects of business establishments that do not contribute the required charter capital as registered; business in investment business sectors with conditions not yet meeting the conditions as stipulated by the Investment Law or failing to maintain sufficient conditions during operation;

+ Investment projects exploiting natural resources, minerals licensed from July 1, 2016, or projects producing goods where the total value of resources, minerals, and energy costs account for 51% or more of the product's cost according to the investment project.

- Business establishments in a month or quarter exporting goods or services, if having uncredited input VAT from 300 million VND or more, are entitled to a VAT refund monthly or quarterly, except for goods imported for export, goods not exported at customs areas as per the Customs Law 2014.

- Implement tax refund first, check later for taxpayers exporting goods, not violating tax and customs laws for two consecutive years; taxpayers not in the high-risk category as per the Tax Administration Law 2019.

- Business establishments paying VAT by the credit method receive VAT refunds when transferring ownership, restructuring, merging, consolidating, dividing, separating, dissolving, bankrupting, terminating activities with overpaid VAT or uncredited input VAT.

- Foreigners, overseas Vietnamese with passports or entrance documents issued by competent foreign authorities are entitled to a VAT refund for goods purchased in Vietnam taken abroad upon departure.

- VAT refund for programs, projects using official development assistance (ODA) or non-refundable aid, humanitarian aid is specified as follows:

+ Program owners, projects, or main contractors, organizations designated by foreign donors managing ODA programs, non-refundable ODA projects, are refunded VAT paid for goods and services purchased in Vietnam for the program, project;

+ Organizations in Vietnam using non-refundable aid, humanitarian aid from foreign organizations or individuals for purchasing goods and services serving non-refundable aid, humanitarian aid programs, projects in Vietnam are refunded VAT paid for those goods and services.

- Subjects enjoying diplomatic privilege exemption following diplomatic privilege exemption laws purchasing goods and services in Vietnam for use are refunded the VAT amount paid shown on value-added invoices or payment vouchers indicating the price including VAT.

- Business establishments with VAT refund decisions by competent authorities according to law and cases for VAT refund under international treaties to which the Socialist Republic of Vietnam is a member.