What are included in the Appendix of information technology goods and services not eligible for VAT reduction under Decree 72 in Vietnam?

What are included in the Appendix of information technology goods and services not eligible for VAT reduction under Decree 72 in Vietnam?

Based on Clause 1, Article 1 of Decree 72/2024/ND-CP, a VAT reduction is applied to groups of goods and services currently subject to a 10% tax rate, except for certain groups of goods and services. To be specific:

VAT Reduction

1. VAT reduction on groups of goods and services currently subject to a 10% tax rate, except for the following groups:

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

b) Goods and services subject to excise tax. Detailed list in Appendix II issued together with this Decree.

c) Information technology according to IT laws. Detailed list in Appendix III issued together with this Decree.

Appendix 3 issued with Decree 72/2024/ND-CP specifies the detailed list of IT goods and services according to IT laws that are not eligible for a VAT reduction to 8%.

View the full appendix of IT goods and services not eligible for VAT reduction according to Decree 72 here.

What are included in the Appendix of information technology goods and services not eligible for VAT reduction under Decree 72 in Vietnam? (Image from the Internet)

What is the duration of application of the 8% VAT rate according to Decree 72 in Vietnam?

According to the provisions of Clause 1, Article 2 of Decree 72/2024/ND-CP:

Effectiveness and Implementation

1. This Decree shall take effect from July 1, 2024 until December 31, 2024.

2. Ministries according to their functions and tasks, and provincial/municipal People's Committees shall direct relevant agencies to implement, disseminate, instruct, inspect, and supervise 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 (excluding VAT) from July 1, 2024 until December 31, 2024.

3. During implementation, if any issues arise, the Ministry of Finance is to provide guidance and resolution.

4. Ministers, heads of ministerial-level agencies, heads of agencies under the Government of Vietnam, Chairmen of provincial/municipal People's Committees, and related enterprises, organizations, and individuals shall be responsible for implementing this Decree.

Decree 72/2024/ND-CP takes effect from July 1, 2024, until December 31, 2024.

This means that the regulation reducing the VAT rate to 8% only applies until December 31, 2024.

From January 1, 2025, the VAT rate for reduced goods and services will revert to 10% (unless there are other governing documents).

What are the current VAT rates in Vietnam?

Based on Article 8 of the VAT Law 2008 (amended by Clause 3, Article 1 of the VAT Law Amendment 2013, Article 1 of the Law on Amendments to VAT, Excise Tax, and Tax Administration 2016, Article 3 of the Law on Amendments to Tax Laws 2014), and Decree 72/2024/ND-CP regarding VAT rates:

(1) The 0% tax rate applies to exported goods and services, international transportation and goods, and services not subject to VAT as stipulated in Article 5 of the VAT Law 2008 when exported, except for the following cases:

- Technology transfer, intellectual property transfer abroad.

- Reinsurance services abroad;

- Credit services;

- Capital transfer;

- Derivative financial services;

- Postal and telecommunication services;

- Export products specified in Clause 23, Article 5 of the VAT Law 2008.

Exported goods and services are those consumed outside of Vietnam, in a non-tariff zone; goods and services provided to foreign customers as specified by the Government of Vietnam.

(2) The 5% tax rate applies to the following goods and services:

- Clean water for production and daily life;

- Ores for fertilizer production; pesticides and growth stimulants for animals and plants;

- Excavation and dredging services of canals, ditches, ponds for agricultural production; cultivation, care, pest control for plants; preliminary processing, preservation of agricultural products;

- Raw agricultural, husbandry, and aquaculture products, except for products specified in Clause 1, Article 5 of this Law;

- Raw rubber; raw resin; nets, net ropes, and fibers for making fishing nets;

- Fresh food; unprocessed forest products, except for wood, bamboo shoots, and products specified in Clause 1, Article 5 of the VAT Law 2008;

- Sugar; by-products in sugar production, including molasses, sugarcane bagasse, sludge;

- Products made from jute, sedge, bamboo, rattan, palm leaves, straw, coconut shell, coconut, water hyacinth, and other handicraft products made from agricultural by-products; raw cotton; newspaper printing paper;

- Medical equipment, instruments, sanitary cotton, medical bandages; disease prevention and cure medicines; chemical, pharmaceutical products, medicinal herbs used to produce disease prevention and cure medicines;

- Teaching and learning tools, including models, drawings, boards, chalk, rulers, compasses, and specialized teaching, research, and experimental science instruments and tools;

- Cultural, exhibition, sports activities; artistic performances, film production; import, release, and screening of movies;

- Toys for children; books of all kinds, except for those specified in Clause 15, Article 5 of the VAT Law 2008;

- Scientific and technological services according to the Law on Science and Technology;

- Sale, leasing, leasing-purchase of social housing according to the law on housing.

(3) The 8% tax rate applies to certain goods and services eligible for VAT reduction (from 10% to 8%) according to Decree 72/2024/ND-CP.

(4) The 10% tax rate applies to goods and services not subject to the 0%, 5%, and 8% tax rates.

Thus, depending on the taxable item, the VAT rate from July 1, 2024, will be 0%, 5%, 10%, or 8%.