What is the List of goods and services excluded from 20% VAT reduction in Vietnam in the first half of 2025?

What is the List of goods and services excluded from 20% VAT reduction in Vietnam in the first half of 2025?

The Ministry of Finance is proposing a draft Resolution of the National Assembly on the reduction of value-added tax (VAT) for the first six months of 2025. According to the proposal, the VAT rate will decrease by 20%, from 10% to 8%, applicable to groups of goods and services currently subject to the 10% tax. However, certain sectors will not be eligible for this reduction, including:

[1] Telecommunications;

[2] Information technology;

[3] Finance and banking;

[4] Securities;

[5] Insurance;

[6] Real estate business;

[7] Metal production and fabricated metal products;

[8] Mining (excluding coal mining);

[9] Coke production;

[10] Refined petroleum products;

[11] Chemical production and chemical products;

The timeframe for applying this tax reduction will be from January 1, 2025, to June 30, 2025.

Previously, in Resolution 218/NQ-CP of 2024, the Government of Vietnam tasked the Ministry of Finance with taking the lead in researching and advising on the construction of a national strategy on anti-waste, reporting to the Prime Minister by November 2024. The Ministry of Finance was also tasked with summarizing and proposing policies on tax exemptions, reductions, extensions of taxes, fees, and land levy for 2025 to be implemented from the start of the year, particularly the continuation of the VAT reduction in the first half of 2025 and reporting to the National Assembly during the 8th session.

See detailed file of Resolution 218/NQ-CP dated November 12, 2024: Download

What is the List of goods and services excluded from 20% VAT reduction in Vietnam in the first half of 2025? (Image from Internet)

Where to submit VAT declaration dossiers in Vietnam?

According to Article 45 of the Law on Tax Administration 2019, the specific locations for submitting tax declaration dossiers are regulated as follows:

- Taxpayers submit tax declaration dossiers at the directly managing tax office.

- In cases of submitting tax declaration dossiers under the one-stop-shop mechanism, the location for submitting the tax declaration dossier will be as stipulated by that mechanism.

- The location for submitting tax declaration dossiers for exported and imported goods is regulated by the Customs Law.

- the Government of Vietnam regulates the location for submitting tax declaration dossiers for the following cases:

+ Taxpayers with multiple production, business activities;

+ Taxpayers conducting production and business activities in multiple locations; taxpayers with tax obligations arising for taxes declared and paid for each occurrence;

+ Taxpayers with tax obligations arising from revenues from land; licenses for exploiting water resources, mineral resources;

+ Taxpayers with tax obligations arising from finalizing personal income tax;

+ Taxpayers declaring taxes through electronic transactions and other necessary cases.

What is the deadline for submitting monthly, quarterly VAT declarations in Vietnam in 2024?

Based on Article 44 of the Law on Tax Administration 2019, the regulations are as follows:

Deadline for submitting tax declaration dossiers

1. The deadline for submitting tax declaration dossiers for taxes declared monthly or quarterly is regulated as follows:

a) No later than the 20th day of the month following the month in which the tax obligation arises for monthly declarations and payments;

b) No later than the last day of the first month of the quarter following the quarter in which the tax obligation arises for quarterly declarations and payments.

...

According to the regulations, in 2024, the deadlines for submitting monthly or quarterly VAT declarations are as follows:

- No later than the 20th day of the month following the month in which the tax obligation arises for monthly declarations and payments

- No later than the last day of the first month of the quarter following the quarter in which the tax obligation arises for quarterly declarations and payments.

What are penalties for late tax declaration submission in Vietnam?

According to Article 13 of Decree 125/2020/ND-CP regulating the penalties for violations of tax declaration submission deadlines as follows:

- Warning for filings late by 1 to 5 days with mitigating circumstances.

- Fines from VND 2,000,000 to VND 5,000,000 for filings late by 1 to 30 days, except as prescribed in Clause 1 of this Article.

- Fines from VND 5,000,000 to VND 8,000,000 for filings late by 31 to 60 days.

- Fines from VND 8,000,000 to VND 15,000,000 for any of the following acts:

+ Filings late by 61 to 90 days;

+ Filings late by over 90 days but without tax payable;

+ Failure to submit tax filings without tax payable;

+ Failure to submit appendices as prescribed on tax administration for enterprises with related-party transactions alongside corporate income tax settlement dossiers.

- Fines from VND 15,000,000 to VND 25,000,000 for filings late by over 90 days from the filing deadline, with tax payable and the taxpayer has paid the full tax amount, late charges to the state budget before the tax authority publicly announces tax inspection or audit decisions or before the tax authority records the act of late tax filing according to Clause 11, Article 143 of the Law on Tax Administration.

Note: The above penalties apply to organizations. Penalties for individuals will be 1/2 of the organization's penalties (Clause 4, Article 7 and Clause 5, Article 5 of Decree 125/2020/ND-CP).