To continue applying 2% reduction on value-added tax in Vietnam from July 1, 2024, to December 31, 2024

To continue applying 2% reduction on value-added tax in Vietnam from July 1, 2024, to December 31, 2024

The reduction rate for value-added tax from July 1, 2024, to December 31, 2024, is as follows:

• Businesses calculating value-added tax using the credit method shall apply an 8% value-added tax rate for goods and services specified in Clause 1, Article 1 of Decree 72/2024/ND-CP.

• Businesses (including business households and individual businesses) calculating value-added tax using the percentage method on revenue are entitled to reduce the percentage rate for value-added tax calculation by 20% on issuing invoices for goods and services subject to the tax reduction as specified in Clause 1, Article 1 of Decree 72/2024/ND-CP.

Procedures for applying the reduction of value-added tax from July 1, 2024, to December 31, 2024

The procedures for applying the reduction of value-added tax from July 1, 2024, to December 31, 2024 are as follows:

• For businesses specified in point a, clause 2, Article 1 of Decree 72/2024/ND-CP: When issuing value-added tax invoices for goods and services subject to tax reduction, note "8%" on the VAT rate line; record the value-added tax amount; and the total amount payable by the buyer. Based on the VAT invoice, the selling business will declare output VAT, and the purchasing business will declare input VAT deduction according to the reduced tax amount recorded on the VAT invoice.

• For businesses specified in point b, clause 2, Article 1 of Decree 72/2024/ND-CP: When issuing sales invoices for goods and services subject to tax reduction, record the full value of goods and services before reduction in the "Transaction Amount" column, and in the "Total Amount of Goods and Services" line, record the reduced amount after 20% reduction of the percentage rate on revenue, with a note: "reduced by... (amount) equivalent to 20% of the percentage rate for VAT calculation as per Resolution 142/2024/QH15."

More details can be found in Decree 72/2024/ND-CP, which comes into force from July 1, 2024, to December 31, 2024.

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