On June 30th, 2024, the Government issued Decree 72/2024/ND-CP applying VAT reduction for the period from July 1st, 2024 to December 31st, 2024, accordingly:
- Items subject to VAT reduction
Decree 72/2024/ND-CP stipulates the reduction of VAT for groups of goods and services that are applying the tax rate of 10% to 8%, except for the following groups of goods and services:
– Telecommunications, financial activities, banking, securities, insurance, real estate trading, metals and products from prefabricated metals, mining products (excluding coal mining), coke, refined petroleum, and chemical products.
– Products and services subject to excise tax.
– Information technology according to the law on information technology.
The reduction of VAT for each type of goods and services is applied uniformly at the stages of import, production, processing, and commercial business.
In case goods and services are not subject to VAT/subject to 5% VAT, VAT reduction is not allowed.
- VAT reduction
Corresponding to 02 VAT calculation methods, VAT reduction is prescribed as follows:
– Business establishments calculate VAT by deduction method: 8% VAT is applied to groups of goods and services to which 10% tax is applied (except for some goods and services mentioned in Section 1).
– Business establishments (including business households and individuals) calculate VAT according to the method of % on turnover: 20% reduction in the percentage rate to calculate VAT when issuing invoices for goods and services subject to the above tax reduction.
This Decree is effective from July 1st, 2024 to December 31st, 2024.
