Legal News

[Taxation] Decree No. 72/2024/ND-CP on Value-Added Tax Reduction

2024/07/04

On June 30, 2024, the Tax Department issued Decree No. 72/2024/ND-CP on a 2% reduction in value-added tax (VAT). The main contents are as follows

For goods and services subject to 10% VAT by law, VAT will be reduced by 2% to 8% from July 1 to December 31, 2024. This means that the VAT tax reduction implemented in the first half of 2024 has been extended. However, the goods and services listed in the appendix of this decree are excluded from the tax reduction.

<Goods and services not subject to tax reduction>
Goods and services subject to special consumption taxes, such as telecommunications, information technology, fiscal and financial activities, banking, securities, insurance, real estate, metals, metal products, mining products (excluding coal mining), coke, refined petroleum, chemical products, alcohol and tobacco.

The VAT tax reductions are applied uniformly in all stages of importation, production, processing, and commercial operations. The VAT tax reduction measures do not apply to goods and services listed in Appendices I, II, and III of this Decree if they are exempt from VAT or the applicable tax rate is 5% according to the law.

If a company sells goods or services that are subject to different tax rates, the VAT invoice must clearly indicate the tax rate for each product or service. In addition, when submitting the VAT invoice, the form provided in Appendix IV of this Decree (Declaration List of Goods and Services Subject to VAT Abatement) must be prepared and submitted together with the VAT invoice.

If a company has already issued a VAT invoice and declared VAT without applying VAT tax reduction, both the seller and the buyer need to implement the VAT invoice amendment or replacement procedure (Decree 123/2020/ND-CP dated October 19, 2020, paragraph 2(b)). Based on the final VAT invoice, the buyer shall adjust the relevant purchase VAT and the seller shall adjust the relevant sales VAT.

 

References:
・Decree No. 72/2024/ND-CP dated June 30, 2024
・Decree No. 94/2023/ND-CP dated December 28, 2023
・Decree 123/2020/ND-CP dated October 19, 2020