Legal News

[Taxation] Decree No. 94/2023/ND-CP on Value Added Tax Reduction

2024/01/04

On December 28, 2023, Decree No. 94/2023/ND-CP regarding the 2% reduction in value added tax (VAT) was issued and will be effective from January 1, 2024 to June 30, 2024. The main contents are as follows.

From January 1, 2024 to June 30, 2024, VAT will be reduced by 2% to 8% for products and services to which 10% VAT is applied by law. However, the goods and services listed in the appendix to this Decree are not eligible for tax reduction.

Products and services not eligible for tax reduction:
Special consumption tax is imposed on telecommunications, information technology, financial activities, banking, securities, insurance, real estate, metals, metal products, mining products (excluding coal mining), coke, refined petroleum, chemical products, alcohol and tobacco, etc. goods and services provided.

The VAT reduction measures will be applied uniformly at all stages of import, production, processing and commercial operations. Even if the goods and services listed in Appendices I, II and III of this Decree are exempt from VAT in accordance with the provisions of the law, or the applicable tax rate is 5%, the VAT reduction measures are applicable.

If a company sells goods or services that are subject to different tax rates, the VAT invoice must clearly state the tax rate for each product or service. In addition, when filing a VAT return, enterprises are also required to complete and attach the form specified in Appendix IV of this Decree (List of Declaration of Goods and Services Eligible for Tax Reduction).

Reference: Decree No. 94/2023/ND-CP dated December 28, 2023

*This article was translated by Yarakuzen.