Decree No. 174/2025/NĐ-CP dated June 30, 2025 of the Government on the VAT reduction policy under Resolution No. 204/2025/QH15, effective from July 1, 2025 to December 31, 2026
Key highlights of the Decree:
(i) VAT Reduction: A reduction of the VAT rate from 10% to 8% is applied for certain groups of goods and services. The reduction does not apply to:
- Appendix I: Telecommunications, financial activities, banking, securities, insurance, real estate business, metal products, and mineral products (except coal).
- Appendix II: Goods and services subject to special consumption tax (except gasoline).
Scope of application: The VAT reduction is applied uniformly across importation, manufacturing, processing, and commercial stages. The 2% VAT reduction is not applicable to goods and services listed in Appendices I and II that are not subject to VAT or are already subject to the 5% VAT rate under the VAT Law.
(ii) VAT Reduction Rates:
- Taxpayers using the credit method: Apply the 8% VAT rate to eligible goods and services.
- Taxpayers using the direct method (percentage on revenue): A 20% reduction in the percentage used to calculate VAT.
(iii) Implementation Guidelines:
- If selling multiple goods/services with different VAT rates: clearly state each VAT rate on the invoice.
- If an invoice has already been issued with the 10% VAT rate or full percentage: it may be adjusted and re-declared accordingly.
- Declaration: Businesses shall declare goods and services subject to the VAT reduction using Form No. 01 in Appendix III issued with this Decree, together with the VAT return.
Effective date: From July 1, 2025 to December 31, 2026.
Please refer to the attached file for detailed information.
