Decree 174/2025/ND-CP providing the VAT reduction policy under Resolution 204/2025/QH15

DECREE

Providing the value-added tax reduction policy under the National Assembly's Resolution No. 204/2025/QH15 dated June 17, 2025

Pursuant to the Law on Organization of the Government dated February 18, 2025;

Pursuant to the Law on Organization of Local Administration dated June 16, 2025;

Pursuant to the Law on Value-Added Tax dated November 26, 2024;

Pursuant to the Law on Tax Administration dated June 13, 2019; the Law Amending and Supplementing a Number of Articles of the Law on Securities, Accounting Law, Law on Independent Audit, Law on the State Budget, Law on Management and Use of Public Property, Law on Tax Administration, Law on Personal Income Tax, Law on the National Reserve and Law on Handling of Administrative Violations dated November 29, 2024;

Pursuant to the National Assembly's Resolution No. 204/2025/QH15 dated June 17, 2025, on value-added tax reduction;

At the proposal of the Minister of Finance;

The Government hereby promulgates the Decree providing the value-added tax reduction policy under the National Assembly's Resolution No. 204/2025/QH15 dated June 17, 2025,

Article 1. Reduction of value-added tax

1. To grant value-added tax reduction for the groups of goods and services currently subject to the value-added tax rate of 10%, except the following groups of goods and services:

a) Telecommunications, finance, banking, securities, insurance, real estate business, metal products, products from mining (excluding coal). The details are provided in Appendix I to this Decree.

b) Goods and services subject to excise tax (excluding gasoline). The details are provided in Appendix II to this Decree.

c) The reduction of value-added tax for each type of goods and services specified in Clause 1 of this Article shall be uniformly applied at the stages of import, production, processing and trading.

In case the goods and services specified in Appendices I and II to this Decree are not liable to value-added tax or are subject to the value-added tax rate of 5% under the Law on Value-Added Tax, they must comply with the Law on Value-Added Tax and will not be eligible for value-added tax reduction.

2. Reduced rate of value-added tax:

a) Business establishments that calculate value-added tax by the credit method are eligible for the value-added tax rate of 8% for the goods and services specified in Clause 1 of this Article.

b) Business establishments (including also business households and business individuals) that calculate value-added tax by the method of turnover-based percentage are eligible for a 20%-reduction of the percentage used for value-added tax calculation when issuing invoices for the goods and services eligible for value-added tax reduction specified in Clause 1 of this Article.

3. Order and procedures for implementation:

a) When issuing a value-added invoice for a goods or service eligible for value-added tax reduction, a business establishment specified at Point a, Clause 2 of this Article shall write “8%” in the line “value-added tax rate”; the value-added tax amount; and the total amount payable by the purchaser. Based on the value-added invoice, the establishment trading goods or providing services shall declare output value-added tax rate, and the goods or service purchaser shall declare input value-added tax rate credit based on the reduced value-added tax rate amount written on the value-added invoice.

b) When issuing an invoice for a goods or service eligible for value-added tax reduction, a business establishment specified at Point b, Clause 2 of this Article shall write the full amount payable for the goods or service before reduction in the column “Amount”; and write the amount already reduced by 20% of the turnover-based percentage in the line “Total amount”, and note “A money amount of… already reduced, equivalent to 20% of the turnover-based percentage used for value-added tax calculation under Resolution No. 204/2025/QH15”.

4. When selling goods or providing services subject to different tax rates, a business establishment specified at Point a, Clause 2 of this Article shall write the tax rate for each goods or service on the value-added invoice under Clause 3 of this Article.

When selling goods or providing services, a business establishment specified at Point b, Clause 2 of this Article shall write the reduced amount on the sale invoice under Clause 3 of this Article.

5. In case a business establishment has issued an invoice and declared value-added tax at the rate or the turnover-based percentage used for value-added tax calculation that has yet to be reduced under this Decree, the seller and the purchaser shall modify the issued invoice under the regulations on invoices and documents. Based on the modified invoice, the seller shall declare the adjusted output tax amount and the purchaser shall declare the adjusted input tax amount (if any).

6. The business establishments specified in this Article shall make declarations of goods and services eligible for value-added tax reduction according to Form No. 01 provided in Appendix III to this Decree together with making value-added tax declaration forms.

Article 2. Effect

1. This Decree takes effect from July 1, 2025, to the end of December 31, 2026.

2. Ministries assigned functions and tasks, and provincial-level People’s Committees shall direct related agencies in disseminating, and guiding, examining and supervising so as to help consumers understand and benefit from value-added tax reduction under Article 1 of this Decree, focusing on solutions for stabilizing the supply and demand of goods and services eligible for value-added tax reduction in order to ensure stable market prices (value-added tax-exclusive prices) from July 1, 2025, to the end of December 31, 2026.

3. Any problems arising in the course of implementation shall be guided and settled by the Ministry of Finance.

4. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees, and related enterprises, organizations and individuals shall implement this Decree.