Decree 94/2023/ND-CP VAT reduction policy under Resolution 110/2023/QH15

DECREE

Providing the value-added tax reduction policy under the National Assembly’s Resolution No. 110/2023/QH15 dated November 29, 2023

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Pursuant to the Law on Organization of the Government dated June 19, 2015; the Law Amending and Supplementing a Number of Articles of the Law on Organization of the Government and the Law on Organization of Local Governments dated November 22, 2019;

Pursuant to the Law on Value-Added Tax dated June 03, 2008; the Law on Amending and Supplementing a Number of Articles of the Law on Value-Added Tax dated June 19, 2013; the Law on Amending and Supplementing a Number of Articles of the Law on Value-Added Tax, the Law on Excise Tax and the Law on Tax Administration dated April 06, 2016;

Pursuant to the Law Amending and Supplementing a Number of Articles of the Tax Laws dated November 26, 2014;

Pursuant to the Law on Tax Administration dated June 13, 2019;

Pursuant to the National Assembly's Resolution No. 110/2023/QH15 dated November 29, 2023, at the sixth session of the 15^th National Assembly;

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. 110/2023/QH15 dated November 29, 2023.

Article 1. Reduction of value-added tax

1. To reduce VAT for goods and service groups currently subject to the VAT rate of 10%, except the following goods and service groups:

a) Telecommunications, finance, banking, securities, insurance, real estate business, metals, precast metal products, mineral products (excluding coal exploitation), coke, refined petroleum, and chemical products. The details are provided in Appendix I to this Decree.

b) Goods and services liable to excise tax.    The details are provided in Appendix II to this Decree.

c) Information technology as prescribed by the law on information technology. The details are provided in Appendix III to this Decree.

d) The reduction of value-added tax for each goods or service item specified in Clause 1 of this Article shall be uniformly applied at all stages of import, production, processing and trading. Coal mined for sale (including also coal mined and then sorted out and classified under a closed process before sale) is eligible for value-added tax reduction. Coal products provided in Appendix I to this Decree at stages other than the stage of mining for sale are not eligible for value-added tax reduction.

Corporations and economic groups that carry out a closed process to sell coal products are also subject to value-added tax reduction for sold coal products.

In case the goods and services provided in Appendices I, II and III to this Decree are not liable to value-added tax or are subject to the value-added tax rate of 5% in accordance with the Law on Value-Added Tax, the Law on Value-Added Tax’s provisions shall apply, and the goods and services are not eligible for value-added tax reduction.

2. Reduced value-added tax rates

a) Business establishments calculating value-added tax by the credit method are entitled to 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 individuals) calculating value-added tax based on percentage of their turnover are entitled to a 20%-reduction of the percentage used to calculate value-added tax when issuing invoices for goods and services eligible for value-added tax reduction specified in Clause 1 of this Article.

3. Order and procedures for implementation

a) A business establishment specified at Point a, Clause 2 of this Article shall, when issuing a value-added invoice for a goods or service eligible for value-added tax reduction, write “8%” in the line “value-added tax rate”; the value-added tax amount; and the total amount payable by the customer. Based on the value-added invoice, the goods or service seller shall declare output value-added tax and the goods or service purchaser shall declare input value-added tax according to the reduced value-added tax amount stated in the value-added invoice.

b) A business establishment specified at Point b, Clause 2 of this Article shall, when issuing a sale invoices for a goods or service eligible for value-added tax reduction, write the full payment amount for the goods or service before tax reduction in the column “Amount” and the amount after reducing the percentage used to calculate value-added tax by 20% in the “Total amount” line, and note “reduced by…(the money amount) corresponding to 20% of the turnover percentage used for VAT calculation under Resolution No. 110/2023/QH15”.

4. A business establishment specified at Point a, Clause 2 of this Article shall, when providing services subject to different tax rates, write the tax rate applicable to each good or service in the value-added invoice in accordance with Clause 3 of this Article.

A business establishment specified at Point b, Clause 2 of this Article shall, when selling goods or providing services, write the reduced amount in the sale invoice in accordance with Clause 3 of this Article.

5. In case a business establishment has issued an invoice and declared tax at the value-added tax rate, or the percentage used to calculate value-added tax not yet reduced under this Decree, the seller and purchaser shall modify the issued invoice in accordance the law on invoices and documents. Based on the modified invoice, the seller shall adjust output value-added tax and the buyer shall adjust input value-added tax (if any).

6. Business establishments specified in this Article shall declare goods and services eligible for value-added tax reduction according to Form No. 01 provided in Appendix IV to this Decree and the value-added tax declaration.

Article 2. Effect and implementation organization

1. This Decree takes effect from January 1, 2024, to the end of June 30, 2024.

2. Ministries, within the ambit of their functions and tasks, and provincial-level People’s Committees shall direct related agencies in disseminating, guiding, examining and supervising the implementation of this Decree so as to help consumers understand and benefit from value-added tax reduction under Article 1 of this Decree, focusing on solutions to stabilize the supply and demand of goods and services eligible for value-added tax reduction in order to ensure stable market prices (VAT-exclusive prices) in the period from January 1, 2024, through June 30, 2024.

3. Any problems arising in the course of implementation should be reported to the Ministry of Finance for consideration and settlement.

4. Ministers, Heads of ministerial-level agencies and government-attached agencies, Chairpersons of People’s Committees of provinces and centrally-run cities, related enterprises, organizations and individuals shall implement this Decree.

* All Appendices are not translated herein.