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 of November 29, 2023^[1]

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

Pursuant to the June 3, 2008 Law on Value-Added Tax; the June 19, 2013 Law Amending and Supplementing a Number of Articles of the Law on Value-Added Tax; and the April 6, 2016 Law Amending and Supplementing a Number of Articles of the Law on Value-Added Tax, Law on Excise Tax and Law on Tax Administration;

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

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

Pursuant to the National Assembly’s Resolution No. 110/2023/QH15 of November 29, 2023, on the 6^th session of the 15^th National Assembly;

At the proposal of the Minister of Finance;

The Government promulgates the Decree providing the value-added tax reduction policy under the National Assembly’s Resolution No. 110/2023/QH15 of November 29, 2023.

Article 1. Reduction of value-added tax (VAT)

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 and precast metal products, products from mining (excluding coal mining), 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 defined in the law on information technology. The details are provided in Appendix III to this Decree.

d/ The reduction of VAT for each goods or service item specified in Clause 1 of this Article shall be uniformly applied at the 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 VAT reduction. Coal products provided in Appendix I to this Decree at stages other than the stage of mining for sale are not eligible for VAT reduction.

Corporations and economic groups that perform the closed process before selling mined coal are also eligible for VAT reduction for such coal.

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

2. Reduced VAT rates

a/ Business establishments calculating VAT by the credit method are eligible for the VAT 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) calculating VAT based on percentage of turnover are eligible for a 20%-reduction of the percentage used to calculate VAT when issuing invoices for the goods and services eligible for VAT 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 VAT reduction, a business establishment specified at Point a, Clause 2 of this Article shall write “8%” in the line “VAT rate”; the VAT amount; and the total amount payable by the purchaser. Based on the value-added invoice, the business establishment selling goods or providing services shall declare output VAT and the goods or service purchaser shall declare input VAT credit according to the reduced VAT credit amount stated on the value-added invoice.

b/ When issuing a sale invoice for a goods or service eligible for VAT 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 tax reduction in the column “Amount”, and the amount after reducing the turnover percentage used for VAT calculation by 20% in the “Total amount” line, and note “An amount of…(money amount) subtracted, correspondingly to 20% of the turnover percentage used for VAT calculation under Resolution No. 110/2023/NQ-CP”.

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

5. In case a business establishment has issued an invoice and declared VAT at the rate or the turnover percentage used for calculation of VAT not yet reduced under this Decree, the seller and 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 VAT amount and the purchaser shall declare the adjusted input VAT amount (if any).

6. The business establishments specified in this Article shall make declarations of goods and services eligible for VAT reduction according to Form No. 01 provided in Appendix IV to this Decree and enclose them with VAT declaration forms.

Article 2. Effect and organization of implementation

1. This Decree takes effect from January 1 through 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 VAT reduction under Article 1 of this Decree, focusing on solutions for stabilizing the supply and demand of goods and services eligible for VAT reduction in order to ensure stable market prices (VAT-exclusive prices) from January 1, 2024, through June 30, 2024.

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

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.-

On behalf of the Government
For the Prime Minister
Deputy Prime Minister
LE MINH KHAI

* The Appendices to this Decree are not translated.