DECREE 180/2024/ND-CP: REDUCTION OF 2% VAT FROM 01/01/2025 TO 30/06/2025
To maintain the objective of supporting taxpayers during difficult times, on 31 December 2024, the Government issued Decree No. 180/2024/ND-CP on the policy of reducing value-added tax (VAT) for the period from 01 January 2025, to 30 June 2025.
This VAT reduction policy does not differ from the VAT reduction policy for the period from 01 July 2024 to 31 December 2024.
The main contents of the Decree are as follows:
1. Regulations on certain goods and services subject to 8% VAT and procedures for issuing VAT invoices when reduced to 8%
On the subject of tax reduction: VAT reduction for groups of goods and services currently applying the 10% tax rate, except for the following groups:
Telecommunications, financial activities, banking, securities, insurance, real estate, metals, and products made from fabricated metals, mineral products (excluding coal mining), coke, refined petroleum, and chemical products (detailed in Appendix I);
Goods and services subject to special consumption tax (detailed in Appendix II);
Information technology as per IT laws (detailed in Appendix III);
VAT reduction is uniformly applied at all stages of import, production, processing, and commercial trading. Coal products are eligible for VAT reduction only at the mining stage;
Goods and services in Appendices I, II, and III that are exempt from VAT or subject to 5% VAT according to the VAT Law will not receive additional reductions.
On procedures and implementation:
For businesses calculating VAT by the deduction method, when issuing VAT invoices for goods and services eligible for tax reduction, the tax rate line should state “8%”; VAT amount; and the total amount payable by the buyer. Businesses declare output and input VAT according to the reduced tax amount indicated on the invoice;
For businesses calculating VAT by the percentage method, when issuing sales invoices for goods and services eligible for tax reduction, the "Total amount" column should fully state the amount before reduction, and the "Total amount" line should state the amount reduced by 20% of the percentage rate, with a note: "reduced by... (amount) corresponding to 20% of the percentage rate to calculate VAT according to Resolution No.174/2024/QH15."
2. Notes on writing VAT reduction invoices if enterprises sell goods with different tax rates
For enterprises calculating VAT by deduction method:
(i) When enterprises issue VAT invoices for goods and services subject to VAT reduction 2025, in the VAT tax rate line, state “8%”; VAT; total amount payable by the buyer;
(ii) Based on the VAT invoice, the seller declares output VAT, and the buyer deducts input VAT according to the reduced tax amount stated on the VAT invoice;
(iii) If enterprises sell goods and provide services applying different tax rates, the VAT invoice must clearly state the tax rate for each good and service according to provisions in clauses (i) and (ii) above.
For enterprises calculating VAT by the percentage method on revenue when issuing sales invoices for goods and services subject to VAT reduction, the invoice is written as follows:
In the “Amount” column, the full amount of goods and services before reduction is stated;
In the “Total amount of goods and services” line, state the amount reduced by 20% of the percentage rate on revenue, and note: “reduced... (amount) corresponding to 20% of the percentage rate to calculate VAT according to Resolution No. 174/2024/QH15”.
Note that enterprises must clearly state the reduced amount on the sales invoice according to the above provisions
LAW NO. 48/2024/QH15: THE VALUE-ADDED TAX LAW 2024 STIPULATES PROVISIONS ON TAXABLE SUBJECTS, NON-TAXABLE SUBJECTS, TAXPAYERS, TAX BASES AND CALCULATION METHODS, AS WELL AS VAT DEDUCTION AND REFUND POLICIES.
Recently, the National Assembly issued the Value-Added Tax Law 2024, replacing the Value-Added Tax Law 2008. The Value-Added Tax Law 2024 will take effect on 01 July 2025. Key highlights include:
1. Taxpayers
Additional regulations on taxpayers:
Foreign suppliers without a permanent establishment in Vietnam engaging in e-commerce or digital platform business must declare, deduct, and pay VAT.
E-commerce platforms and digital platforms are required to deduct and pay VAT on behalf of individual business households and individuals operating on their platforms.
2. Non-VATable Objects
2.1 Adjustments to non-VATable objects:
Certain goods and services previously exempt from VAT have been removed, including:
Fertilizers; machinery and equipment specifically used for agricultural production; offshore fishing vessels;
Securities custody services; market organizing services provided by stock exchanges or securities trading centers; other securities-related services.
Revised or clarified guidance for certain goods and services exempt from VAT aims to address administrative and business challenges, such as:
Eliminating the regulation on the proportion of natural resources, minerals, and energy costs constituting 51% of product cost to determine tax rates and refunds. This will be replaced by a list of restricted export products issued by the Government.
Replacing "computer software" with "software products and software services as prescribed by law”;
Excluding investment project transfers or asset sales from the definition of capital transfers.
2.2 Increase in revenue threshold for VAT liability:
From 01 January 2026, individual business households with annual revenue below VND 200 million will be exempt from VAT (an increase from the current threshold of VND 100 million under Circular 40/2021/TT-BTC).
3. Taxable Price
3.1 Revised taxable price for imported goods:
The VAT Law 2024 specifies the taxable price for imported goods as the total of:
Import tax value (as per export and import tax regulations);
Import duties and additional import taxes (if applicable);
Special consumption tax (if applicable);
Environmental protection tax (if applicable).
Compared to the VAT Law 2008, this new provision officially includes import duties and environmental taxes in the taxable price, which were previously addressed only through decrees or circulars. This ensures greater transparency and consistency in tax policies.
3.2 Taxable price for promotional goods and services
The taxable price will be zero (VND 0) for promotions conducted in compliance with commercial laws.
4. Adjustments to VAT Rates (Article 9 of VAT Law 2024)
0% VAT rate:
International transportation.
Construction and installation projects carried out overseas or in free trade zones.
Goods in duty-free zones or sold at duty-free shops.
Export services such as leasing transport vehicles outside Vietnam and international transportation-related aviation and maritime services.
5% VAT rate:
Fertilizers and offshore fishing vessels.
Goods and services shifting from 5% to 10% VAT rate:
Unprocessed forestry products.
Sugar and its by-products (molasses, bagasse, mud residue).
Specialized equipment and tools for teaching, research, and experiments.
Cultural, sports, and artistic performances, as well as the production, import, distribution, and screening of films.
5. VAT Deduction and Refund
5.1 VAT deduction methods:
Under Article 14 of the VAT Law 2024, businesses paying VAT using the deduction method may apply the following approaches:
Full deduction:
VAT on goods and services used for producing and trading VAT-liable goods and services.
VAT on goods lost or naturally depreciated during transportation due to physical and chemical properties, provided there is no compensation.
Goods and services sold to organizations or individuals receiving humanitarian or non-refundable aid.
Goods and services used in oil and gas exploration, extraction, and development activities.
Proportional deduction:
For goods and services used simultaneously for VAT-liable and VAT-exempt production, only the VAT related to VAT-liable goods and services is deductible.
Businesses must separately account for deductible and non-deductible VAT. If unable to do so, the deductible amount will be calculated based on the proportion of VAT-liable revenue to total revenue.
Additional provisions on VAT deduction and error handling:
VAT not fully deducted in a month/quarter can be carried forward to subsequent periods.
Errors in tax declarations must be amended, with the taxpayer paying any outstanding tax or reclaiming refunded tax, including late payment fees (if applicable).
Non-deductible VAT can be accounted for as an expense for corporate income tax purposes or included in the cost of fixed assets (excluding goods and services purchased without bank payment documentation).
5.2 Conditions for VAT input deduction from July 1, 2025:
Under Clause 1, Article 14 of the VAT Law 2024, businesses must meet the following requirements to deduct input VAT:
Valid invoices and documentation:
Have VAT invoices for purchases or import VAT payment receipts, or documents for VAT paid on behalf of foreign entities.
Payment must be made via non-cash methods, except for cases specified by the Government.
Additional requirements for exports:
Contracts with foreign entities for the sale, processing, or provision of services.
Sales invoices.
Non-cash payment documents.
Customs declarations for exported goods.
Packing lists, shipping documents, and insurance records (if applicable)
5.3 Prohibited actions related to VAT deduction and refund:
Article 13 of the VAT Law 2024 prohibits the following:
Illegal purchase, sale, gifting, advertising, or brokerage of invoices.
Engaging in fraudulent transactions or non-compliance to claim VAT deductions or refunds.
Issuing invoices during periods of business suspension, except for pre-existing contracts.
Using unlawful invoices or failing to transmit electronic invoice data as required.
Manipulating invoice systems or engaging in bribery related to VAT deductions and refunds.
Colluding to use unlawful invoices for tax evasion or appropriation.
5.4 Additional cases eligible for VAT refunds:
For businesses exporting goods and services within a month or quarter:
VAT input exceeding VND 300 million that cannot be deducted will be refunded, except for goods imported and re-exported.
For businesses engaged in both export and domestic sales:
Businesses must separately account for VAT input used for the production and trading of exported goods and services.
If separate accounting is not possible, the VAT input for exported goods and services will be determined based on the proportion of export revenue to total taxable revenue during the refund period. The refund period is calculated from the VAT period in which there is nondeductible VAT input carried forward, continuing until the tax period when the VAT refund request is submitted.
Notes:
VAT refunds cannot exceed 10% of export revenue for the refund period.
Any excess VAT input beyond the 10% cap can be carried forward for deduction in subsequent periods.
LAW NO. 51/2024/QH15: Law Amending and Supplementing Certain Provisions of the Law on Health Insurance
On 27 November 2024, during the 8th Session of the 15th Tenure, the National Assembly of the Socialist Republic of Vietnam passed Law No. 51/2024/QH15, amending and supplementing certain provisions of the Law on Health Insurance. Accordingly, the amendments and supplements will take effect from 1 July 2025, as detailed below:
1. Additional Cases of Delayed or Evasive Health Insurance Contributions
The 2024 amended Law on Health Insurance (Law on Health Insurance 2024) introduces Articles 48a and 48b to address acts of delayed or evasive contributions to health insurance (HI):
Delayed HI contributions include:
Failure to submit or underpay the required contributions, or failing to prepare or incompletely preparing the list of participants within 60 days, provided such acts do not fall under evasive contributions.
Evasive HI contributions include:
Failing to prepare the participant list or preparing an incomplete list beyond 60 days, declaring a lower-than-regulated salary, or failing to pay the registered HI contributions in full after being notified by a competent authority, along with other cases as prescribed by the Government.
2. Revised Regulations on Handling Violations Related to Health Insurance
Clause 35, Article 1 of the 2024 Law on Health Insurance amends Article 49 of the 2008 Law on Health Insurance regarding penalties for violations, including:
Mandatory full payment of delayed or evaded contributions, with an interest rate of 0.03% per day calculated based on the amount and duration of the delay or evasion;
Administrative penalties for acts of delayed or evasive contributions, and criminal liability for evasive contributions. Offenders are ineligible for awards or commendations;
Employers and organizations delaying or evading HI contributions must fully reimburse the medical examination and treatment expenses within the employees' HI entitlements if employees are denied HI cards due to the violation.
3. Expansion of Mandatory Health Insurance Participants
The 2024 Law on Health Insurance amends Article 12 of the 2008 Law, expanding the scope of mandatory HI participants. Newly included groups are:
Managers of enterprises, controllers, representatives of state capital, representatives of enterprise capital at companies and parent companies, and executive managers of cooperatives and unions of cooperatives receiving salaries;
Business household owners of registered business households; part-time workers;
Foreign nationals working in Vietnam who hold work permits, practicing certificates, or licenses issued by competent Vietnamese authorities, with fixed-term labor contracts of 12 months or longer with Vietnamese employers.
4. Revised Health Insurance Contribution Methods
Clause 13, Article 1 of the 2024 Law on Health Insurance amends Article 15 of the 2008 Law, detailing contribution methods for new participant groups under Points b and đ, Clause 1, Article 12 of the 2024 Law:
Managers of enterprises, controllers, representatives of state capital, enterprise capital representatives as prescribed by law; members of boards of directors, CEOs, directors, controllers, or other elected management positions in cooperatives or unions of cooperatives who are not salaried;
Business household owners of registered business households falling under the mandatory social insurance participation as per social insurance laws.
These groups may contribute via business households, enterprises, cooperatives, or unions of cooperatives they manage, with payment options of monthly, quarterly, or biannual contributions.
5. Additional Deadline for Health Insurance Contributions
Clause 13, Article 1 of the 2024 Law on Health Insurance adds Clause 8 to Article 15 of the 2008 Law, defining the latest deadlines for employers to pay HI contributions:
For monthly payments, the deadline is the last day of the following month.
For quarterly or biannual payments, the deadline is the last day of the month following the payment cycle
LAW NO. 41/2024/QH15: LAW ON SOCIAL INSURANCE
On 29 June 2024, the National Assembly of the Socialist Republic of Vietnam enacted Law No. 41/2024/QH15 on Social Insurance (Social Insurance Law 2024). Under Article 39 of the Social Insurance Law 2024, regulations on evasion of mandatory social insurance and unemployment insurance contributions are as follows:
After 60 days from the expiration of the deadline specified in Clause 1, Article 28 of this Law, if the employer fails to register or inadequately registers the number of individuals required to participate in mandatory social insurance;
After 60 days from the deadline for unemployment insurance participation, as stipulated by the unemployment insurance laws, if the employer fails to register or inadequately registers the required participants;
Registering salaries as the basis for mandatory social insurance contributions lower than the amount specified in Clause 1, Article 31 of this Law;
Registering salaries as the basis for unemployment insurance contributions lower than the amount stipulated by unemployment insurance laws;
Failure to pay or insufficient payment of registered mandatory social insurance contributions for more than 60 days from the latest payment deadline specified in Clause 4, Article 34 of this Law, even after reminders from competent authorities under Article 35 of this Law;
Failure to pay or insufficient payment of registered unemployment insurance contributions for more than 60 days from the latest payment deadline as prescribed by unemployment insurance laws, even after reminders from competent authorities under Article 35 of this Law;
Other cases considered evasion of mandatory social insurance and unemployment insurance contributions, as prescribed by the Government.
Penalties for Violations (As per Article 41 of the 2024 Social Insurance Law):
Mandatory payment of evaded contributions: Full payment of evaded amounts, with an additional interest of 0.03% per day, calculated based on the evaded amount and the number of days of evasion, to be paid into the social insurance fund.
Administrative and criminal penalties: Violators are subject to administrative fines or criminal prosecution as prescribed by law.
Ineligibility for awards or honors: Violators will not be considered for commendations or awards.
DECISION NO 01/2025/QĐ-TTG DATED 03/01/2024 ANNUALMENT OF THE ENTIRETY OF DECISION NO. 78/2010/QD-TTG ON DUTY-FREE AND VAT-FREE VALUES OF IMPORTS SENT BY EXPRESS DELIVERY SERVICES
On January 3, 2025, the Prime Minister promulgated Decision No. 01/2025/QD-TTg annulment of the entirety of Decision No. 78/2010/QD-TTg on duty-free and VAT-free values of imports sent by express delivery services
Previously, under Decision No. 78/2010/QD-TTg, the tax exemption for imported goods sent via express delivery services was applied as follows:
Imported goods sent via express delivery services with a value of 1,000,000 VND or less were exempt from import duties and value-added tax (VAT).
Imported goods sent via express delivery services with a value above 1,000,000 VND were subject to import duties and VAT in accordance with legal regulations.
However, when Decision No. 01/2025/QD-TTg officially comes into effect on February 18, 2025, the above provisions will be repealed, specifically:
All imported goods sent via express delivery services, including goods valued at 1,000,000 VND or less, will be subject to import duties and VAT in accordance with current legal regulations.
OFFICIAL DISPATCH NO. 6068/TCHQ-TXNK REGARDING THE IMPLEMENTATION OF RESOLUTION NO. 174/2024/QH15 ON CONTINUED VAT REDUCTION FROM JANUARY 1, 2025, TO JUNE 30, 2025
The General Department of Customs has issued an official dispatch to provincial and municipal Customs Departments, instructing enterprises to implement Resolution No. 174/2024/QH15, approved by the National Assembly on November 30, 2024, which allows for the continued application of the value-added tax (VAT) reduction policy from January 1, 2025, to June 30, 2025. The main points are as follows:
VAT reduction policy:
A 2% reduction in the VAT rate applies to goods and services specified in Point a, Section 1.1, Clause 1, Article 3 of Resolution No. 43/2022/QH15.
Effective period: From January 1, 2025, to June 30, 2025.
Instructions for declaration on the VNACCS/VCIS system:
When preparing electronic customs declarations, enterprises must select code VB235 in the field "Tax rate/application code and other levies" from on 12:00 AM January 1, 2025, to apply the 8% VAT rate to goods eligible for the tax reduction under Resolution No. 174/2024/QH15.
Notes: The VB235 code does not apply to the following cases:
Goods not subject to VAT.
Goods subject to VAT rates of 0% or 5% under the VAT Law.
Goods not eligible for tax reduction under Resolution No. 174/2024/QH154/QH15.
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