Officially issued Decree 174/2025/ND-CP – VAT reduction of 2% from July 1, 2025 [/caption]After a period of consultation and finalization,The Government has officially issued Decree No. 174/2025/ND-CPon June 30, 2025, policy regulationsReduce value added tax (VAT) by 2%according to Resolution 204/2025/QH15 of the National Assembly. The Decree takes effect from dateJuly 1, 2025 through December 31, 2026, applied synchronously at all stages of import, production, processing and trade.
The Decree clearly stipulates:
Business establishments calculate VAT accordinglydeduction methodwill be appliedtax rate 8%instead of 10%.
Individuals and business households are calculated accordinglyDirect method (percentage) on revenueOkay20% reduction in percentagecalculate VAT.
Tax reduction policyApplicable to most goods and services that are subject to a tax rate of 10%, except for the following groups:
Telecommunications, finance, banking, insurance, securities;
Real estate business;
Mining products (except coal), metals;
Goods and services subject to special consumption tax (except gasoline).
The specific list is specified inAppendix I & IIattached to the Decree.
When preparing a VAT invoice, the business clearly states the tax rate "8%" and the total tax amount has been reduced.
For households and individuals doing business based on a percentage of revenue, it must be noted "reduce 20% of the VAT calculation rate according to Resolution 204/2025/QH15".
Tax reduction from 10% to 8% [/caption]This tax reduction policy continues to be as effective as previous periods, with the goal of:
Stimulate domestic consumption, reduce prices of goods and services for people;
Business supportreduce input costs, increase competitiveness;
Create more jobs, promoting production and business, contributing to GDP growth.
Expected,Reduce VAT by 2% for 18 monthsIn the future, budget revenue will decrease120,000 billion VND, but is expected tocompensated by growth in production and consumption
Check your list of goods and servicesWhether it is within the scope of tax reduction or not (according to Appendix I & II).
Adjust invoice software, prepare appropriate tax declaration forms.
Update accounting department, internal finance to comply with regulations.
Prepare appropriate documents and documents, avoid errors when being inspected by tax authorities.
See Decree 174/2025/ND-CP hereClick to view the official PDF file
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