On 11 January 2022, the National Assembly of Vietnam passed a tax reduction policy under the socio-economic recovery and development program issued under Resolution 43/2022/QH15, under which the VAT rate for qualified goods and services subject to 10% VAT will be reduced to 8% in 2022.
To implement the policy and provide detailed guidance, the government issued Decree 15/2022/ND-CP ("Decree 15") dated 28 January 2022. The VAT reduction policy takes effect from 1 February 2022 and ends on 31 December 2022.
In more detail
Decree 15 provides more details regarding the implementation of the VAT reduction policy, as follows:
- Goods and services currently subject to the VAT rate of 10% will benefit from a reduced VAT rate of 8%, effective from 1 February 2022 until 31 December 2022.
- The VAT reduction policy is not applicable for the following three groups of goods and services:
- Group 1: Telecommunications, financial activities, banking, securities, insurance, real estate business, metals and prefabricated products, mining products (excluding coal mining), coke coal, refined petroleum, chemical products (Details of group 1 are listed in Appendix I, attached to Decree 15.)
- Group 2: Goods and services subject to special consumption tax (Details of group 2 are listed in Appendix II, attached to Decree 15.)
- Group 3: Information technology under the Law on the Information Technology (Details of group 3 are listed in Appendix III, attached to Decree 15.)
If the 10%-VAT-rated goods and services do not fall within the three aforementioned groups, such goods and services are qualified for the VAT reduction policy.
- The VAT reduction policy applies to both business units adopting the VAT credit method and the direct method. For those adopting the VAT credit method, the VAT invoice must indicate the VAT rate of "8%" at the tax rate line.