Vietnam Reduces VAT to Stimulate Economy

Vietnam Reduces VAT to Stimulate Economy

Great news for Vietnamese consumers and businesses! Vietnam Government has just issued the Decree No. 72/2024/ND-CP regulating the value-added tax (VAT) rate deduction from 10% to 8% for a wide range of goods and services. This initiative, aimed at stimulating the economy, will be in effect from July 1, 2024, to December 31, 2024.

Key Details of the VAT Reduction in Vietnam:

Who Benefits?

• Most businesses and consumers purchasing goods and services that previously had a 10% VAT rate.

Who Doesn't?

• Certain sectors, such as telecommunications, finance, real estate, and specific products like refined petroleum, are excluded from this reduction.

Duration:

• The reduced VAT rate will be applicable for six months, from July to December 2024.

Application for Businesses:

• Businesses using the deduction method: Can directly apply the 8% VAT rate.

• Businesses using the percentage method: Can reduce their existing percentage rate by 20% when issuing invoices for qualifying goods and services.

Expected Benefits of the VAT Reduction:

• Lower prices for consumers.

• Increased economic activity.

• Support for businesses during challenging times.

Please note that the reduced rate does not apply to all goods and services. Be sure to check with your seller if you are unsure. If you have any questions regarding the VAT reduction in Vietnam, please feel free to contact us.