The Vietnamese government has announced that it will maintain the 2% reduction in value-added tax (VAT) for goods and services until the end of the year. This move is intended to help businesses and individuals cope with ongoing global economic challenges. However, certain sectors such as telecommunications, finance, securities, insurance, and real estate services, along with specific products like metals, mining products, and information technology, are not eligible for this tax reduction.
The decision comes after the Vietnam Federation of Commerce and Industry (VCCI) proposed a 2% reduction in VAT for all goods and services but faced challenges in determining which goods would qualify for a reduced 8% tax rate. To ensure clarity for businesses navigating these tax regulations, the government has made clear that VAT invoices must clearly state different tax rates for various goods and services.
Businesses using the percentage method for tax calculation will receive a 20% reduction in the tax percentage when issuing invoices. The VAT reduction applies uniformly across all stages of import, production, processing, and commercial business. This means that businesses must clearly state different tax rates on their invoices to avoid confusion among customers.
The VAT reduction benefits both businesses and consumers as it reduces the overall burden of taxes on goods and services. Extending the 2% tax reduction period by another six months is expected to reduce budget revenue by approximately 24,000 billion VND in the second half of the year, totaling nearly 47,500 billion VND for the whole year.
Overall, this policy aims to alleviate economic pressures during challenging times by providing support to businesses and individuals alike.
