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Official notice on 2% VAT reduction until the end of 2024.

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Official notice on 2% vat reduction until the end of 2024

On 30 June 2024, the Vietnamese Government formally approved a 2% VAT reduction for the last six months of 2024 by issuing Decree 72/2024/ND-CP.

This decision was made to support economic growth, attract Foreign Direct Investment (FDI), and bolster the domestic economy. This tax reduction is expected to stimulate consumption, thereby driving economic growth. It also makes the country more attractive to foreign investors, as it effectively lowers the cost of goods and services. Lastly, by reducing the tax burden on domestic companies, it helps to strengthen the domestic economy. This measure reflects the Vietnamese government’s commitment to economic recovery and development.

Accordingly, goods and services subject to a 10% VAT rate will continue to receive a 2% VAT reduction (i.e., applying a tax rate of 8%) until the end of 2024, except for goods and services specified in Appendix I, II, and III of this decree, including:

  • Telecommunications, financial activities, banking, securities, insurance, real estate, metals and products from prefabricated metals, mining 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 (detailed in Appendix III).

The VAT reduction is applied consistently to all stages of import, production, processing, and commercial business.

Enterprises with goods and services eligible for the VAT reduction must declare according to Form No. 01 in Appendix IV of this decree together with the VAT declaration.

The decree takes effect from 1 July 2024 to 31 December 2024.

Updated on July 1, 2024

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