Decree No 44/2023/ND-cp prescribing value-added tax reduction under resolution

Pursuant to the Law on Government Organization dated June 19, 2015; the Law on Amendments to the Law on Government Organization and the Law on Local Government Organization dated November 22, 2019; 

Pursuant to the Law on value-added tax dated June 03, 2008; the Law on amendments to the Law on value-added tax dated June 19, 2013; the Law on amendments to the Law on value-added tax, the Law on Excise Tax and the Law on Tax Administration dated April 06, 2016;

Pursuant to the Law on amendments to the Laws on taxation dated November 26, 2014; 

Pursuant to the Law on Tax Administration dated June 13, 2019;

Pursuant to the Resolution No. 101/2023/QH15 dated June 24, 2023 on the 5^th meeting of the 15^th National Assembly; 

At the request of the Minister of Finance of Vietnam;

The Government promulgates a Decree prescribing value-added tax (VAT) reduction under the Resolution No. 101/2023/QH15 dated June 24, 2023 of the National Assembly of Vietnam.

Article 1. VAT reduction

1. VAT on goods and services that are currently subject to 10% VAT shall be reduced, except the following goods and services:

a) Telecommunication, financial activities, banking activities, securities, insurance, trading of real estate, metal and precast metal products, mining products (excluding coal mining), coke mining, refined oil, chemical products. Further details are provided in Appendix I enclosed herewith.

b) Goods and services subject to excise tax. Further details are provided in Appendix II enclosed herewith.

c) Information technology products and services as prescribed in the Law on information technology.  Further details are provided in Appendix III enclosed herewith.

d) VAT on goods and services of a specific type prescribed in Clause 1 of this Article shall be reduced consistently at all stages, including import, production, processing and trading.  Coal products mined for sale (including coal products mined and then washed, sieved and classified under a closed process before they are sold) are eligible for VAT reduction. Coal products in Appendix I enclosed herewith are not eligible for VAT reduction at any stages other than the mining stage.

Coal products produced under a closed process of economic corporations or groups shall be also eligible for VAT reduction.

In case any of the goods and services in Appendixes I, II and III enclosed herewith is not subject to VAT or is subject to 5% VAT in accordance with the Law on value-added tax, VAT on that good or service shall be paid in accordance with the Law on value-added tax and shall not be reduced.

2. VAT reduction rates

a) Business establishments that pay VAT using the credit-invoice method shall pay 8% VAT on the goods and services specified in Clause 1 of this Article.

b) Business establishments (including household businesses and individual businesses) that pay VAT using the direct method (as a percentage (%) on revenue) shall be eligible for 20% reduction in the rate (%) used as the basis for calculating VAT when issuing invoices for the goods and services eligible for VAT reduction specified in Clause 1 of this Article.

3. VAT reduction procedures

a) When issuing VAT invoices for goods and services eligible for VAT reduction, the business establishments specified in Point a Clause 2 of this Article shall write “8%” on the “VAT rate” line, VAT amount payable, and total amount payable by the buyer on the issued invoice. The good seller or service provider shall declare output VAT and the good buyer or service user shall declare and deduct input VAT according to the VAT amount written on the VAT invoice.

b) When issuing sales invoices for goods and services eligible for VAT reduction, the business establishments specified in Point b Clause 2 of this Article shall write the full amount of the good or service before reduction in the “Thành tiền” (“Amount”) column, the amount payable after reduction (by 20% of the rate (%) on revenue) on the “Cộng tiền hàng hóa, dịch vụ” (“Total amount”) line, and the note “đã giảm… (số tiền) tương ứng 20% mức tỷ lệ % để tính thuế giá trị gia tăng theo Nghị quyết số 101/2023/QH15” (“an amount of……., equivalent to 20% of the rate (%) used as the basis for calculating VAT, is reduced according to the Resolution No. 101/2023/QH15”) on the issued invoice.

4. If a business establishment prescribed in Point a Clause 2 of this Article sells or provides goods or services subject to different tax rates, the tax rate on each good or service must be written on its issued VAT invoice as prescribed in Clause 3 of this Article.

When a business establishment prescribed in Point b Clause 2 of this Article sells goods or provides services, the reduced amount must be written on its issued sales invoice as prescribed in Clause 3 of this Article.

5. In case an invoice indicating the VAT rate or the rate (%) used as the basis for calculating VAT which is not yet reduced according to this Decree has been issued, this invoice shall be corrected by the seller and the buyer in accordance with regulations of law on invoices and records. The seller shall adjust output VAT and the buyer shall adjust input VAT (if any) according to the invoice which has been corrected.

6. The business establishments specified in this Article shall make and submit the declaration of their goods and services that are eligible for VAT reduction using Form No. 01 in Appendix IV enclosed herewith together with the VAT return form.

Article 2. Effect and implementation organization

1. This Decree takes effect from July 01, 2023 to December 31, 2023 inclusively.

2. Ministries, within the ambit of their assigned functions and tasks, and Provincial People’s Committees shall direct relevant agencies to disseminate, instruct and inspect the implementation of regulations on VAT reduction in Article 1 of this Decree, especially solutions for stabilizing supply and demand for goods and services eligible for VAT reduction so as to ensure stable market prices of goods and services (prices exclusive of VAT) for the period from July 01, 2023 to December 31, 2023 inclusively.

3. Difficulties that arise during the implementation of this Decree should be reported to the Ministry of Finance of Vietnam for consideration.

4. Ministers, heads of ministerial agencies, heads of Governmental agencies, Chairpersons of Provincial People’s Committees and relevant enterprises, organizations and individuals are responsible for the implementation of this Decree.