Decree No. 174/2025/ND-CP

DECREE

ON THE VALUE-ADDED TAX REDUCTION POLICY PURSUANT TO RESOLUTION NO. 204/2025/QH15 DATED JUNE 17, 2025 OF THE NATIONAL ASSEMBLY

Pursuant to the Law on Organization of the Government dated February 18, 2025;

Pursuant to the Law on Organization of Local Government dated June 16, 2025;

Pursuant to the Law on Value-Added Tax dated November 26, 2024;

Pursuant to the Law on Tax Administration dated June 13, 2019; the Law amending and supplementing the Law on Securities, the Law on Accounting, the Law on Independent Audit, the Law on the State Budget, the Law on Management and Use of Public Property, the Law on Tax Administration, the Law on Personal Income Tax, the Law on the National Reserve, and the Law on Handling of Administrative Violations dated November 29, 2024;

Pursuant to Resolution No. 204/2025/QH15 dated June 17, 2025 of the National Assembly on value-added tax reduction;

At the proposal of the Minister of Finance;

The Government promulgates this Decree on the value-added tax reduction policy pursuant to Resolution No. 204/2025/QH15 dated June 17, 2025 of the National Assembly.

Article 1. Value-added tax reduction

1. To reduce value-added tax for groups of goods and services currently subject to the 10% duty rate, except for the following groups of goods and services:

a) Telecommunications, financial activities, banking, securities, insurance, real estate business, metal products, mining products (except coal). Details are provided in Appendix I issued together with this Decree.

b) Goods and services subject to excise tax (except gasoline). Details are provided in Appendix II issued together with this Decree.

c) The value-added tax reduction for each type of goods and services specified in Clause 1 of this Article shall be applied uniformly at the stages of import, production, processing, and commercial trading.

Where goods and services set out in Appendices I and II issued together with this Decree are subject to non-taxable treatment or the 5% value-added tax rate under the Law on Value-Added Tax, the provisions of the Law on Value-Added Tax shall apply and such goods and services shall not be eligible for the value-added tax reduction.

2. Level of value-added tax reduction:

a) Business establishments calculating value-added tax by the credit method shall apply the value-added tax rate of 8% to the goods and services specified in Clause 1 of this Article.

b) Business establishments (including business households and individuals) calculating value-added tax by the percentage-of-revenue method shall be entitled to a 20% reduction in the percentage rate used to calculate value-added tax when issuing invoices for goods and services eligible for the value-added tax reduction specified in Clause 1 of this Article.

3. Order and procedures for implementation:

a) For business establishments specified at Point a, Clause 2 of this Article, when preparing a value-added tax invoice supplying goods and services eligible for the value-added tax reduction, the value-added tax rate line shall state "8%"; the value-added tax amount; and the total amount payable by the buyer. Based on the value-added tax invoice, the business establishment selling the goods or services shall declare output value-added tax, and the business establishment purchasing the goods or services shall declare the input value-added tax credit according to the reduced tax amount stated on the value-added tax invoice.

b) For business establishments specified at Point b, Clause 2 of this Article, when preparing a sales invoice supplying goods and services eligible for the value-added tax reduction, the "Amount" column shall state the full amount of the goods or services before reduction, the "Total amount of goods and services" line shall state the amount after the 20% reduction of the percentage rate on revenue, and the invoice shall bear the note: "reduced by ... (amount) corresponding to a 20% reduction of the percentage rate used to calculate value-added tax under Resolution No. 204/2025/QH15".

4. Where a business establishment specified at Point a, Clause 2 of this Article applies different duty rates when selling goods or providing services, the value-added tax invoice must clearly state the duty rate applicable to each good or service in accordance with Clause 3 of this Article.

Where a business establishment specified at Point b, Clause 2 of this Article sells goods or provides services, the sales invoice must clearly state the reduced amount in accordance with Clause 3 of this Article.

5. Where a business establishment has issued an invoice and declared tax using the duty rate or percentage rate for calculating value-added tax without applying the reduction under this Decree, the seller and the buyer shall handle the issued invoice in accordance with the law on invoices and documents. Based on the invoice after such handling, the seller shall declare an adjustment to output tax and the buyer shall declare an adjustment to input tax (if any).

6. Business establishments specified in this Article shall declare the goods and services eligible for the value-added tax reduction using Form No. 01 in Appendix III issued together with this Decree, together with the value-added tax return.

Article 2. Implementation provisions

1. This Decree takes effect from July 1, 2025 through December 31, 2026.

2. Ministries shall, according to their functions and duties, and the People's Committees of provinces and centrally-run cities shall direct relevant agencies to carry out communication, guidance, inspection, and supervision so that consumers understand and benefit from the value-added tax reduction specified in Article 1 of this Decree, focusing in particular on measures to stabilize the supply and demand of goods and services eligible for the value-added tax reduction in order to keep the market price level (exclusive of value-added tax) stable from July 1, 2025 through December 31, 2026.

3. Any problems arising in the course of implementation shall be reported to the Ministry of Finance for guidance and resolution.

4. Ministers, Heads of ministerial-level agencies, Heads of Government-attached agencies, Chairpersons of the People's Committees of provinces and centrally-run cities, and related enterprises, organizations, and individuals shall be responsible for implementing this Decree

APPENDIX I

LIST OF GOODS AND SERVICES NOT ELIGIBLE FOR THE VALUE-ADDED TAX RATE REDUCTION (Issued together with Decree No. 174/2025/ND-CP dated June 30, 2025 of the Government)

Notes:

- This Appendix List of goods and services not eligible for the value-added tax reduction is a part of the Appendix List and content of the Vietnam Standard Product Classification System issued together with Decision No. 43/2018/QD-TTg dated November 1, 2018 of the Prime Minister promulgating the Vietnam Standard Product Classification System.

- The HS code in column (10) is for reference purposes only. The determination of the HS code for goods actually imported shall be carried out in accordance with the regulations on classification of goods under the Customs Law and its guiding legal documents.

- For item lines marked with the symbol (*) in column (10), the HS code shall be declared according to the actual imported goods.

APPENDIX II

LIST OF GOODS AND SERVICES SUBJECT TO EXCISE TAX NOT ELIGIBLE FOR THE VALUE-ADDED TAX REDUCTION (Issued together with Decree No. 174/2025/ND-CP dated June 30, 2025 of the Government)

I. Goods and services subject to excise tax under regulations from July 1, 2025 through December 31, 2025

1. Goods:

a) Cigarettes, cigars and other products made from tobacco plants for smoking, inhaling, chewing, sniffing, or holding in the mouth;

b) Alcohol;

c) Beer;

d) Automobiles of under 24 seats, including automobiles designed to carry both passengers and cargo with two or more rows of seats and a fixed partition between the passenger compartment and the cargo compartment;

dd) Two-wheeled motorcycles and three-wheeled motorcycles with a cylinder capacity of over 125 cm3;

e) Aircraft and yachts;

g) Air conditioners with a capacity of 90,000 BTU or less;

h) Playing cards;

i) Votive gilt paper and joss paper.

2. Services:

a) Discotheque business;

b) Massage and karaoke business;

c) Casino business; prize-winning electronic games, including games played on jackpot machines, slot machines, and similar machines;

d) Betting business;

dd) Golf business, including the sale of membership cards and golf-playing tickets;

e) Lottery business.

II. Goods and services subject to excise tax under regulations from January 1, 2026 through December 31, 2026

1. Goods include:

a) Tobacco products as prescribed by the Law on Prevention and Control of Tobacco Harms;

b) Alcohol as prescribed by the Law on Prevention and Control of Harms of Alcohol and Beer;

c) Beer as prescribed by the Law on Prevention and Control of Harms of Alcohol and Beer;

d) Motor vehicles of under 24 seats, including: automobiles for carrying passengers; four-wheeled motor vehicles for carrying passengers; pick-up trucks for carrying passengers; double-cab pick-up trucks for carrying cargo; VAN-type cargo vehicles with two or more rows of seats and a fixed partition between the passenger compartment and the cargo compartment;

dd) Two-wheeled motorcycles and three-wheeled motorcycles with a cylinder capacity of over 125 cm3;

e) Airplanes, helicopters, gliders, and yachts;

g) Air conditioners with a capacity of over 24,000 BTU up to 90,000 BTU, except those designed by the manufacturer to be installed only on means of transport, including automobiles, railway carriages, airplanes, helicopters, ships, and boats. Where an organization or individual manufactures for sale, or an organization or individual imports, the outdoor and indoor units separately, the goods sold or imported (outdoor unit, indoor unit) shall still be subject to excise tax in the same manner as a complete product (a complete air conditioner);

h) Playing cards;

i) Votive gilt paper and joss paper, excluding joss paper items that are children's toys and teaching aids;

k) Soft drinks under the National Standard (TCVN) with a sugar content of over 5g/100ml.

2. Services include:

a) Discotheque business;

b) Massage and karaoke business;

c) Casino business; prize-winning electronic games, including games played on jackpot machines, slot machines, and similar machines;

d) Betting business, including sports betting, entertainment betting, and other forms of betting as prescribed by law;

dd) Golf business;

e) Lottery business.

Note: The Appendix List of goods and services subject to excise tax not eligible for the value-added tax reduction (excluding goods and services subject to non-taxable treatment for excise tax and gasoline of all kinds) is compiled under the Law on Excise Tax No. 27/2008/QH12 as amended and supplemented by Law No. 70/2014/QH13, Law No. 71/2014/QH13, Law No. 106/2016/QH13 and Law No. 03/2022/QH15, and the Law on Excise Tax No. 66/2025/QH15.

APPENDIX III

(Issued together with Decree No. 174/2025/ND-CP dated June 30, 2025 of the Government)