On 30 November 2024, the National Assembly passed a Resolution at the 8th session of the XV National Assembly. The Resolution extends the 2% value-added tax (VAT) reduction for certain goods and services, continuing the policy implemented since February 2022, to support socio-economic recovery and development from 01 January 2025 to 30 June 2025.

On 03 December 2024, the Ministry of Finance issued Document 13145/BTC-CST regarding the draft Decree on 2% VAT reduction policy for the first 6 months of 2025 (“Draft Decree”), seeking feedback on the draft Decree following the Resolution.

The Draft Decree follows the same VAT reduction policy as applied since 1 July 2024 under Decree 72/2024/ND-CP. Main points are as follows:

Subjects eligible for 2025 VAT reduction

According to Article 1, Clause 1 of the Draft Decree, VAT will be reduced for goods and services currently subject to 10% tax rate, except for:

• Telecommunications, finance, banking, securities, insurance, real estate, metals and prefabricated metal products, mining products (excluding coal mining), coke, refined petroleum, chemical products.
• Goods and services subject to special consumption tax.
• Information technology as defined by IT laws.

Goods and services that are exempt from VAT or subject to the 5% VAT rate will not be eligible for the reduced rate.

VAT reduction rates

• Taxpayers declaring VAT under the credit method: 2% VAT reduction on qualifying goods and services.
• Taxpayers declaring VAT under the deemed method: 20% reduction on the applicable VAT amount when invoicing for eligible goods and services.

Effective Period

01 January 2025 to 30 June 2025.