Extended reduced Value Added Tax rates until 31 December 2026

On 17 June 2025, the National Assembly passed a resolution to reduce VAT by 2% for the last 6 months of 2025 and the entire year of 2026, with expanded eligible groups of goods and services. The regulations take effect from 1 July 2025.

Goods and services eligible for VAT reduction

The reduced VAT rate applies to goods and services currently subject to the standard 10% VAT rate, excluding certain categories. Goods and services that are exempt from VAT or subject to the 5% VAT rate will not be eligible for the reduced rate.

Excluded categories

Less excluded goods and services eligible to VAT reduction:

• Telecommunications, financial activities, banking, securities, insurance, real estate business, metal products, and mining products (except coal). Details are provided in Appendix I of the Decree.

• Goods and services subject to special consumption tax (except gasoline). Details are provided in Appendix II of the Decree.

This means pre-cast metal products, coal from extraction, processing, and commercial stages, coke, refined petroleum, chemical products, gasoline, and information technology products are now also eligible for VAT reduction.

VAT reduction rates

Taxpayers declaring VAT under the credit method will be eligible for an 8% VAT rate on goods and services qualifying for the reduction.

• Taxpayers declaring VAT under the deemed method (percentage of revenue) will receive a 20% reduction on the applicable VAT amount when invoicing for eligible goods and services.

Procedures for eligibility and application

• The reduced VAT rate/amount must be reflected on invoices.

• For goods or services with different tax rates, the VAT invoice must clearly indicate the rate for each item/service.

• Taxpayers must declare eligible goods and services using Form 01 in Appendix IV of the Decree, along with the standard VAT declaration form.