Decree No. 180/2024/ND-CP of the Government on VAT Reduction Policy under Resolution No. 174/2024/QH15

Decree No. 180/2024/ND-CP, issued on December 31, 2024, stipulates the value-added tax (VAT) reduction policy under Resolution No. 174/2024/QH15 of the National Assembly, dated November 30, 2024. This decree is effective from January 1, 2025, to June 30, 2025. 

Key Provisions of the Decree:

1. VAT Reduction:

   • A 2% VAT reduction is applied to goods and services currently subject to the 10% VAT rate, except for the following categories:
     • Telecommunications, financial services, banking, securities, insurance, real estate business, metals and fabricated metal products, mineral products (excluding coal mining), coke, refined petroleum products, and chemical products.
     • Goods and services are subject to special consumption tax.
     • Information technology products as regulated by the law on information technology.

2. Scope of Application:

   • The VAT reduction applies uniformly across all stages of importation, production, processing, and commercial business.
   • For extracted coal sold directly (including cases where coal is processed through screening and classification in a closed-loop process before sale), the VAT reduction applies. However, for coal listed in Appendix I of this decree, the reduction does not apply to other stages beyond extraction and sale.

3. VAT Reduction Rate:

   • Businesses using the credit method for VAT calculation will apply an 8% VAT rate to eligible goods and services.
   • Businesses (including household businesses and individual businesses) using the percentage-based method will receive a 20% reduction in the percentage-based VAT calculation rate when issuing invoices for applicable goods and services.

4. Implementation Procedures:

   • For businesses using the credit method: When issuing VAT invoices for eligible goods and services, businesses must clearly state:
     • “8%” in the VAT rate section.
     • The VAT amount and the total amount payable by the buyer.
   • For businesses using the percentage-based method: When issuing sales invoices, they must:
     • Record the full price of goods and services before the VAT reduction under the “Total amount” column.
     • Under the “Total goods and services amount” section, record the amount after the 20% reduction of the VAT calculation rate.
     • Include a note specifying the reduced amount:
       “Reduced by… (amount) equivalent to 20% of the VAT calculation rate under Resolution No. 174/2024/QH15.”

This decree aims to support businesses and individuals by reducing costs, promoting production, business activities, and consumption in the current economic context.