Adding some objects to the list of goods and services eligible for value added tax reduction from July 1

(DN) - According to Decree No. 174/2025/ND-CP (Decree 174) issued by the Government on June 30, 2025, regulating the policy of reducing value added tax (VAT) according to Resolution No. 204/2025/QH15 dated June 17, 2025 of the National Assembly, from July 1, 2025, VAT reduction will be applied to groups of goods and services currently applying a tax rate of 10%.

Many consumer goods continue to have their value-added tax reduced from 10% to 8% until the end of 2026. Photo: Ngoc Lien

Specifically, from July 1, 2025 to December 31, 2026, VAT reduction will be applied to groups of goods and services currently subject to a tax rate of 10%, except for the following groups of goods and services: telecommunications, financial activities, banking, securities, insurance, real estate business, metal products, mining products (except coal). Goods and services subject to special consumption tax (except gasoline).

The reduction of VAT for each type of goods and services stipulated in Decree 174 is applied uniformly at the stages of import, production, processing, and commercial business. In case the goods and services mentioned in this Decree are not subject to VAT or are subject to 5% VAT according to the provisions of the Law on VAT, the provisions of the Law on VAT shall apply and VAT shall not be reduced.

The VAT rate is reduced from 10% to 8%. In particular, business establishments calculating VAT according to the deduction method are entitled to apply the VAT rate of 8% for goods and services specified in Decree 174. Business establishments (including business households and business individuals) calculating VAT according to the percentage method on revenue are entitled to a 20% reduction in the percentage rate for calculating VAT when issuing invoices for goods and services eligible for VAT reduction according to regulations.

Thus, compared to previous VAT reductions, Decree 174 this time has many new points. In particular, it expands the subjects eligible for VAT reduction (from 10% to 8%) for areas such as: transportation business, logistics, chemical products, information technology services.

In 2024, Dong Nai province (old) will reduce VAT from 10% to 8% according to regulations, about 446 billion VND. Reducing VAT will help people and businesses directly benefit from this policy. For businesses, reducing VAT will help reduce production costs, lower product prices, thereby helping businesses increase stability, expand production and business, and create more jobs for workers.

Ngoc Lien

Source: https://baodongnai.com.vn/tin-moi/202507/bo-sung-mot-so-doi-tuong-vao-danh-muc-hang-hoa-dich-vu-duoc-giam-thue-gia-tri-gia-tang-tu-1-7-1b3007a/