Decree No. 94/2023/ND-CP "Regulating value-added tax reduction policy" by Resolution No. 110/2023/QH15 dated November 29, 2023 of the National Assembly

On December 28, 2023, the Government issued Decree No. 94/2023/ND-CP, "Regulating value-added tax reduction policy by Resolution No. 110/2023/QH15 dated November 29, 2023 of the National Assembly ". The Decree takes effect from January 1, 2024, to June 30, 2024.

Pursuant to the Decree, value-added tax is reduced for groups of goods and services that are currently subject to a tax rate of 10%, except for the remaining:

- Telecommunications, financial activities, banking, securities, insurance, real estate business, metals and prefabricated metal products, mining products (excluding coal mining), coke, refined petroleum, and chemical products.

- Products and services subject to special consumption tax

- Information technology under the Law on Information Technology

- Corporations and economic groups that carry out a closed process to sell are also subject to value-added tax reductions on sold mined coal products.

In cases where goods and services listed in Appendixes I, II, and III issued with the Decree are not subject to value-added tax or are subject to 5% value-added tax according to the provisions of the Tax Law, Added value shall comply with the provisions of the Law on Value Added Tax, and no reduction in value added tax is allowed.

Value-added tax reduction.

- Business establishments that calculate value-added tax using the deduction method may apply the 8% value-added tax rate for goods and services specified in Clause 1, Article 1.

- Business establishments (including business households and business individuals) that calculate value-added tax according to the percentage method on revenue are entitled to a 20% reduction in the percentage rate to calculate value-added tax when implementing. Currently issue invoices for goods and services eligible for value-added tax reduction specified in Clause 1, Article 1.

Step and procedures

- For business establishments specified in Point a, Clause 2, Article 1, when making value-added invoices providing goods and services subject to value-added tax reduction at the value-added tax rate line. Increase write "8%"; value-added tax; the total amount the buyer must pay. Based on the value-added invoice, business establishments selling goods and services declare output value-added tax, and business establishments purchasing goods and services declare input value-added tax deduction, according to the reduced tax amount recorded on the value-added invoice.

- For business establishments specified in Point b, Clause 2, Article 1, when preparing sales invoices for providing goods and services subject to value-added tax reduction, write the total amount in the "Amount" column. Goods and services before reduction, in the line "Plus amount of goods and services", write down the number that has been reduced by 20% as a percentage of revenue, and also note: "reduced....(amount) corresponds to 20% of the percentage to calculate value added tax under Resolution No. 110/2023/QH15"

In case a business establishment, as prescribed in Point a, Clause 2, Article 1, applies different tax rates when selling goods or providing services. The value-added invoice must clearly state the tax rate of each good. , services as prescribed in Clause 3, Article 1.

In the case of a business establishment as prescribed in Point b, Clause 2, Article 1, when selling goods or providing services, the sales invoice must clearly state the reduced amount as prescribed in Clause 3, Article 1.

In case the business establishment has issued an invoice and declared the tax rate or percentage to calculate the value-added tax that has not been reduced according to the provisions of this Decree, the seller and buyer will process the invoice. Prepared invoices and documents according to legal regulations. Under the invoice, after processing, the seller declares output tax adjustments, and the buyer declares input tax adjustments (if any).

Business establishments specified in Article 1 shall declare goods and services eligible for value-added tax reduction according to form No. 01 in Appendix IV issued with this Decree along with the value-added tax declaration.

Enforcement

The Decree takes effect from January 1, 2024, to June 30, 2024

Implementation organisation

Ministers, Heads of ministerial-level agencies, Heads of Government agencies, Chairmen of People's Committees of provinces and centrally run cities and relevant businesses, organisations and individuals.

Details of Decree No. 94/2023/ND-CP: HERE!

Source: Compiled by A Chau Environment