The Vietnamese government has extended the reduced value-added tax (VAT) rate from 10% to 8% for eligible goods and services during the first half of 2025, effective from 1 January to 30 June. The new tax policy was introduced in Decree No. 180/2024/ND-CP, which implements a VAT reduction for certain goods and services, in accordance with National Assembly Resolution No. 174/2024/QH15.
This announcement was made by the Vietnamese government news portal on 31 December 2024.
The new tax policy shall 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, 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 according to the law on information technology.
As the policy is applied in the first half of 2025, it would result in a budget deficit of around VND 26.1 trillion (over USD 1.02 billion), the Government estimated.
The 2% reduction in VAT has been introduced since 2022 to aid economic growth following the COVID-19 pandemic.
