Customs implements VAT reduction policy from July 1st

Reducing 2% VAT will help stimulate consumer demand and remove difficulties for businesses and the economy. Photo: H.Anh

On June 30, 2024, the Government issued Decree 72/2024/ND-CP stipulating the VAT reduction policy according to Resolution No. 142/2024/QH15 for the period from July 1 to December 31. /2024.

Regarding the VAT reduction policy, the General Department of Vietnam Customs has requested the customs departments of provinces and cities to implement a 2% reduction in VAT rates for groups of goods that are currently subject to a 10% VAT rate (to 8%), excluding the following groups of goods: telecommunications, information technology, metals, fabricated metal products, mining products (excluding coal mining), coke, refined petroleum, chemical products, goods subject to special consumption tax, in accordance with the provisions of Clause 1, Article 1 of Decree No. 72/2024/ND-CP.

The customs departments of provinces and cities shall implement the regulations for goods that are not eligible for VAT reduction, which are specified in Appendices I, II, III attached to Decree No. 72/2024/ND-CP.

The General Department of Vietnam Customs has also issued guidance to units on how to guide businesses to declare on the VNACCS/VCIS system. Accordingly, select code VB225 in the "Tax rate/tax rate and other charges application code" information indicator box on the electronic import declaration registered from 0:00 on July 1, 2024 to declare the VAT rate of 8% for goods that are eligible for VAT reduction according to the provisions of Resolution No. 142/2024/QH15 and Decree No. 72/2024/ND-CP.

The General Department of Vietnam Customs emphasizes that code VB225 does not apply to cases of goods that are not subject to VAT, goods that are subject to VAT at a VAT rate of 0%, 5%, 10% as prescribed by the Law on VAT.