VAT REDUCTION POLICY UPDATE – EFFECTIVE FROM JULY 1, 2025

As part of the Government’s effort to stimulate domestic demand and support economic recovery, Decree No. 174/2025/NĐ-CP has officially been issued, detailing the continued implementation of a 2% reduction in Value-Added Tax (VAT) in accordance with Resolution 204/2025/QH15 of the National Assembly.

Key Highlights:

Applicable VAT reduction

  • From 10% to 8% for eligible goods and services.
  • Effective from July 1, 2025, to December 31, 2026.

 Scope of application

  • Enterprises applying the credit method.
  • Business households and individuals will receive a 20% reduction in the VAT rate based on revenue.

Exclusions include: Financial services, banking, insurance, securities, real estate, telecommunications, mining, and goods/services subject to special consumption tax.

Invoicing & declaration guidance

  • Proper invoice wording and VAT declaration are critical to ensuring full compliance and eligibility.
  • Enterprises issuing invoices before the effective date must revise them accordingly to apply the new rates.

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 Why this matters?

  •  This policy provides timely financial relief for businesses and consumers, while also aligning with broader economic stimulus efforts.

At S4B Vietnam, we see this as a strategic opportunity for businesses to optimize operational costs, ensure tax compliance, and enhance cash flow visibility.

 S4B – Strategic Payroll & HR Partner

Our team stands ready to:

  • Provide tailored guidance on invoice adjustment & declaration
  • Ensure your organization leverages this policy to the fullest extent
  • Accompany your finance & HR teams with proactive, compliance-first support

S4B Vietnam

  • Address: Unit 602A, Tower A, Handi Resco Office Building. 521 Kim Ma Street, Ba Dinh District, Hanoi
  • Tel: + 84 24 3974 4181
  • Email: service@s4b.com.vn