On June 30, 2025, the Government issued Decree 174/2025/ND-CP stipulating the policy of reducing value added tax according to Resolution 204/2025/QH15 dated June 17, 2025 of the National Assembly.
Accordingly, Clause 1, Article 1 of Decree 174/2025/ND-CP stipulates the reduction of value added tax for 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). Details in Appendix I issued with Decree 174/2025/ND-CP.
- Goods and services subject to special consumption tax (except for gasoline). Details in Appendix II issued with Decree 174/2025/ND-CP.
- The reduction of value-added tax for each type of goods and services as prescribed above is applied uniformly at the stages of import, production, processing, and commercial business.
In case the goods and services specified in Appendices I and II issued with Decree 174/2025/ND-CP are not subject to value added tax or are subject to 5% value added tax as prescribed in the Law on Value Added Tax 2024, they must comply with the provisions of the Law on Value Added Tax 2024 and are not subject to reduction in value added tax.
Thus, according to the above regulations, the group of goods and services not eligible for 2% VAT reduction from July 1, 2025 includes:
(1) Telecommunications;
(2) Financial activities;
(3) Bank;
(4) Securities;
(5) Insurance;
(6) Real estate business;
(7) Metal products;
8. Mineral products (except coal);
9. Goods and services subject to special consumption tax (except for gasoline).
