The Value-Added Tax (VAT) reduce from 10% down 8% in 2022 and 2023
Because of the complicated development of COVID-19 in 2020 and 2021, the operation of businesses and people faces many challenges. To support businesses and people to overcome difficulties and promote production and business development, The National Assembly of the Socialist Republic of Vietnam approved the Resolution on fiscal and monetary policies to support the program of socio-economic recovery and development on January 11, 2022.
Whereby, the Value-Added Tax (VAT) rate for groups of goods and services currently subject to 10% VAT will be reduced to 8%. The application period is from January 12, 2021 to December 31, 2023.
However, the reduction of VAT will not apply to the following groups of goods and services:
- Telecommunications, information technology;
- Financial activities, banking, securities, insurance;
- Real estate business;
- Metal production and production of products from prefabricated metals;
- Mining industry (excluding coal mining), coking coal production, refined petroleum;
- The production of chemicals and chemical products;
- Products of goods and services subject to excise tax.
The resolution also allows calculating deductible expenses to be included when determining income subject to corporate income tax for expenditures supporting and funding of enterprises and organizations for COVID-19 prevention and control activities in Vietnam for the 2022 tax period.
In addition to the issue of VAT reduction of 2%, the Resolution also states the support of interest rates for enterprises, cooperatives, business households (2% per year) up to VND 40,000 billion through the system of commercial banks for some important sectors; enterprises, cooperatives, business households capable of repaying debts, recovery; loans for renovation of old apartments, construction of social housing, houses for workers to rent and rent buy.
Please contact us for any further concerns related to the topic of this article.
Asia Business Consulting is a boutique consulting firm specializing in corporate establishment, legal and business advisory, tax and payroll compliance, HR administration, market research to multinationals investing in Vietnam.