Type: Legislation
On 29 November 2023, Vietnam’s Parliament approved an extension of the 2% VAT reduction on essential goods and services, maintaining the reduced 8% rate until 30 June 2025. The latest notification, Decree 72/2024, clarifies that the VAT cut applies to sectors such as aviation, tourism, agriculture, and social housing, while excluding IT, real estate, mining, and financial services. Businesses using the VAT deduction method must clearly state the 8% rate on invoices and distinguish it from other applicable rates for mixed supplies. This measure, first introduced in February 2022, aims to support internal consumption amid slowing economic growth, which stood at over 5% in Q3 2023. The extension reflects Vietnam’s efforts to stabilize its economy while addressing global uncertainties.
Effective date: 31 December 2024
