In order to restore and rapidly develop production and business activities, promote growth, prioritize a number of important industries and fields, and strive to achieve the goals of the 2021-2025 period, the National Assembly of Vietnam passed Resolution 43/2022/QH15 on fiscal and monetary policies to support the program of socio-economic recovery and development on January 11, 2022. One of the notable contents of the Resolution is the value-added tax VAT support for businesses. However, this support will end on December 31, 2022.
Section a, point 1.1, clause 1, Article 3 of Resolution 43/2022/QH15 stipulating the tax exemption and reduction policies for Vietnamese enterprises as follows: “a) Reducing the value-added tax rate by 2% in 2022, applicable for groups of goods and services currently applying the value-added tax rate of 10% (to become 8%), except for some of the following groups of goods and services: telecommunications, information technology, financial activities banking, securities, insurance, real estate, metals, prefabricated metal products, mining products (excluding coal mining), coke, refined petroleum products, chemicals products, goods and services subject to excise tax;”
Accordingly, in the year 2022, that is, from January 11, 2022 (the date the Resolution was passed by the XV National Assembly of the Socialist Republic of Vietnam, first extraordinary session) to December 31, In 2022, enterprises producing and trading groups of goods and services that are applying the value-added tax rate of 10% will get a 2% reduction to 8%.
However, during the application process, many businesses had questions about the tax reduction time period. Because Clause 1, Article 8 of Resolution 43/2022/QH15 stipulating the implementation provisions of Resolution 43 states: “1. This Resolution takes effect from January 11, 2022 to December 31, 2023; specifically for the fiscal policy specified at Points 1.2 and 1.3, Clause 1, Article 3 of this Resolution, applies the 2022 and 2023 budget years.”
It is because of this provision that many businesses believe that the VAT reduction period will be extended until the end of 2023, not 2022, due to the tax exemption and reduction policy specified at point 1.1, clause 1, Article 3, not the provisions of Points 1.2 and 1.3, Clause 1, Article 3 of Resolution 43 that have a different effective term.
However, it should be noted that in the content at point 1.1, clause 1 of Article 3, it was written “Reducing the value-added tax rate by 2% in 2022“. Therefore, according to this regulation, the tax reduction is only applied in 2022. In addition, to guide the application of Resolution 43, the Government of Vietnam has issued Decree 15/2022/ND-CP stipulating tax exemption and reduction policy.
Clause 1, Article 3 of Decree 15 stipulating the effect of value-added tax reduction in Article 1 of this Decree shall apply from February 1, 2022 to the end of December 31, 2022.
Therefore, until there are new Decrees, Circulars, and documents on the policy of exemption and reduction of VAT rates for 2023 from the competent authority, now, at January 1, 2023, the VAT reduction policy under Resolution 43 and Decree 15 will no longer be valid.
Group of goods and services eligible for VAT reduction
All groups of goods and services currently applying the value-added tax rate in 2022 are included in the tax reduction policy, except for some groups of goods and services related to telecommunications, information technology, financial activities banking, securities, insurance, real estate, metals, prefabricated metal products, mining products (excluding coal mining), coke, refined petroleum products, chemicals products, goods and services subject to excise tax.
According to Decree 15, specific groups of goods and services include:
– Telecommunications, financial activities banking, securities, insurance, real estate, metals, prefabricated metal products, mining products (excluding coal mining), coke, refined petroleum products, chemicals products are detailed in Appendix I issued together with Decree 15/2022/ND-CP.
– Goods and services subject to excise tax are detailed in Appendix II issued together with Decree 15/2022/ND-CP.
– Information technology under the law on information technology is detailed in Appendix III issued together with Decree 15/2022/ND-CP.
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