On June 17, 2025, the Vietnam National Assembly passed Resolution 204/2025/QH15, extending the 2% VAT rate reduction. Following this, on 30 June 2025, the Government of Vietnam issued Decree 174/2025/ND-CP, which provides implementation guidance for the VAT reduction.
The reduced 2% VAT rate will be in effect from 1 July 2025 until 31 December 2026.
In comparison to the previous VAT reduction that applied until 30 June 2025, Resolution 204/2025/QH15 includes some adjustments to the scope of the extended 2% VAT reduction. Notably, the sectors now eligible for the reduced rate include transportation services, logistics, and information technology goods and services. However, certain sectors that were originally VAT-exempt have been excluded from this reduction, specifically education, vocational training, medical services, finance, banking, securities, and insurance. Additionally, sectors such as telecommunications and real estate, which have seen recent growth, are also not eligible for the VAT reduction.
The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.
