With Vietnam's ongoing efforts to advance and modernize its economy, the government has implemented fresh tax policies aimed at fostering economic growth, boosting revenue, and establishing an equitable taxation system. In this guide, we will provide you with all the necessary information and updates on the upcoming changes in the tax regime. Let’s get started!
1. Value-added Tax rate reduces 2% till the end of June 30, 2024
On November 29, 2023, the National Assembly decided to continue applying the 2% VAT reduction for an additional six months, from January 1, 2024 to the end of June 30, 2024.
According to Article 3 of Resolution No. 43/2022/QH15, the group of goods and services will be subject to a 2% reduction, except for those fall into the following groups:
Telecommunications and information technology
Financial, banking, securities and insurance activities
Real estate business
Metals and prefabricated metal products
Mining products (excluding coal mining), coke, refined petroleum, and chemical products
Goods and services subject to special consumption tax.
Subjects eligible for VAT reduction under this newResolution will comply with Point a, Section 1.1, Clause 1, Article 3 of Resolution No. 43/2022/QH15.
2. Circular No. 13/2023/TT-BTC offers guidelines for Value-added Tax practices
The adjustment of VAT, late payment interest, and fines (if any) is done according to Article 3, Circular No. 13/2023/TT-BTC.
“If a tax agency has issued decision to reclaim VAT refunds, impose late payment interest and fines for administrative tax offences, such tax agency shall issue a decision on adjustment according to Form No. 38 attached to Government’s Decree No. 118/2021/ND-CP dated December 23, 2021.
If the business establishment has additionally declared the reclaimed VAT refund, such business establishment and tax agency shall adjust the reclaimed VAT refund and late payment interest according to Form No. 02/KTT attached to Circular No.80/2021/TT-BTC dated September, 29 2021 of the Ministry of Finance to.”
3. Vietnam will impose Global minimum tax from January 1, 2024
Vietnam has decided to implement a Global minimum tax starting on January 1, 2024. In detail, companies with a total consolidated revenue of 750 million euros or more in 2 out of the 4 most recent years will be subject to a 15% tax rate.
Qualified domestic minimum top-up tax = (Top-up tax percentage x Excess profit) + Additional current top-up tax (if any).
In which: Top-up tax percentage = Minimum rate - Effective tax rate
Any investors who are eligible for taxation will be required to pay the minimum tax in Vietnam. However, this tax does not apply to Government organizations, International organizations, non-profit organizations, retirement funds, or real estate investment organizations that are the ultimate parent company.
