VAT Vietnam: The reduction according to Decree No. 15/2022/ND-CP has ended

Decree No. 15/2022/ND-CP (Decree 15), which last year reduced the VAT rate from 10% down to 8% for certain goods and services in Vietnam, expired on 31 December 2022. This means that, from 1 January 2023, the VAT has returned to a rate of 10%.

Below is specific guidance from the local tax authorities for reference:

a) Adjusting invoices for goods and services provided and invoiced before 31 December 2022

According to the official letter No. 6778/CTHN-TTHT of the Hanoi City Tax Department, at the end of 2022, if a company corrects the output invoices issued for goods or services eligible for VAT reduction in 2022, the adjusting invoice will apply a VAT rate of 8%.

b) Return invoice for goods purchased from February 2022 to December 2022

The official letter no. 313/CTTPHCM-TTHT of Ho Chi Minh City mentions that if goods which were subject to 8% VAT application under Decree 15 are returned, the company will issue the return invoice at the rate of 8%.

c) The service was provided and completed in 2022 but invoiced in 2023

Many local tax authorities hold the point of view that the effective term of Decree 15 ended on 31 December 2022, so all goods and services which were subject to the reduced VAT rate will apply a 10% VAT rate from January 2023, including those which were performed in 2022 but invoiced in 2023.

Furthermore, penalties for invoicing at the incorrect time may be imposed. Official letters related to this matter include the official letter No. 20935/CTBDU-TTHT of Binh Duong Province Tax Department, 2619/CTHN-TTHT of Hanoi City Tax Department, and 4063/CTBDI-TTHT of Binh Dinh Province Tax Department.

Regarding VAT compliance matters, especially for VAT reduction application, please reach out to ECOVIS AFA Vietnam for a professional consultation.