Question:
Dear InvestConsult Saigon Legal,
Our enterprise has been operating in the field of producing dyes and pigments under industry code 20 and applying a VAT rate of 10%. Does this chemical item get a VAT reduction of 8% according to the new regulations?
Answer:
Pursuant to Decision 43/2018/QĐ-TTg dated 1/11/2018 of the Prime Minister promulgating the Vietnamese product industry system ragulating industry code 20 – Chemicals and chemical products with industry code details 2011 – Basic Chemicals.
Persuant to Clause 1, Article 1 and the Annexes to the List of goods and services not entitled to VAT reduction promulgated together with Decree 15/2022/NĐ-CP: “Basic chemicals ”that are not part of the excluded goods are not entitled to VAT reduction and are not specified in the Annexes promulgated together with Decree 15/2022/NĐ-CP.
According Official Letter 2252/TCT-CS issued by the General Department of Taxation on 27/6/2022. In case the enterprise producing, trading in “Basic chemicals” and applying a VAT rate of 10% shall be entitled to VAT reduction as prescribed in Decree 15/2022/NĐ-CP.
Thus, basic chemicals belonging to the group of goods are entitled to a VAT reduction from 10% to 8% according to Decree 15/2022/NĐ-CP.