Mr. Nguyen Duong's company (HCMC) purchased the product "Metal transmission shaft" from supplier A. Supplier A informed that this product is imported with a tax rate of 10%, so it must be sold to Mr. Duong's company with a tax rate of 10%.

Mr. Duong checked the information of this product in Decision No. 43/2018/QD-TTg and the product code is 2814022 - Transmission shaft (including camshaft and crankshaft) and connecting rod (not included in Appendix I, II of Decree No. 174/2025/ND-CP, so only a tax rate of 8%) is applied.

Mr. Duong asked why his company had to pay a tax rate of 10% but was not fully deducted? He requested the tax authority to have unified guidance in this case to ensure the rights of buyers.

Regarding this issue, Ho Chi Minh City Tax Department 2 has the following opinion:

Pursuant to Clause 2, Article 42 of the Law on Tax Administration No. 38/2019/QH14 dated June 13, 2019, which stipulates the principles of tax declaration and calculation:

"2. Taxpayers shall calculate the amount of tax payable themselves, except in cases where the tax calculation is carried out by the tax authority in accordance with the Government's regulations".

Pursuant to the Law on Value Added Tax No. 48/2024/QH15 dated November 26, 2024 of the National Assembly;

Pursuant to Resolution No. 204/2025/QH15 dated June 17, 2025 of the National Assembly on value added tax reduction;

Pursuant to Decree No. 174/2025/ND-CP dated June 30, 2025 of the Government stipulating the policy of reducing value added tax under Resolution No. 204/2025/QH15:

Article 1 stipulates on reducing value added tax:

"1. Reducing value added tax on groups of goods and services currently applying a tax rate of 10%, except for the following groups of goods and services:

a) Telecommunications, financial activities, banking, securities, insurance, real estate business, metal products, mining products (except coal). Details in Appendix I issued with this Decree.

b) Goods and services subject to special consumption tax (except gasoline). Details in Appendix II issued with this Decree.

c) The reduction of value added tax for each type of goods and services specified in Clause 1 of this Article is applied uniformly at the stages of import, production, and processing. public, commercial business.

In case the goods and services listed in Appendices I and II issued with this Decree are not subject to value added tax or are subject to 5% value added tax according to the provisions of the Law on Value Added Tax, the provisions of the Law on Value Added Tax shall apply and no value added tax shall be reduced.

2. Value added tax reduction rate

a) Business establishments calculating value added tax by the deduction method shall apply a value added tax rate of 8% to goods and services specified in Clause 1 of this Article

b) Business establishments (including business households and business individuals) calculating value added tax by the percentage method on revenue shall have the percentage rate reduced by 20% to calculate value added tax when issuing invoices for goods and services eligible for value added tax reduction specified in Clause 1 of this Article.

Article 2 stipulates the effective date and organization of implementation:

"1. This Decree takes effect from July 1, 2025 to December 31, 2026...";

Pursuant to Decision No. 43/2018/QD-TTg dated November 1, 2018 of the Prime Minister on promulgating the Vietnamese product industry system;

Based on the above regulations, because you did not specify the specific company, Ho Chi Minh City Tax Department 2 answers according to the following principles:

In case a company calculates value added tax according to the deduction method and sells goods and provides services that are applying a value added tax rate of 10%, the value added tax rate of 8% shall be applied to these goods and services from July 1, 2025 to December 31, 2026, except for the group of goods and services specified in detail in Appendix I, II issued together with Decree No. 174/2025/ND-CP dated June 30, 2025 of the Government.

Please refer to Decision No. 43/2018/QD-TTg dated November 1, 2018 of the Prime Minister and Appendix I, II issued with Decree No. 174/2025/ND-CP to determine goods and services eligible for VAT reduction, non-eligible for VAT reduction according to the provisions of the above Decree (effective from July 1, 2025 to December 31, 2026).

The Ho Chi Minh City Tax Department 2 informs you and requests you to base on the actual situation, compare with the provisions of the law to comply with the regulations.