Mr. Trieu asked, are the company's products subject to tax reduction under Decree No. 174/2025/ND-CP?

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

Pursuant to Article 9 of the Law on Value Added Tax No. 48/2024/QH15 on tax rates:

"… 3. The tax rate of 10% applies to goods and services not specified in Clause 1 and Clause 2 of this Article, including services provided by foreign suppliers without a permanent establishment in Vietnam to organizations and individuals in Vietnam through e-commerce channels and digital platforms…".

Pursuant to Article 1 of Decree No. 174/2025/ND-CP dated June 30, 2025 of the Government stipulating the policy of reducing value added tax according to Resolution No. 204/2025/QH15 dated June 17, 2025 of the National Assembly:

"Article 1. Value added tax reduction

1. Value added tax reduction for groups of goods and services currently subject to 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 1 issued with this Decree.

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

… 2. Value added tax reduction level:

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

Pursuant to Appendix I, II, issued with Decree No. 174/2025/ND-CP;

Based on the above regulations, in the case of "a company manufacturing metal products such as: ship propellers, copper pillars used for stone crushers. The process includes melting metal and pouring it into molds to create shape" if it is subject to the 10% value added tax rate and is subject to Appendix I, II issued with Decree No. 174/2025/ND-CP dated June 30, 2025 of the Government, it is not subject to VAT reduction.

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