Vietnam updated Decree No. 15/2022/ND-CP on the Enterprise Law on December 12, 2022, and in order to support Vietnam's post-pandemic recovery in 2022, the reduced VAT rate needs to return to normal in 2023, as follows:

According to paragraph 1 of Article 3 of Decree no. 15/2022/ND-CP, the reduced VAT rate policy is adopted until December 31, 2022. Therefore, after December 31, 2022, industries that have been subject to reduced VAT rates will return to the normal 10% VAT rate.

According to paragraph 4 of Article 1 of Decree-Law 15/2022/ND-CP, enterprises are required to issue separate invoices for products and services for which the VAT rate has been reduced.

Therefore, products and services that receive an 8% reduction in VAT rates in 2022 must be invoiced separately. However, from the date of invoicing until December 31, 2022 (8% VAT rate applies) and from 1 January 2023 onwards, it is required to separate and the tax rate is 10%.

Example: Company A signed a service contract between June 1, 2022 and May 31, 2023 (subject to 10% VAT). If the service does not fall under Appendices I, II, III and is accompanied by Decree 15/2022/ND-CP, it is subject to a reduction in the VAT rate until 31 December 2022. However, Company A invoices for services on the same invoice between June 1, 2022 and May 31, 2023, but needs to split the revenue for specific services, as follows:
-VAT rate of 8% from 1 June 2022 to 31 December 2022
- VAT rate is 10% from 1 January 2023 to 31 May 2023.
Furthermore. Company A can also issue separate invoices for service income according to the above tax rate.

KAIZEN Group is equipped with experienced and highly qualified professional consultants and is therefore well positioned to provide professional advices and services in respect of the formation and registration of company, application for various business licences and permits, company compliance, tax planning, audit and accounting in China. Please call and talk to our professional consultants for details.