Value Added Tax (VAT) Reduction for Embroidery Machines

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On April 16, 2024, the General Department of Customs issued Circular No. 1603/TCHQ-TXNK providing guidance on VAT reduction for embroidery machines as per Decree No. 94/2023/NĐ-CP dated December 28, 2023.
In accordance with Article 1(1) of Decree No. 94/2023/NĐ-CP, the VAT reduction policy applies to commodity groups subject to a tax rate of 10% (reduced to 8%), excluding certain commodity groups such as telecommunications, information technology, metals, precast metal products, mineral products (excluding coal mining), coke, refined petroleum products, chemical products; and goods subject to special consumption tax. The specific items not eligible for VAT reduction are detailed in Appendices I, II, and III issued together with Decree No. 94/2023/NĐ-CP. The HS codes listed in column (10) of Appendix I, column (10) of Section A, and column (4) of Section B of Appendix III are for reference purposes only. The determination of HS codes for imported goods shall be in accordance with the classification of goods under the Customs Law and relevant legal documents guiding the implementation of the Customs Law.
In cases where goods do not fall under the categories ineligible for VAT reduction, the VAT rate of 8% shall apply.


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