Reduce value added tax on groups of goods and services currently subject to a tax rate of 10%

Reduce value added tax on groups of goods and services currently subject to a tax rate of 10%

The Decree clearly states that value added tax will be reduced 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, metals and prefabricated metal products, mining products (excluding coal mining), coke, refined petroleum, chemical products. Details are in Appendix I issued with this Decree.

b- Goods and services subject to special consumption tax. Details are in Appendix II issued with this Decree.

c- Information technology according to the law on information technology. Details in Appendix III issued with this Decree.

d- Value added tax reduction for each type of goods and services is applied uniformly at the stages of import, production, processing, and commercial business. For coal products sold (including coal mined and then screened and classified according to a closed process before being sold) are subject to value added tax reduction. Coal products listed in Appendix I issued with this Decree, at stages other than mining and selling, are not subject to value added tax reduction.

Corporations and economic groups that implement a closed process to sell are also subject to value-added tax reduction on coal products sold.

In case the goods and services listed in Appendices I, II and III 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 reduction shall be allowed.

Value Added Tax Reduction

Regarding the reduction in value added tax , the Decree clearly states that business establishments calculating value added tax according to the deduction method are entitled to apply a value added tax rate of 8% to the goods and services specified above.

Business establishments (including business households and individual businesses) calculating value added tax according to the percentage method on revenue are entitled to a 20% reduction in the percentage rate for calculating value added tax when issuing invoices for goods and services eligible for value added tax reduction as prescribed above.