Q&A: Invoice preparation and revenue declaration when applying the VAT reduction under Resolution 204/2025/QH15 for direct-method taxpayers
RegHub explainer by New MarketerLast updated:
Based on:Nghị định số 174/2025/NĐ-CP ngày 30/6/2025; Nghị quyết số 204/2025/QH15 - Ministry of Finance
This explanation was generated by AI and checked by an automated AI review, not by a human expert. It is not legal, tax or accounting advice and may contain errors. Check the official document before you rely on it.
Son La Tax Department No. 1 clarifies: under Decree 174/2025/ND-CP, a direct-method VAT taxpayer must, when issuing invoices for VAT-reduced goods/services, record the full pre-reduction value in the 'Total amount' column, record the amount after the 20% rate reduction in the 'Total goods/services' line, and note the reduction basis under Resolution 204/2025/QH15. Even where the contract explicitly states the post-reduction price, the invoice must still follow Decree 174/2025/ND-CP's format. The revenue base for VAT calculation is the pre-reduction revenue (must be grossed up), not the post-reduction contract value.
Background
A direct-method VAT taxpayer has signed a contract with an investor, explicitly stating the contract value as the post-reduction amount under Resolution 204/2025/QH15. The taxpayer asks:
- Can the invoice record the post-reduction value directly in the 'Total amount' column without noting the reduction?
- Is the declared revenue the post-reduction contract value or must it be grossed up to the pre-reduction amount?
Response from Son La Tax Department No. 1
On invoice preparation
Under Article 1(3)(b) of Decree 174/2025/ND-CP dated 30 June 2025:
- 'Total amount' column: must record the full pre-reduction value.
- 'Total goods/services' line: records the amount after the 20% rate reduction.
- Must include a note stating the reduction basis under Resolution 204/2025/QH15.
Even where the contract states only the post-reduction price, the invoice must still comply with these requirements. Omitting the pre-reduction value and the note is not permitted.
On declared revenue for tax calculation
The revenue base for VAT declaration and calculation is the pre-reduction revenue (the post-reduction contract value must be grossed up), not the post-reduction contract value.
Applicable Regulations
- Decree 174/2025/ND-CP dated 30 June 2025.
- Resolution 204/2025/QH15 (VAT reduction).