VAT Reduction on Accepted Aluminum-Glass Construction and Installation Work by a Subcontractor
A subcontractor performing aluminum-glass work (supplying, installing and finishing aluminum-glass doors and curtain walls) asked what VAT rate applies when accepting and billing completed work, given that its input materials carry 8% or 10% VAT. Can Tho Tax Sub-department No. 3 answered by citing the rules and did not state a specific rate. For construction and installation, the VAT point and the invoice issuance point is when the project, work item or completed volume is accepted and handed over, whether or not payment has been received. Decree 174/2025/ND-CP reduces VAT for goods and services currently taxed at 10% (except excluded groups), effective from 1 July 2025 to 31 December 2026. The tax office's conclusion: construction and installation work whose acceptance/handover of completed volume falls between 1 July 2025 and 31 December 2026 qualifies for the VAT reduction under Decree 174/2025/ND-CP. The company should check this against its actual circumstances.
RegHub explainer by New MarketerLast updated:
Based on:174/2025/NĐ-CP - Ministry of FinanceEffective:
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.
Question
The company is a subcontractor specializing in aluminum-glass work for general contractors. Its contracts cover supplying, installing and finishing each type of aluminum-glass door and curtain wall component, each with its own unit price (covering supply, installation and finishing). Input materials: aluminum profiles (10%), metal fittings (10%), laminated and tempered glass (8%), other auxiliary materials (8% or 10% depending on item). It asks what VAT rate applies when accepting and billing completed work.
Official answer
Can Tho Tax Sub-department No. 3 cited the following:
- Clause 6, Article 16, Decree 181/2025/ND-CP: for construction and installation, the VAT point is when the project, work item or completed volume is accepted and handed over, whether or not payment has been received.
- Point c, Clause 4, Article 9, Decree 254/2026/ND-CP: the invoice issuance point for construction and installation is the acceptance/handover time, regardless of payment.
- Clauses 1 and 2, Article 1, Decree 174/2025/ND-CP: VAT reduction for goods and services currently taxed at 10%, except telecoms, finance, banking, securities, insurance, real estate, metal products, mining products (excluding coal) (Appendix I) and goods/services subject to special consumption tax (except petrol) (Appendix II). Credit-method taxpayers apply 8%; business households and individuals using the percentage-of-revenue method get a 20% reduction in the rate. Non-taxable goods/services or those taxed at 5% are not eligible.
- Clause 1, Article 2, Decree 174/2025/ND-CP: effective from 1 July 2025 to 31 December 2026.
Conclusion
Construction and installation work whose acceptance/handover of completed volume occurs between 1 July 2025 and 31 December 2026 qualifies for the VAT reduction under Decree 174/2025/ND-CP. The tax office does not state a specific rate for each of the company's work items and asks the company to review the rules and check them against its actual circumstances.