Mazars Vietnam Tax and Legal Updates - August 2016

We are pleased to attach our Vietnam Legal and Tax Update for August 2016. In this edition, we highlight the following breaking news:

Guideline on application of CIT rate 17% from 01 January 2016

According to these OLs, not all the enterprises that are enjoy the preferential CIT rate 20% shall automatically apply the preferential CIT rate 17% from 01 January 2016. Only enterprise having investment project in the areas with difficult socio-economic conditions as specified in the Appendix of Decree 218/2013/ND-CP (“Decree 218”) or enterprise invested in industries specified in Point b, Clause 3, Article 15 of Decree 218 shall eligible to apply the preferential CIT rate 17%. Other enterprises that do not meet the conditions as noted above shall continuously apply the CIT rate of 20% from 01 January 2016.

Decree 39/2016/ND-CP detailing the implementation of some articles of the Law on Occupational Safety and Sanitation

The company must arrange a certain minimum number of employees or establish Occupational Safety and Sanitation Department to take care of occupational safety and sanitation activities; must have in place a minimum number of people working in health care (or alternatively sign a contract with a qualified healthcare facility). The company must submit reports on labour accidents situation every 6 months before 05 July of the year and before 10 January of the following year; the company must create and keep records of occupational accident as specified in this Decree upon occurrence of the incidents.

This Decree takes effect from 01 July 2016 and replaces a number of articles of Decree 45/2013/ND-CP dated 05 October 2013.

Several guidelines on Corporate Income Tax

  • Selling expenses for secondary distribution agents
  • OL 1564/TCT-DNL on recognition of trade union fee for 2013-2014 but paid in 2015
  • OL 3367/CT-TTHT guiding on welfare expense
  • OL 2079/TCT-CS on interest-free loan between enterprises and individuals
  • OL 2745/CT-TTHT and OL 2543/2016/TCT-KK on expense which is paid by credit card 
  • OL 2592/CT-TTHT on CIT and PIT treatment for the expenses of applying for work permit and resident of the foreign employees
  • OL 2337/CT-CS on deductibility of PIT consulting services for foreign employee

Several guidelines on Value Added Tax

  • OL 1841/TCT-CS on applicable VAT rate for the testing service on quantity and quality of the export goods which are outsourced to a third party service provider
  • OL 2895/CT-TTHT on supporting document when receiving support payment for the employee’s remuneration

Several guidelines on Personal Income Tax

  • OL 2076/TCT-CNTT on the utilization of the new software for registration of employee’s tax code
  • OL 2575/TCT-TNCN on PIT of business individual
  • OL 1657/TCT-TNCN on tax refund to foreign individual who change status from tax resident to non-tax resident.

Guidelines on compulsory insurance

OL 1814/BHXH-ST issued by Vietnam Social Insurance on 24 May 2016, guiding on returning of Health Insurance (“HI”) card for the employee who stopped contributing of HI however did not return the unexpired HI card.

Download the full guide as below.

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