Mazars’ Vietnam editorial team is proud to present its monthly newsletter for July 2017.The issue covers tax and legal updates including strategic, operational and payroll changes in regulations relevant to Corporate Income Tax ("CIT"), Value Added Tax ("VAT"), License fee, Foreign Contractor Tax ("FCT"), electronic invoice and Personal Income Tax ("PIT") as well as updates on International financial standards.

Strategic Updates 

Official Letter No. 31068/CT-TTHT onCorporate Income Tax (“CIT”) incentives

According to Official Letter No. 31068/CT-TTHT issued by Hanoi Tax Department (“HTD”) dated 16 May 2017, in case a company which enjoys CIT incentives granted for high-tech company and outsources processing activities to other company, if the processing are partly outsourced and then completed by the company, the sale of these products is still entitled to CIT incentives as prescribed. If the processing is fully outsourced to other company, the sale of such products is not entitled to CIT incentives.

Operational Updates 

Official Letter No.2663/CT-TTHTon the use of electronic invoices as supporting documents for goods in transit

According to Official Letter No. 2663/CT-TTHT issued by Ho Chi Minh Tax Department (“HCMTD”) dated 28 March 2017, if a company needs invoices as supporting documents for goods in transit, the company may use converted electronic invoices or present electronic invoices in electronic devices such as laptop, tablet or mobile phone. If the company has developed a system to control electronic invoice, account of the converter and conversion time in which the conversion of each electronic invoice to paper invoice could only be carried out once, the legal representative’s signature and the Company’s seal on converted invoice are not required.

Official Letter No. 3913/CT-TTHT on VAT for brokerage service of looking for suppliers in Vietnam

Official Letter No. 3913/CT-TTHT issued by HCMTD dated 28 April 2017 provides guidance on a case where a Vietnamese company enters into a contract with a foreign company to support in sourcing the local supply which shall then be exported to the foreign company, as well as monitor the status of the exported goods, accordingly, such services are determined as consumed in Vietnam, not exported service, hence VAT rate of 10% is applied.

Official Letter No. 1886/TCT-CS on VAT forconstruction and installation activity for processing company

According to Official Letter No. 1886/TCT-CS issued by General Department of Taxation (“GDT”) dated 10 May 2017, in case a company or a foreign contractor applying VAT credit method provides construction and installation services to Export Processing Enterprises, such activities are subject to VAT rate of 0% if other conditions of contracts, non-cash payment and invoices are satisfied.

Official Letter No. 1961/TCT-CSon License fee for a branch of a company

According to Official Letter No. 1961/TCT-CS issued by GDT on 15 May 2017, if a company’s branch carries out business activities (regardless of whether it is independent or dependent branch), the branch shall be subject to license fee declaration and payment. If the branch does not carry out business activities, it shall not be subject to license fee.

Official Letter No. 2303/TCT-CSon Foreign Contractor Tax (“FCT”)

Official Letter No. 2303/TCT-CS issued by GDT on 01 June 2017 provides FCT guidance for the goods traded between two foreign companies then stored in a bonded warehouse in Vietnam. If goods are subsequently sold to a foreign customer, the transfer of ownership is carried out on board or at the foreign customer's warehouse under the Incoterms of FOB or DDP (not in the bonded warehouse in Vietnam), the foreign seller shall not subject to FCT.


Payroll Updates

Official Letter No. 2564/TCT-TNCN on Personal Income Tax (“PIT”) for travel allowance from home to work

According to Official Letter No. 2564/TCT-TNCN issued by GDT on 13 June 2017, if employees of a Representative Office (“RO”) of foreign business organisation in Vietnam receive fixed travel allowances paid by overseas parent company for transportation from their home to the working place according to policy of the foreign organisation and RO, such benefit shall not be included in the employees’ taxable income.


No. 112. June 2017 saw the publication of IFRIC 23 – Uncertainty over Income Tax Treatments. According to this Interpretation, entities must now assume that any uncertainty over income tax treatments will be examined by the taxation authorities, and must consider the probable outcome of such examination when determining the amount of income tax to be recognised in the financial statements.

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Mazars Newsletter - July 2017 [VIE]
Mazars Newsletter - July 2017 [VIE]
Mazars Newsletter - July 2017 [ENG]
Mazars Newsletter - July 2017 [ENG]