Mazars Vietnam Newsletter - Issue October 2019

Operational Updates

OFFICIAL LETTER 7159/CT-TTHT THE ISSUANCE OF VAT INVOICES FOR GIFTS

On 08 July 2019, HCMC Tax Department issued Official letter 7159/CT-TTHT providing guidance in case enterprises purchase goods which are used as gifts for customers with only sales invoice. Accordingly, when providing such gifts to customers, enterprises shall have to issue VAT invoices. Taxable prices and applicable tax rates are the taxable prices and applicable tax rates of the same kinds or equivalent goods at the time such goods are used. 

Official letter 2523/GSQL-GQ2 on submitting finalization report by subsidiaries of export-processing enterprises ("EPEs") 

According to Official letter 2523/GSQL-GQ2 issued by General Department of Customs (“GDC”) on 16 August 2019, subsidiaries of EPEs shall have to prepare and submit the finalization report as per regulations if they are allowed to carry out the import - export activities under their own names and give a notification of their manufacturing entities.

Official letter 3441/TCT-CS on treatment of incorrect e-invoices

On 29 August 2019, GDT issued Official letter 3441/TCT-CS guiding the treatment of incorrect e-invoices. Accordingly, the invoices shall be destroyed and replaced by new ones if errors are detected before sending to the buyers. In case the incorrect invoices have already been sent to customers, the seller shall have to issue corrective invoices. 

Official letters 7022/CT-TTHT, 8908/CT-TTHT and 8964/CT-TTHT on electronic invoice ("e-invoice") for freight forwarding and transportation services

HCMC Tax Department issued Official letter 7022/CT-TTHT dated 08 July 2019, Official letter 8908/CT-TTHT and Official letter 8964/CT-TTHT dated 20 August 2019 providing guidance on e-invoices for freight forwarding and transportation services. Accordingly, service providers shall issue e-invoices including the name of services and attach to them a detailed list of transported goods.

Official letter 3612/TCT-DNNCN on the determination of assets’ value in case of conversion from business households to enterprises

On 12 September 2019, General Department of Taxation ("GDT") issued Official letter 3612/TCT-DNNCN providing guidance on the determination of assets’ value in case of conversion from business households to enterprises. Accordingly, if the assets are supported by sufficient and valid invoices and supporting documents, the assets’ value shall be based on such documents. In case of not having sufficient supporting documents, these assets must be revalued by a valuation organization. 

Official letter 3352-TCT/KK on bank payment vouchers for exported goods and services

On 22 August 2018, GDT issued Official letter 3352-TCT/KK providing guidance in case Vietnamese enterprises receive payment from foreign customers under a letter of credit for the exported goods and services. Accordingly, if the bank evident does not show the bank account of either the buyer or an authorized third party as specified on the export contract, such exported goods and services shall not be eligible for VAT credit and refund.

PERSONAL INCOME TAX UPDATES

Official letter 9581/CT-TTHT on the application of personal income tax ("PIT") on overtime pay on holidays

According to Official letter 9581/CT-TTHT issued by HCMC Tax Department on 30 August 2019, in case employees work overtime on holidays and receive extra payment for OT and regular payment for paid holidays as per regulations, the total payment (including the overtime premium paid at the rate of 300% and paid salary for such day as regulated in the Labor Code) in excess of the regular payment shall be exempted from PIT obligation.

“BEYOND THE GAAP” NEWSLETTER

BEYOND THE GAAP NO. 136 - SEPTEMBER 2019

September saw the publication of two long-awaited decisions by the IFRS Interpretations Committee (IFRS
IC). One related to the determination of the lessee’s incremental borrowing rate when applying IFRS 16, and the other to the classification and presentation of liabilities or assets related to uncertain tax positions. This, therefore, seemed the ideal time to present our study of information on the impacts of initial application of IFRIC 23 presented by a sample of French and European issuers (CAC 40 and Euro Stoxx 50) in their IFRS interim financial statements to 30 June 2019.

Download full document here

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We do trust the above points are notable and sufficient, but should you have any question or need a deeper discussion on this issue, please do not hesitate to contact us.

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