Mazars Vietnam Newsletter - Issue August 2019
We would like to bring you tax and legal updates in August 2019 with the following highlights influencing the corporate operations:
Official Letter 2875/TCT-DNNCN on Personal Income Tax (“PIT”) on rewards (under form of a travel tour) given upon sale target achievement
According to Official Letter 2875/TCT-DNNCN issued by the General Department of Taxation on 22 July 2019, if an individual customer is rewarded with a travel tour (not given in cash) when achieving an agreed sales target, this is regarded as income from gifts which are not obliged to be registered for ownership, thus, is not subject to PIT.
Official Letter 2461/CT-TTHT on PIT on apartment rental
According to Official Letter 2461/CT-TTHT issued by Ho Chi Minh City Tax Department on 21 March 2019, if a Representative Office (“RO”) signs an annual apartment rental contract to serve as the accommodation for expatriates coming to work in Vietnam, the rental fee, electricity and water bill shall be taxable income of those individuals. Accordingly, the rent amount would be allocated to each individual based on the actual number of days the person stays at the apartment.
Official Letter 2754/CT-TTHT on tax policies for bonuses paid to business individuals
On 25 March 2019, Ho Chi Minh City Tax Department issued Official Letter 2754/CT-TTHT, guiding the tax treatment for enterprises having policies to support customers who meet sales targets. Accordingly, if the support is given as a percentage of sales, the enterprise is required to issue invoices at the reduced price (similar to the treatment for trade discounts). On the other hand, if the support is given through the distributor via offset payment, the enterprise is required to withhold and pay PIT at the rate of 1%.
Official Letter 50769/CT-TTHT on CIT incentives of the Investment Registration Certificate’s (“IRC”) extension period
According to Official Letter 50769/CT-TTHT issued by Hanoi Tax Department on 28 June 2019, the incentive is only granted for the period which was registered under the first IRC. The enterprise shall not be eligible to enjoy in the CIT incentive for the extension period.
Official Letter 12973/CT-TTHT guiding the storage of electronic invoices ("e-invoice")
According to Official Letter 12973/CT-TTHT issued by Binh Duong Department of Taxation on 25 July, 2019, the selling enterprises must store e-invoices for a period of 10 years and in both the file extensions of PDF and XML. In particular, the XML format contains the entire data of the invoice and is legally valid if not modified after being issued. The PDF format is only a demonstration of the XML version, with no legal validity.
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.
Download the issue in the PDF extension in English and Vietnamese as below.
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The dialogue format is potentially kept to be very interactive so that it is not a one-way presentation but an opportunity for the participants to share their questions or comments with us on tax, transfer pricing, licensing, labour, insurance and other related issues.