Mazars Vietnam Newsletter - Issue November 2019
We would like to bring you tax and legal updates in November 2019 with the following highlights influencing the corporate operations:
Official letter 4490/TCT-KK on Value Added Tax ("VAT") refund for exported goods and services
On 04 November 2019, General Department of Taxation ("GDT") issued Official letter 4490/TCT-KK guiding the refund of VAT on exported goods and services. Accordingly, if the company has claimed for a VAT refund of a smaller amount than it is entitled to in the last period, the difference shall be transferred forward for a refund in the present period. Provided that such difference has been prorated on the exported revenue per the prevailing regulations in the last period, it shall not be prorated again in the present period.
Official letter 6098/TCHQ-TXNK on import duty on machine and equipment borrowed from Export Processing Enterprises ("EPEs")
According to Official letter 6098/TCHQ-TXNK issued by General Department of Customs ("GDC") on 24 September 2019, when machines and equipment are lent by an EPE to a local enterprise, such goods shall be subject to temporary import procedures and import duty. Part of such import duty shall be refunded when the machines and equipment are re-exported abroad or to non-tariff areas based on their residual value after use in Vietnam. Assets with no residual value shall not be eligible for any tax refund.
Official letter 72267/CT-THT on declaration and payment of foreign contractor tax ("FCT") on Cash-on-delivery services
According to Official letter 72267/CT-THT issued by Hanoi Tax Department on 16 September 2019, in case a Vietnamese company, as an authorised agent, carries out part of the delivery services and collects payments on behalf of the foreign company, the Vietnamese company shall be responsible for FCT withholding, tax declaration and payment on behalf of the foreign company, if the foreign company does not meet requirements to apply the declaration method in Vietnam.
Official letter 2080/CT-TTHT on CIT incentives for expansion projects
On 20 September 2019, Bac Ninh Department of Taxation issued Official letter 2080/CT-TTHT providing guidance on CIT incentives for expansion projects. Accordingly, for the expansion projects to enjoy the same incentives as new investment projects located in the same area, the company must register the increase of total investment capital with local licensing authority.
Official letter 3962/TCT-CS on time of issuance of e-invoice for services provision
According to Official letter 3962/TCT-CS issued by GDT on 01 October 2019, issuance date of e-invoice for services provision as regulated by Decree 119/2018/ND-CP is whether at the date of services completion or the agreed date in a contract between the buyer and the seller, irrespective of whether the payment for such services has been made or not.
PERSONAL INCOME TAX UPDATES
Official letter 4400/TCT-DNNCN on Personal Income Tax ("PIT") on holiday trips given to employees
On 29/10/2019, GDT issued Official letter 4400/TCT-DNNCN providing guidance on PIT on payment made by the company to cover traveling expenses for holiday trips – training – market research for its employees. Accordingly, if the beneficiary’s name is clearly mentioned in payment voucher or payment is made directly to the employee, such benefits shall be treated as employment income and therefore, subject to PIT.
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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Mazars Monthly Tax Dialogues
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.