Mazars Vietnam Newsletter - Issue May 2018

We would like to bring you tax and legal updates in May 2018 with the following highlights influencing the corporate strategy and operation.


Support measures for small and medium enterprises

After the Law on Providing Assistance to Small and Medium Enterprises takes effect from 01 January 2018, the Government has officially promulgated two Decrees guiding detailed assistances for small and medium enterprises (“SMEs”), including Decree 38/2018/ND-CP and 39/2018/ND-CP. Both Decrees come into force from 11 March 2018 and cover some notable points as follows:

  • Supplement criteria to determine the micro enterprises and SMEs in the sector of agriculture, forestry, aquaculture; industry, construction; and trading, service.
  • Supplement more detailed guidelines for assistances stipulated in the Law on Providing Assistance to SMEs such as credit assistance; assistance for information access, consulting and legal assistance; assistance in human resources development, etc.
  • Supplement guidance in relation to venture capital funds for startups:
    • Allow the investors to establish venture capital fund (previously, venture capital funds must be established at large scale and strictly managed under Law on Securities). Simultaneously, enterprise can also use science and technology development fund to invest in startups.
    • A fund has maximum 30 members, is allowed to set up its operation charter but not allowed to use borrowings as contribution capital in the fund.
    • The investors can set up or hire a company to manage the fund.
    • The fund must not account for more than 50% of the charter capital of the invested enterprise.

Despite its spirit of the Government to support SMEs, whether this plan will benefit SMEs depends largely on the actual implementation, considering the fact that some supports are still provided on an ad hoc basis. Complicated administrative requirements in terms of accounting and tax for SMEs are still awaiting further amendments of corresponding Laws.



Official letter 1063/TCT-KK on allocation of the creditable input Value Added Tax (“VAT”) and the overpaid Corporate Income Tax (“CIT”) when splitting enterprise

On 17 January 2018, General Department of Taxation issued Official Letter (“OL”) 282/TCT-CS on allocation of the creditable input Value Added Tax (“VAT”) and the overpaid Corporate Income Tax (“CIT”) upon enterprise split:

  • The creditable input VAT shall be allocated based on ratio of the assets transferred to the split company and the splitting company.
  • The overpaid CIT shall be allocated based on the agreed resolution.


OL 1167/TCT-CS on supporting documents for transfer of fixed assets which are imported and delivered directly to dependent branch

On 05 April 2018, General Department of Taxation issued Official Letter 1167/TCT-CS providing guidelines on supporting documents for transfer of fixed assets. If a company is responsible for concluding economic contract and customs declaration of the imported assets and then transport them directly to its dependent branch, such transaction is not considered as internal transfer between the company and the branch. The company must issue VAT invoice to the branch for VAT declaration purposes.


OL 3761/BTC-CST on VAT of the goods which are imported then re-exported to the original foreign supplier

According to the OL 3761/BTC-CST issued by the Ministry of Finance on 02 April 2018, in case a company must re-export the imported goods to original foreign supplier due to change of market demand in the period from 01 July 2016 to 01 February 2018, VAT of the imported goods shall not be refundable as stipulated under Circular 130/2016/TT-BTC. The Company is only allowed to credit this as its input VAT.


OL 14675/CT-TTHT on Special Sale Tax (“SST”) imposed by customs authority at import stage

According to the OL 14675/CT-TTHT issued by Hanoi Tax Department on 04 April 2018, if a company is imposed additional SST (which is not classified as tax evasion or tax fraud) by customs authority at import stage, such SST shall not be creditable against the output SST when the goods are sold domestically.


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