Vietnam Tax & Legal Update - Jan&Feb 2013

We are pleased to attach our Vietnam Legal and Tax Update for January and February 2013. In this edition, we highlight the following breaking news...

  • Solutions to relieve difficulties for enterprises in 2013 (Resolution 02/NQ-CP and Circular 16/2013/TT-BTC). The Government has just issued a Resolution (for which the MOF has just released Circular 16 for detailed guidelines) to provide a number of solutions to relieve difficulties for business production, market support and handling bad debts. Apart from measures to help enterprises release inventory and effectively use and manage credit funds, there are some notable tax incentives such as the delay of tax payments (Value Added Tax and Corporate Income Tax) applicable for Small-Medium sized Enterprises and some other types of enterprises. It should be also noted that the definition of SMEs has changed (from previous tax incentives), in which SMEs include those employing less than 200 staff and having annual turnover not exceeding 20 billion dong.
  • Guidelines on 2012 Personal Income Tax Finalization (Official Letter No. 187/TCT-TCTN). This guideline from the General Department of Taxation has clarified some issues for PIT Finalization, such as  cases where an expat has already finalized his/her tax upon exiting Vietnam prior to 31 December, but then returned to Vietnam and worked until the end of the year;
  • Business Registration amendments update. The Government has issued Decree No.05/2013/ND-CP to amend and supplement a number of articles of Decree No. 43/2010/ND-CP dated 15 April 2010 on business registration. Right after that, the Ministry of Planning and Investment issued Circular 01/2013/TT-BKHDT which completely replaces Circular 14/2010/TT-BKH providing detailed guidance on dossiers, order, procedures and a number of issues related to business registration.
  • Guidance on invoice correction (Official Letter No. 487/TCT-CS). Although according to the Official Letter, the General Department of Taxation has accepted the case where an incorrect invoice was fixed by a minute between buyer and seller (which we find has been a common practice in Vietnam), this is a notable reminder for enterprises that, for invoices with incorrect content, the law does requires a new invoice to be issued in replace of the defective one.
  • Interest rates on loans between related parties (Official Letter No. 299/TCT-CS). Following two official letters of Hochiminh City Department of Taxation on the determination of deemed interest on interest-free loans between two related companies, the General Department of Taxation has issued Official Letter No. 229/TCT-CS on 22 January 2013 to reconfirm the issue.
  • Providing guidance on invoicing of entrusted export (Official Letter No. 450/TCT-CS). According to this Official Letter, in cases where the export enterprise entrusts another enterprise (entrusted enterprise) to do the exporting, the export enterprise shall use delivery note cum internal transfer order when transporting goods to the entrusted enterprise and only issue VAT invoice (zero rate) when goods are actually exported.

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