Newsletter

Value Added Tax (“VAT”)

Transfer of the remaining deductible VAT amount after the branch terminates its operation

On 15 April 2024, the General Department of Taxation issued Official Letter No. 1569/TCT-KK as following content:

In case a Company’s branch located in Hanoi, which is a dependent unit of the Company’s headquarters in other province, terminates its operation and closes its tax code, but still has input VAT balance that has not been fully deducted at the time of termination, the branch is allowed to transfer the undeducted input VAT balance to the headquarters so that the headquarters can continue to declare and deduct it according to regulations if it fully meets the conditions for tax deduction according to the VAT law.

Corporate income tax (“CIT”)

Store’s point accumulation program

On 26 April 2024, Hanoi Tax Department issued Official Letter No. 24940/CTHN-TTHT as following content:

In case a Company incurs cash bonus payment to customers when the customers purchase cumulative orders of VND 150 million or more, the Company can record it as deductible expense when determining CIT if it meets the conditions specified in Article 4 of Circular No. 96/2015/TT-BTC dated 22 June 2015 of the Ministry of Finance.

Cost related to destruction of unused materials

On 28 March 2024, Hai Phong Tax Department issued Official Letter No. 952/CTHPH-TTHT answering the tax policy as follows:

In case a Company incurs cost related to the destruction of unused materials due to customers’ production strategy, that is not the case of losses due to natural disasters, epidemics, fires, goods damaged due to expiration date or changes in natural biochemical processes and other force majeure cases, therefore it should not be included in deductible expenses when calculating CIT.