Value Added Tax (“VAT”) Issuance of invoices for capital contribution activity On 16 May 2024, Da Nang Tax Department issued Official Letter No. 4371/CTDAN-TTHT with following content: In case a company contributes capital by assets (with all invoices and documents as prescribed) to establish a business enterprise, the company does not need to declare and pay VAT. Dossier for assets contributed as capital to the enterprise must include: Minutes of capital contribution, Joint venture contracts/Agreements; Minutes of asset valuation of the Council for capital contribution (or valuation document of an organization with valuation function as prescribed by law), accompanied by...



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...



Corporate income tax (“CIT”) Tax treatment for business activities eligible for CIT incentive On 20 March 2024, Binh Duong Tax Department issued Official Letter No. 6427/CTBDU-TTHT guiding on CIT tax treatment as follows: According to the instructions in Clause 9, Article 18 of Circular No. 78/2014/TT-BTC: In the same tax period, the Company incurs losses in business activities eligible for tax incentives, while having profit from business activities not eligible for tax incentives, or other profit from business activities (excluding income from real estate transfer activities, transfer of investment projects; income from transfer of rights to participate in investment projects,...



Tax policy on capital transfer and capital donation activities of foreign companies not present in Vietnam On 23 February 2024, Hanoi Tax Department issued Official Letter No. 8983/CTHN-TTHT with the main content as follows: – In case a foreign company (without presence in Vietnam) transfers its capital contribution in a company in Vietnam to another shareholder that is a non-resident individual in Vietnam, the foreign company must declare and pay corporate income tax (CIT) on income from capital transfer activity. The declaration and tax payment shall follow the guidelines in Article 11 and Article 14 of Circular No. 78/2014/TT-BTC and Article 8...



Tax policy Interest on bank deposit and interest on loan during construction period On 23 January 2024, the Tax Department of Vinh Phuc Province issued Official Letter No. 169/CTVPH-TTHT guiding interest income on deposit during the investment period as follows: In case a company’s new investment project is in the construction period, has not yet been put into production and business activities, and if the company incurs interest income on bank deposit, it will be offset against loan interest payments (if any) as long as these deposit interest income and loan interest payments are eligible for capitalization according to the...



Tax policy Enterprises with many investment projects in the same province must keep accounting record separately for each project; Exchange rate differences during the investment phase of forming fixed assets are allocated no more than 5 years after the fixed assets are completed and put into use. On 20 December 2023, Hai Duong Tax Department issued Official Letter No. 17075/CTHDU-TTHT on accounting and corporate income tax as follows: – In case the Company has many different investment projects in the same province and the Company only uses one accounting book system for one annual accounting period. The accounting of new...



Value Added Tax (“VAT”) Reduction of VAT by 2% from 1 January 2024 to 30 June 2024 On 29 November 2023, the National Assembly approved the Resolution No. 110/2023/QH15 with the notable content as follows: Reducing 2% of VAT rate for the group of goods and services specified in Point a, Section 1.1 Clause 1, Article 3 of Resolution No. 43/2022/QH15 of the National Assembly on fiscal and monetary policies to support the socio-economic recovery and development program during the period from 1 January 2024 to 30 June 2024. The reduction of VAT by 2% shall apply to goods that...



Tax Policy Export processing enterprises supplying goods to domestic market On 6 November 2023, Binh Duong Tax Department issued Official Letter No. 27077/CTBDU-TTHT on tax policy as follows: Export processing enterprises that sell goods to the domestic market (export or entrusted export to the domestic market) are not allowed to use foreign currency in the territory of Vietnam. Therefore, all transactions, payments, quotes, valuations, and price written in contracts of export processing enterprises when selling goods to the domestic market must be written in VND.   Invoice Issuance of invoice each time when applying enforcement measures to stop using invoices...



Tax Policy VAT deduction On 4 October 2023, the Government issued Resolution No. 164/NQ-CP with the following remarkable content: The Ministry of Finance has proposed to the National Assembly continue to apply 2% VAT reduction in the first half of year 2024. The national Assembly Standing Committee will consider and decide to apply it in case the economic and business situation remain weak and report to the Prime Minister before 7 October 2023.   30% reduction of land rent payable in 2023 On 3 October 2023, the Prime Minister issued Decision No. 25/2023/QD-TTg with some notable points below:  – 30% reduction...

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