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...



Tax policy Tax imposition of related-party transactions not following the market value According to the Official Letter No. 59259/CTHN-TTHT issued by Hanoi Tax Office on 15 August 2023, in case a taxpayer sells, buys, exchanges, and records goods and services not following the market value, or fails to comply with the regulations on declaration and determination of related-party transactions shall be imposed tax as regulated in Article 50 of the Law on tax administration No. 38/2019/QH14. The basis for tax imposition for taxpayers that are organizations is implemented according to Article 15 of Decree No. 126/2020/ND-CP which includes the tax...



Tax Policy  Tax audit process On 14 July 2023, the General Department of Taxation issued Decision No. 970/QD-TCT on the tax audit process as follows: The decision to regulate the tax audit process including tax audit at the tax office and at the taxpayer’s (enterprise) headquarters will be effective from 14 July 2023. Accordingly, the selection of enterprises for audit at the tax office is prioritized in the order of high risk and combined with the consideration of selecting enterprises that have not been inspected for more than 5 years (refer to point 1.2 of Section II of this Decision)....



Value-added Tax (“VAT”) Receiving donations to perform advertising services for the donors On 14 June 2023, Hanoi Tax Office issued Official Letter No. 41474/CTHN-TTHT detailing tax policy when one receives donations as follows: In case a party receives donations to perform services for the donors, such as advertisement service, the donation recipient must declare and pay VAT and CIT according to Clause 1, Article 5 of Circular No. 219/2013/TT-BTC, and Article 5 of Circular No. 78/2014/TT-BTC.   No penalty for not submitting invoice usage report from 1 July 2022 for taxpayers who have registered to use E-invoices   On 9...

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