Circular No. 60/2019/TT-BTC (Circular 60) amending, supplementing several articles in Circular No. 39/2015/TT-BTC (Circular 39) about customs value of imported and exported goods

On 30th August 2019, the Ministry of Finance issued Circular 60, which amends and supplements several articles of Circular 39 about customs value of imported and exported goods. In Circular 60, several new regulations about criteria to build up the list of risky companies in customs value are added. It also amends the regulations about principles and methods in determining the custom value for imported goods, methods in determining the transaction value for imported goods and custom value database which were stated in Circular 39.

Circular 60 comes into force from 15th October 2019.


Circular No. 48/2019/TT-BTC (Circular 48): some new regulations about provision

We highlight some important amendments and supplements in provision for tax purpose from Circular 48 issued by the Ministry of Finance on 08th August 2019, as follows:

Allowance for doubtful debts:

According to previous regulation (Circular No. 228/2009/TT-BTC dated 07th December 2009 issued by the Ministry of Finance), a company must obtain the debt reconciliation in order to consider the allowance made for doubtful debts as deductible expense for CIT purpose. Under Circular 48, in case the company cannot obtain this document, an alternative such as document sent to clients requesting the debt reconciliation or payment request (having the stamp or confirmation from the post service) can be shown as eligible evidence to consider the allowance made as deductible expense for CIT purpose.

This Circular also adds the regulations for making allowance for doubtful debts in some specific kinds of business, such as telecommunication company or retail sales company.

Provision for financial investments

The company is allowed to make provision for financial investments in Vietnam only.

This Circular comes into force from 10th October 2019 and shall be applied for the fiscal year 2019.

This Circular ends the validity of Circular 228 as well as Circular No. 34/2011/TT-BTC dated 14th March 2011, Circular No. 89/2013/TT-BTC dated 28th June 2013 issued by the Ministry of Finance which amend and supplement for Circular 228 and other regulations about provision which are different from this Circular.


Official Letter No. 1903/CT-TTHT (OL 1903) about CIT incentives

OL 1903 issued by Bac Ninh Department of Taxation on 22nd August 2019 answers the question about CIT incentives, in which the company has an investment project originally located in the area that does not receive CIT incentives and now, it relocates to a new area which applying CIT incentives. In this case, income from this project is not subject to tax incentives applied for geographical areas eligible for CIT incentives.

In case the company, after moving the project to the aforementioned area, increases its capital to expand the project and the expanded project satisfies one of the criteria about CIT incentives stated in current CIT regulations, the incremental income from the expanded project is subject to CIT incentives.


Official Letter No. 15889/CT-TTHT (OL 15889): criteria for determining residential individual for PIT purpose

On 12th August 2019, Binh Duong Department of Taxation issued OL 15889 which handles the specific case. A foreigner uses the company’s address to register for the temporary residence, owns an over-1-year temporary residence card as well as having the work permit with the term over 1 year. However in fact, the foreigner stays in Vietnam less than 183 days in the taxable year, and there is no other evidence to prove that the foreigner is resident of any other countries, that foreigner is resident in Vietnam according to the regulations stated at Point b.2.2, Clause 1, Article 1, Circular No. 111/2013.TT-BTC dated 15th August 2013 by the Ministry of Finance.


Official Letter No. 2250/CT-TTHT (OL 2250) about tax policy

OL 2250 issued by Hai Phong Department of Taxation on 20th August 2019, answers the question about an export processing enterprise (EPE) renting its factory and office to another party. In this case, VAT and CIT of office/factory rental activity are regulated as follows:

– Invoice and VAT: for both normal and EPE clients, the company issues sales invoice (Form 07KPTQ of Circular No. 39/2014/TT-BTC dated 31st March 2014 by the Ministry of Finance).

– In case the lessee is an EPE, the income from office/factory rental is not subject to VAT.

– In case the lessee is not an EPE or organization/individual inside the non-tariff area, the company declares and pays VAT based on direct method using VAT return form No. 04/GTGT, with the tax rate of 5%.

– For CIT: In case the company rents the factory and office (or do other kind of business activities which are different from those registered in the initial Investment Registration Certificate) without increasing the investment capital or the new business activities does not relate to the expanded investment project, income earned from the rental is not subject to CIT incentives.