Newsletter

Value-added Tax (“VAT”)

Enterprises must prepare an adjusting memo when issuing adjusted e-invoices

On 30 August 2021, Hanoi Tax Department issued Official Letter No. 33105/CTHN-TTHT regarding issued e-invoices, details are as follows:

In case an enterprise still uses old model e-invoices, the handling of e-invoices that contain incorrect information shall follow the provisions of Clause 2, Article 9, Circular No. 32/2011/TT-BTC. If an incorrect e-invoice has been sent to the buyer and both the seller and the buyer have declared the invoice, an adjusting memo (electronically-signed by both parties) must be prepared and issued together with the adjusted e-invoice.

Sponsored Covid-19 anti-pandemic supplies are exempt from import tax and VAT

On 11 September 2021, the Government issued Resolution No. 106/NQ-CP regarding tax policies on supplies imported to sponsor Covid-19 prevention and control efforts. Accordingly, supplies imported to sponsor Covid-19 prevention and control efforts shall be exempt from import tax and VAT, similar to humanitarian aid goods listed in Point b, Clause 4, Article 2 of the Import and Export Tax Law No. 107/2016/QH13, and Clause 19, Article 5 of the Law on VAT No. 13/2008/QH12.

The Resolution takes effect from the date of issuance.

Corporate Income Tax (“CIT”)                         

Salaries expense from unused paid-leaves

On 22 July 2021, the Tax Department of Hai Phong City issued Official Letter No. 1814/CTHPH-TTHT on payments of unused paid-leaves. Details are as follows:

In principle, the Labor Code only allows payment of unused paid-leaves to employees who resign or lose their jobs. Therefore, in case a company makes payments of unused paid-leaves in any other cases, such payments shall not be deductible when calculating CIT.

Export revenue recording date is the date of completing customs procedures

On 9 August 2021, the Tax Department of Bac Ninh Province issued Official Letter No. 2190/CTBNI-TTHT on the date to record export revenue for CIT calculation. Details are as follows:

In case a company exports goods overseas by sea, air, railway or inland waterway, it shall record export revenue based on the date of customs procedure completion, stated on its customs declaration(s).

An enterprise’s expenses to purchase Covid-19 vaccines and/or vaccinate its employees are CIT deductible

On 3 August 2021, the General Department of Taxation issued Official Letter No. 2921/TCT-CS on Covid-19 vaccine purchase expenses and/or vaccination expenses. Details are as follows:

In case an enterprise incurs expenses to purchase Covid-19 vaccines and/or vaccinate its employees, if such expenses satisfies conditions of deductible expenses and do not belong to the regulated list of non-deductible expenses, they shall be deductible when calculating CIT.

Customs

Goods imported for processing by an enterprise which has no processing facilities shall not be tax-exempt

On 17 August 2021, the General Department of Customs issued Official Letter No. 4065/TCHQ-TXNK regarding goods imported for processing by an enterprise which has no processing facilities. Details are as follows:

In case a company does not have a processing facility, the conditions (the taxpayer owns or has the right to use an export-processing facility and machinery, equipment at the facility that is within the territory of Vietnam) specified in Clause 2, Article 10 of Decree No. 134/2016/ND-CP as amended and supplemented in Clause 4, Article 1 of Decree No. 18/2021/ND-CP are not satisfied. Thus, goods imported for processing by an enterprise which has no processing facilities are not tax-exempt.

Goods imported by subcontractors for construction works serving export-processing enterprises (EPEs) are not exempt from import tax

On 27 August 2021, the General Department of Customs issued Official Letter No. 4199/TCHQ-TXNK regarding goods imported to construct factories, offices for EPEs. Details are as follows:

In case a subcontractor who is a domestic enterprise signs a contract with a main contractor who is also a domestic enterprise to participate in the construction of factories and offices of an EPE, when the subcontractor directly imports goods for the construction work serving the EPE, it must declare/pay import tax and VAT on such goods.

The content of Official Letter No. 4199/TCHQ-TXNK is similar to that of Official Letter No. 3901/TCHQ-TXNK dated 5 August 2021 by the General Department of Customs.

Labor

Emergency support for union members and labors affected by the 4th Covid-19 outbreak from 27 April 2021

On 9 August 2021, the Vietnam General Confederation of Labor issued Decision No. 3022/QD-TLD which amends and supplements a number of articles of Decision No. 2606/QD-TLD dated 19 May  2021 by The Presidium of the Vietnam General Confederation of Labor, regarding emergency support for union members and labors affected by the 4th Covid-19 outbreak from 27 April 2021. Accordingly:

– Union members and employees in areas of labor relations (including enterprises and establishments that have not set up a labor union) who are Covid-19 infected and have no record of violating the law on epidemic prevention and control are entitled a support of maximum of VND 3,000,000/person.

– Union members and employees (of agencies, establishments and enterprises that pay trade union contributions) who are F1 and must undergo medical quarantine at the request of a competent authority, and have no record of violating the law on epidemic prevention and control are entitled to a support of maximum of VND 1,500,000/person.

– Union members and employees (of agencies, establishments and enterprises that pay union contributions) who cannot work due to medical quarantine, or who reside in quarantine areas at the request of a competent authority, and have no record of violating the law on epidemic prevention and control are entitled a support of maximum of VND 500,000/person, in one of the following cases:

a) Is under difficult livelihood circumstances;

b) Is pregnant or raising a child under 6 years old.

Additional subjects exempt from union contributions

On 10 August 2021, the Vietnam General Confederation of Labor issued Official Letter No. 2475/TLD regarding additional subjects exempt from union contributions. Details are as follows:

Union members who earn salaries lower than the regional minimum salary from non-commercial establishments and enterprises are not required to pay union dues during the period in which they earn such salary.

The period of union contribution exemption due to Covid-19 is from 1 May 2021 to the end of 31 December 2021.

Meal support for union members and employees who are working “on-the-spot” at enterprises located in areas that implement provincial and city-wide social distancing according to Directive 16/CT-TTG

On 24 August 2021, the Vietnam General Confederation of Labor issued Official Letter No. 3089/QD-TLD on meal support for union members and employees who are working “on-the-spot” at enterprises located in areas that implement provincial and city-wide social distancing according to Directive No. 16/CT-TTG. Details are as follows:

– Applied to union members and employees working at enterprises that pay trade union contributions, implementing “on-the-spot” production.

– Support amount: VND 1,000,000/person. This is a 1-time payment.

The decision takes effect on 24 August 2021.

Employees can claim social insurances based on the period which their employer contributes social insurance premiums

On 6 September 2021, Vietnam Social Insurance Agency issued Official Letter No. 2802/BHXH-CSXH regarding the implementation of the social insurance regime for employees of bankrupt employers who still have social insurance premiums payable.

Accordingly, to protect the interests of employees of bankrupt enterprises who still owe social insurance premiums, the Agency shall temporarily allow the employees to claim benefits (maternity, pension, bereavement compensation, one-time social payment, and so on) based on the period which theỉr employer has paid social insurance premiums (not including periods of non-payment).

In applicable cases, the Agency shall temporarily calculate and pay social insurance benefits based on the actual period of contribution. After the employer has settled all social insurance payable, the Agency shall settle the difference between the standard benefits and the temporary payments to the employees.

Payment process: Maternity benefits shall be processed as are cases of employment severance prior to giving birth/child adoption. Pension and bereavement compensation shall be processed as are cases of social insurance benefit reservation.