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 authority’s database and commercial database; valid documents and tax inspection results, minimum average tax payable of 03 local business establishments selling the same products and having the same business lines and scale. In case such business establishments are not available or are available but information about their products or business lines or scale is inadequate, information about business establishments in other areas may be used.


Value-added tax (“VAT”)

Late invoice issuance for services provided before July 2023

On 11 August 2023, Hanoi Tax Office issued Official Letter No. 58653/CTHN-TTHT guiding on VAT reduction.

In case a company has a construction project that was accepted in June 2023, but the invoice was issued late in July 2023, this invoice is not allowed to apply VAT rate of 8% according to Clause 1, Article 2 of Decree No. 44/2023/ND-CP dated 30 June 2023.


Handling of erroneous invoices

On 30 August 2023, Hanoi Tax Office issued Official Letter No. 63648/CTHN-TTHT on handling of erroneous invoices.

In case a company provides goods and services eligible for VAT reduction according to Decree No. 15/2022/ND-CP and discovers the errors on invoices after 31 December 2022 that requires to issue an adjusted or replaced invoices, if such adjusted/replaced invoices do not affect goods/services value or taxable price and corresponding VAT amount, such invoices can apply VAT tax rate of 8%. In case errors lead to an adjustment in the value of goods/services and VAT amount, adjusted/replaced invoices must apply the prevailing VAT rate at the time of issuance of adjusted invoices according to the guidance in the Official Letter No. 2121/TCT-CS dated 29 May 2023 issued by the General Department of Taxation.


Corporate income tax (“CIT”)

Tax policy on making payment via an individual’s credit card

On 25 August 2023, Hanoi Tax Office issued the Official Letter No. 62652/CTHN-TTHT with the main content as follows: In case a company buys fixed assets for its business with the value at least VND 20 million (including VAT), authorizes its employee to make payment by his/her credit card to the seller’s account, and then pays back to the employee via bank transfer from the company’s registered account, the company can declare input VAT as well as deduct the expense as deductible expense for CIT purposes if the following conditions are met: This form of payment is regulated in the company’s financial regulation or internal regulation; adequate dossiers to prove the assets are used for company’s business; valid invoices with company’s name and tax code; dossier of authorizing the employee to make payment on behalf of the Company; credit card’s statement showing the amount paid from employee’s card to seller’s  account; bank statement showing money transferred from the company’s account to employee’s account.