Newsletter

Tax management

Revision of misstated VAT returns when declaring adjustment/replacement VAT invoice

On 16 December 2022, Hanoi Tax Office issued Official Letter No. 62542/CTHN-TTHT on declaration for adjustment/replacement invoice as follows:

In case an enterprise issued adjustment/replacement invoice as prescribed in Clause 2, Article 19 of Decree No. 123/2020/ND-CP dated 19 October 2020, that results in the necessary revision of VAT returns which had been submitted to the tax authority, the enterprise shall revise each misstated VAT returns as prescribed in Article 47 of the Law on Tax Administration No. 38/2019/QH14 dated 13 June 2019 by the National Assembly and Clause 4, Article 7 of Decree No. 126/2020/ND-CP dated 19 October 2020 by the Government.

Value-added Tax (“VAT”)

Notice on applicable VAT rate

On 27 December 2022, the General Department of Taxation issued Notice No. 620/TB-TCT on applicable VAT rate according to Decree No. 15/2022/ND-CP 28 January 2022.

Following the decision to reduce Value-added tax rate according to Resolution No. 43/2022/QH15 dated 11 January 2022 of the National Assembly on fiscal and monetary policies to aid socio-economic recovery and development, on 28 January 2022, the Government issued Decree No. 15/2022/ND-CP guiding the reduction of VAT for several groups of goods and services, effective from 1 February 2022 to 31 December 2022.

Accordingly, the General Department of Taxation asks that electronic invoice software providers re-adjust the applicable VAT rate of their E-invoice software to the correct and applicable tax rate.

VAT rate of goods and services sold in 2022 but invoiced in 2023

On 29 December 2022, Binh Duong Tax Office issued Official Letter No. 20935/CTBDU-TTHT guiding VAT reduction according to Decree No. 15/2022/ND-CP.

VAT rate of 8% on goods and services observing Decree No. 15/2022/ND-CP shall be applied until 31 December 2022, as prescribed in Article 3 of Decree No. 15/2022/ND-CP. From 1 January 2023, the reduced VAT rate of 8% is no longer in effect. All goods and services which previously eligible for VAT rate reduction shall be subject to the 10% VAT rate, including goods and services sold in 2022 but invoiced in 2023.

Personal Income Tax (“PIT”)

PIT policy on foreign expats

On 16 December 2022, Hanoi Tax Office issued Official Letter No. 62543/CTHN-TTHT regarding PIT of foreign expats.

In case a foreign expat working in Vietnam is a non-resident according to Clause 2, Article 1 of Circular No. 111/2013/TT-BTC and has income from salaries arising in Vietnam directly paid by a foreign organization (a foreign contractor) that has an office in Vietnam whose foreign contractor tax (FCT) has been withheld, declared and paid on behalf by a Vietnamese company, the foreign organization is responsible for withholding PIT of the expat to make payment to the State Budget, according to Clause 1, Article 25 of Circular No. 111/2013/TT-BTC. Applicable tax rate of non-residents is 20%, as prescribed in Article 18 of Circular No. 111/2013/ TT-BTC by the Ministry of Finance.

Electronic PIT withholding receipt

On 4 January 2023, Hanoi Tax Office issued Official Letter No. 388/CTHN-TTHT on electronic PIT withholding receipt.

When withholding personal income tax (PIT), the withholding organization must issue a tax withholding receipt to an individual subject to PIT withholding with contents as prescribed in Article 32 of Decree No. 123/2020/ND-CP.

In case the individual authorizes the organization to finalize his/her PIT, the organization shall not issue the PIT withholding receipt.

For individuals who do not sign labor contract (with the income-paying organization/individual) or sign a labor contract with term of less than 3 months, the income-paying organization/individual may choose to issue the PIT withholding receipt each time they withhold PIT, or issue a single PIT withholding receipt for a given tax period.

For individuals who signed labor contracts with terms of 3 months or longer, the income-paying organizations/individuals shall issue a single PIT withholding receipt for a given tax period.

The content and format of electronic PIT withholding receipt observe provisions of Articles 32 and 33 of Decree No. 123/2020/ND-CP dated 19 October 2020 by the Government.