Newsletter

Official Letter No. 536/TCT-CS (OL 536): VAT policy on export service

On 09^th February 2018, the General Department of Taxation issued OL 536 on its VAT policy. According to OL 536, in the case where a company provides service for clients located oversea via its website, the Company can apply 0% VAT as guided in Clause 1, Article 9, Circular 219/2013/TT-BTC dated 31^st December 2013 for such service if it meets the following conditions:

• The service contract complies with Decree No. 52/2013/ND-CP dated 16^th May 2013 on E-Commerce.
• The Company has evidence for payment (non-cash method).
• The Company can prove that service is rendered oversea.

Official Letter No. 2629/CT-TT&HT (OL 2629): tax incentives for expansion investment

On 7^th February 2018, Binh Duong Department of Taxation issued OL 2629 on tax incentives for expansion projects:

When a Company has expansion project and its historical cost of fixed assets increased at least by 20% as compared to the total historical cost of fixed assets before the expansion as a result of expansion, which is the requirement to receive tax incentives, the company can choose how to apply tax incentives to the expansion project. The Company can either (a) apply the same tax incentives the company currently applies to the existing project to the expansion project for the remaining incentive period, or (b) apply separate tax incentives to the expansion project, according to the regulations in Clause 4, Article 10 Circular 96/2015/TT-BTC dated 22^nd June 2015.

Official Letter No. 439/TCT-TNCN (OL 439): policy on Personal Income Tax (PIT) of expatriate foreign employees

OL 439 handles the case where a company in Vietnam signs a contract to purchase service from a foreign contractor and the contractor appoints foreign employees to work in Vietnam (expats). In this case, the company in Vietnam has responsibility to inform the foreign contractor about the PIT obligation of the expats. The foreign contractor bears the responsibility to provide information of expats working in Vietnam, including a list of expatriate employees, nationality, passport number, work period, job description, and income to the company in Vietnam. Then, the company in Vietnam has to submit the information to the tax office within 7 days prior to the first day the expats start working in Vietnam.

Official Letter No. 3539/CT-TT&HT (OL 3539): invoice for sample products

On 22^nd February 2018, Binh Duong Department of Taxation issued OL 3539 on issuing invoice for sample products. This OL handles a case where a company sends samples to a customer for advertising purpose without receiving money and follows the regulations stated in the Commerce Law for commercial promotion. In this case, this OL states that the company must issue a VAT invoice, which includes description of the products, quantity of goods and states “samples not for sales” on the invoice. The Company should keep the VAT rate and amount sections of the invoice blank. If the company sends samples to a client that does not comply with the regulations of Commercial Law, this OL states that the company must issue a VAT invoice and declare output VAT.