Newsletter

Tax policy

Interest on bank deposit and interest on loan during construction period

On 23 January 2024, the Tax Department of Vinh Phuc Province issued Official Letter No. 169/CTVPH-TTHT guiding interest income on deposit during the investment period as follows: In case a company’s new investment project is in the construction period, has not yet been put into production and business activities, and if the company incurs interest income on bank deposit, it will be offset against loan interest payments (if any) as long as these deposit interest income and loan interest payments are eligible for capitalization according to the provisions of accounting law.  In case the deposit interest income is higher than the loan interest expense after net-off, the remaining difference is recorded as a decrease in the investment value and is not included in the operating income.

Value Added Tax (“VAT”)

Proof of receiving money on time from export sales for VAT refund

On 19 January 2024, the General Department of Taxation issued Official Letter No. 257/TCT-CS on tax policy as follows: In case on the payment due date of the export contract or appendix, a company cannot provide payment documents, which means the company does not ensure the conditions for VAT deduction and refund, the Tax Department will revoke the refunded tax amount in accordance with the provisions of VAT Law and Tax Administration Law.

Corporate income tax (“CIT”)

The act of not paying or underpaying temporarily corporate income tax is not subject to administrative penalties for under-declaring tax.

On 17 January 2024, the General Department of Taxation issued Official Letter No. 230/TCT-KK with the contents as follows:

Corporate income tax (CIT) is subject to annual finalization declaration and temporary tax payment quarterly.  According to the provisions of the Law on Tax Administration and guidance, taxpayers are not obliged to declare or submit quarterly CIT declarations. The taxpayers must determine by themselves the amount of temporary quarterly corporate income tax.  The temporarily paid CIT amount declared on the annual CIT finalization is the actual tax amount paid by the taxpayers;  The act of not paying or underpaying temporary CIT is not subject to administrative penalties for under-declaring tax as prescribed in Article 16: “Penalties for false declarations leading to underpayment of tax amount or increase in tax amount exempted, reduced, or refunded” of Decree No. 125/2020/ND-CP dated 19 October 2020.