NEWSLETTER JULY 2022
Tax administration
Decree No. 49/2022/ND-CP amending and supplementing a number of articles of Decree No. 209/2013/ND-CP detailing and guiding the implementation of a number of articles of the Law on Value Added Tax (VAT)
On 29 July 2022, the Government issued Decree No. 49/2022/ND-CP amending and supplementing a number of articles of Decree No. 209/2013/ND-CP detailing and guiding the implementation of a number of articles of the Law on Value Added Tax (VAT) that have been amended and supplemented by Decree No. 12/2015/ND-CP, Decree No. 100/2016/ND-CP and Decree 146/2017 /ND-CP. Below we present some of the noteworthy contents of the Decree:
| Content | Decree No. 49/2022/ND-CP | Befofe |
| Deductible land price for VAT calculation | Deductible land price is the land price at the time of transfer of land use right, but does not include the value of infrastructure built on the land.
Accordingly, in case an enterprise received real estates transferred (from organizations/individuals) whose land price included the value of infrastructure as prescribed at Point a, Clause 3, Article 4 of Decree No. 209/2013/ND-CP, the deductible land price for VAT calculation shall be exclusive of the value of infrastructure. |
Deductible land price for VAT calculation is the land price at the time of receiving the land use right, including the value of infrastructure (if any) built on the land;
An enterprise shall not declare and deduct input VAT of infrastructure whose value is included in the deductible land use right value not subject to VAT. If the deductible land price does not include the infrastructure built on it, then the enterprise may declare and deduct input VAT of infrastructure whose value is not included in the deductible land use right value not subject to VAT.
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| Tax payment of business households | Businesses/business households that do not implement or not fully implement the Vietnamese accounting regime, invoice and evidence document regime as prescribed by law shall pay VAT according to the flat-rate method specified in Article 51 of the Law on Tax Administration No. 38/2019/QH14:
– The flat tax rate is calculated yearly (calendar year) or monthly in case of seasonal businesses. – Business households and individuals whose revenue legislations created to support small and medium-sized enterprises have to implement the Vietnamese accounting regime and pay VAT according to the declaration method.
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Businesses/business households that do not implement or not fully implement the Vietnamese accounting regime, invoice and evidence document regime as prescribed by law shall pay VAT according to the flat-rate method specified in Article 38 of the Law on Tax Administration No. 78/2006/QH11:
– The flat tax rate is calculated yearly (calendar year) and shall be publicized within the local communes, wards and townships. – No specific regulations. |
| Subjects eligible for VAT refund (investment projects) | Business establishments that have registered their business, registered to pay VAT by the deduction method (including new businesses established from investment projects) that have new investment projects, in the same province/city, or another province/city where the head office is located, which are in the investment phase; oil and gas field development projects which are in the investment phase.
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New business establishments that have registered their business, registered to pay VAT by the deduction method; oil and gas field development projects which are in the investment phase. |
| Conditions for VAT refund (investment projects) | Remove the requirement for investment period of 01 year or more. | Projects with an investment period of 01 year or more will be refunded VAT on goods and services used for investment on a yearly basis. |
| VAT refund of investment projects of businesses in industries that require conditions | Additional regulations for cases of VAT refund for investment projects of businesses in industries that require conditions that are in the investment phase, have been granted a license/certificate, or have not requested the competent authority to issue/does not require a license/certificate before conducting business activities.
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No specific regulations |
This Decree takes effect from 12 September 2022.
The new regulations on VAT refund mentioned above takes effect from 1 July 2016 (Clause 2, Article 2 of Decree No. 49/2022/ND-CP).
Corporate Income Tax (“CIT”)
2021 CIT reduction (30%) in case an enterprise has no revenue in 2019
On 21 July 2022, the General Department of Taxation issued Official Letter No. 2594/TCT-CS regarding CIT reduction under Decree No. 92/2021/ND-CP. Details are as follows:
In case an enterprise did not generate any revenue in 2019, it is not eligible for CIT reduction according to Resolution No. 406/NQ-UBTVQH15 and Decree No. 92/2021/ND-CP.
In case an enterprise established in 2019, operated for less than 03 months in 2019 and generated revenue: 2019 revenue shall be determined by the actual revenue of 2019 divided (:) by the number of months the enterprise operates in the tax period multiply (x) by 12 months.
Supports for treatment of occupational accidents are deductible expenses
On 27 July 2022, Hai Duong Tax Office issued Official Letter No. 7263/CTHDU-TTHT regarding occupational accident expenses. Details are as follows:
In case an enterprise incurs expenses to support treatment of employees suffering from occupational accidents (treatment not covered by social health insurance) with sufficient invoices and valid evidence documents, (total) payment is of welfare nature, paid directly to the employees and not exceeding 01-month-average salary paid in the tax year, the payment shall be deductible when calculating CIT.
Foreign contractor tax (“FCT”)
FCT on Facebook advertising from 1 June 2022
Hanoi Tax Office issued Official Letter No. 27326/CTHN-TTHT dated 14 June 2022 and Official Letter No. 32111/CTHN-TTHT dated 7 July 2022 regarding the declaration of FCT on Facebook advertising services. Details are as follows:
From 1 June 2022, according to Meta Platform’s agreement with the Government of Vietnam, Facebook will declare tax in Vietnam and require users to provide additional information to issue invoices that show the VAT portion of the service price.
In case Facebook – the foreign contractor – meets the conditions to declare taxes directly to the authority according to the provisions of Circular No. 103/2014/TT-BTC, enterprises will not have to deduct and pay FCT on behalf of the foreign contractor.
In principle, in case a foreign contractor signs a contract with an enterprise to provide services (VAT inclusive), and the foreign contractor declares taxes directly to the tax authority, applies the deductible VAT method, the enterprise’s input VAT from goods and services purchased for production, trading, services activities subject to VAT shall be deductible, according to the provisions of Clause 1, Article 14 of Circular No. 219/2013/TT-BTC. The Vietnamese enterprise may deduct input VAT of services satisfying the conditions for VAT deduction specified in Article 15, Circular No. 219/2013/TT-BTC, Clause 10, Article 1, Circular No. 26/2015/TT -BTC, and Article 1, Circular No. 173/2016/TT-BTC.
Invoice
Invoice issuance and declaration of payment-on-behalf, collection-on-behalf
On 28 July 2022, Hanoi Tax Office issued Official Letter No. 36814/CTHN-TTHT guiding the invoice issuance and declaration of payment/collection-on-behalf. Details are as follows:
In case an enterprise uses e-invoices according to Decree No. 123/2020/ND-CP of the Government, when selling goods or providing services, it must issue invoices to the buyer in accordance with Clause 1, Article 4, Decree No. 123/2020/ND-CP. For collection on-behalf that are not related to the sales of goods and services of the enterprise, the enterprise is not required to declare, calculate and pay VAT according to Point d, Clause 7, Article 5, Circular No. 219/2013/TT-BTC by the Ministry of Finance.
Customs
Invoices for on-the-spot import and export activities
On 12 August 2022, the Ministry of Finance issued Official Letter No. 8042/BTC-TCHQ guiding the use of invoices for goods imported/exported on-the-spot. Details are as follows:
When completing on-the-spot export procedures, the customs declarant shall observe procedures prescribed in Clause 58, Article 1, Circular No. 39/2018/TT-BTC dated 20 April 2018, and submit a warehouse issuing order/internal goods rotation (photocopy), instead of a VAT invoice, to the customs electronic data processing system to the customs authority as prescribed in Point c, Clause 3, Article 13, Decree No. 123/2020/ ND-CP.
When completing out on-the-spot import procedures, the customs declarant shall observe procedures prescribed in Clause 58, Article 1, Circular No. 39/2018/TT-BTC dated 20 April 2018, and submit customs dossier and a VAT invoice (photocopy) to the customs electronic data processing system to the customs authority.