Newsletter

Invoice

Issuance of e-invoice for logistic service

On 27 May 2022, Hai Duong Tax Department issued Official Letter No. 45083/CTHDU-TTHT on issuance of invoice for logistics services. Details are as follows:

For an enterprise who is a transportation (logistics) service provider issuing e-invoices according to Decree No. 123/2020/ND-CP, the time of invoicing is when the parties complete reconciling all data, but no later than the 7^th of the month following a month in which the service is provided, or 7 days from the end of the agreed period defined in Clause 4, Article 9, Decree No. 123/2020/ND- CP.

Corporate Income Tax (“CIT”)

Outsourced processing and CIT incentives

On 30 June 2022, Bac Giang Tax Office issued Official Letter No. 3902/CTBGI-TTHT guiding CIT incentives for outsourcing activities. Details are as follows:

During its outsourcing process, in case an enterprise sends raw materials (received from customers) to outsourced companies to process (some not all processing stages), then receives the semi-products back to continue processing before delivering the final products to its customers, such activities qualify as commercial processing activities and the outsourcing costs qualify as expenses for production and business activities. Accordingly, the entire income from the enterprise’s processing activities is entitled to regional CIT incentives.

Personal Income Tax (“PIT”)

Personal income tax policy applicable to non-resident individuals

On 8 July 2022, Hanoi Tax Office issued Official Letter No. 32313/CTHN-TTHT on PIT policy applicable to non-resident individuals. Specific content as follows:

In case a company in Japan (“the Japanese company”) assigns an expat to a company in Vietnam (“the Vietnamese company”) to study the market and perform market research, and the expat is a non-resident for the tax year:

– If the payments by the Vietnamese company to the foreign expat are income from salary, wages, benefit-in-kinds paid by an employer, the Vietnamese company is responsible for withholding 20% PIT before making payment to the individual.

– If the payments by the Vietnamese company to the foreign expat are only payment-on-behalfs (other than that no taxable income paid) of the Japanese company, based on an agreement between the parties, then they are not subject to PIT in Vietnam.

Paper-based PIT withholding receipt

On 12 July 2022, the General Department of Taxation issued Official Letter No. 2455/TCT-DNNCN on the implementation of electronic invoices and other vouchers. Details are as follows:

According to Article 33, Decree No. 123/2020/ND-CP, organizations using electronic PIT withholding receipts is not required to register, notify, and transfer electronic data to the tax authority; a PIT withholding organization may build its own software infrastructure to issue electronic PIT witholding receipts, but the receipts have to include all contents prescribed in Clause 1, Article 32 of Decree No. 123/2020/ND-CP. During the period when electronic PIT withholding receipts are not yet available, organizations (including tax agencies) may use self-issued paper-based PIT withholding receipts. From 1 July 2022, the tax offices shall stop selling PIT withholding receipts printed by the tax authorities; enterpises may use leftover receipts purchased from the tax authorities during this time.

Labor and social insurance                                

Note on applying the overtime limit of 300 hours/year

On 16 June 2022, the Vietnam General Confederation of Labor issued Official Letter No. 4359/TLD-QHLD guiding the implementation of Resolution No. 17/2022/UBTVQH15 with the following notable points:

– Overtime limit of 300 hours/year applies only to cases specified in Clause 1, Article 1 of Resolution 17 and Clause 3, Article 107 of the Labor Code 2019.

– All cases where the overtime limit of 300 hours/year applies, the overtime limit from over 40 hours to 60 hours/month also applies, starting from 1 April 2022.

– When applying the overtime limit according to Resolution 17/2022/UBTVQH15, enterprises still have to observe other overtime regulations set forth in the Labor Code and other guiding documents (such as number of extra working hours per day; overtime wages; consent of the employees; etc.).

– When organizing overtime from over 200 hours to 300 hours/year, an enterprise must notify its local Department of Labor, War Invalids and Social Affairs as prescribed in Clause 4, Article 107 of the Labor Code and Article 62 of Decree No. 145/2020 /ND-CP.

– The period for applying the overtime limit under Resolution 17 is until the end of 31 December 2022, unless extended by the National Assembly.