NEWSLETTER JUNE 2023
Value-added Tax (“VAT”)
Receiving donations to perform advertising services for the donors
On 14 June 2023, Hanoi Tax Office issued Official Letter No. 41474/CTHN-TTHT detailing tax policy when one receives donations as follows: In case a party receives donations to perform services for the donors, such as advertisement service, the donation recipient must declare and pay VAT and CIT according to Clause 1, Article 5 of Circular No. 219/2013/TT-BTC, and Article 5 of Circular No. 78/2014/TT-BTC.
No penalty for not submitting invoice usage report from 1 July 2022 for taxpayers who have registered to use E-invoices
On 9 June 2023, the General Department of Taxation issued Official Letter No. 2330/TCT-CS on E-invoices, details are as follows: Regarding a taxpayer who registered to use E-invoices and was accepted by the tax authority, after Circular No. 39/2014/TT-BTC expired on 1 July 2022, there is no basis for a tax office to fine the tax payer for administrative violations related to invoice usage report of June 2022 or 2nd quarter of 2022 submitted after 1 July 2022.
VAT of accounting independent branches
On 30 June 2023, Hanoi Tax Department issued Official Letter No. 45056/CTHN-TTHT guiding tax policy as follows: In case a company assigns certain tasks to an accounting independent branch to perform, and transfer the performance costs to the branch, the branch must issue invoices, declare and pay taxes according to regulations.
CIT incentives for investment projects that manufacture supporting industry products
On 26 June 2023, Hanoi Tax Office issued Official Letter No. 43860/CTHN-TTHT guiding CIT incentives for investment projects on supporting industry product manufacture, details are as follows:
– In case a company has an expansion investment project on manufacturing products that are on the list of prioritized supporting industry products (effective from 1 January 2015), that meets one of the criteria specified in Clause 4, Article 10 of Circular No. 96/2015/TT-BTC, and the project has been granted a Certificate of incentives for manufacturing supporting industry products, according to regulations, by a competent authority, income from the expansion project is subject to a tax exemption/reduction period (preferential tax rate is not applied) of the same length with the tax exemption/reduction period (CIT exemption for 4 years, 50% CIT reduction for the next 9 years) for income from a new investment project that manufactures supporting industry products, according to Clause 16 Article 1 Decree 12/2015/ND-CP dated 12 February 2015 by the Government.
– In case expansion project has not applied its CIT incentives from the date of its Investment Certificate, income from the expansion project is subject to the whole tax exemption/reduction period according to regulations, starting from the tax period where it is granted the Certificate of incentives for manufacturing supporting industry products.
– CIT incentives are applicable only to enterprises who observe accounting, invoice and evidence document regulations and pay CIT as declared. Enterprises must determine the conditions of tax incentives, preferential tax rates, tax exemption or reduction periods, and deductible losses when declare and finalize CIT with the tax authority.