Newsletter

Value-added Tax (“VAT”)

Declaration of an electronic invoice (“E-invoice”) based on the date of the invoice, not based on the date of digital signing

On 11 March 2022, Hanoi Tax Office issued Official Letter No. 8087/CTHN-TTHT guiding tax declaration of e-invoices of which date is different from their digital signing date. Details are as follows:

In case a bank issues e-invoices according to Decree No. 123/2020/ND-CP, the date of issue (of invoices for service provision) shall observe Clause 2, Article 9, Decree No. 123/2020/ND-CP. In case the bank has service transactions in mass quantity, frequently, requires proper time to cross-check data with the relevant third parties, then invoice issuance date shall observe Clause 3, Article 6, Circular No. 78/2021/TT-BTC issued on 17 September 2021 by the Ministry of Finance. In case any already issued e-invoice has its date different from the date of digital signing, declaration period of such invoice shall

Services provided before 1 February 2022 are not eligible for VAT reduction according to Decree No. 15/2022/ND-CP

On 21 March 2022, Hanoi Tax Office issued Official Letter No. 9277/CTHN-TTT guiding VAT reduction according to Decree No. 15/2022/ND-CP. Details are as follows:

VAT of service provision arises when the service is completed, or when a VAT invoice for such service is issued, irrespective of whether the service fee has been collected or not. For a service that was completed before 1 February 2022, VAT rate of 8% shall not apply (including the case where the company issued VAT invoice for such services after 1 February 2022). If an error invoice was issued before 1 February 2022, and after 1 February 2022 the company issues an adjustment or replacement invoice, then the tax rate at the time of service provision (before 1 February 2022) still applies. If the company does not issue separate invoices for goods and services subject to VAT reduction, then VAT reduction shall not apply.

Corporate Income Tax (“CIT”)                         

Discontinue regional CIT incentives after business relocation

On 4 April 2022, Hanoi Tax Office issued Official Letter No. 12659/CTHN-TTHT guiding CIT policy for when a company relocates its business headquarters. Details are as follows:

If a company which receives CIT incentives for being a new investment project in an area of extremely difficult socio-economic conditions (Son La Province), relocated its head office to Hanoi (not an area of extremely difficult socio-economic conditions) in June 2021, then from 2021 the company no longer receives CIT incentives for being a new investment project in an area of extremely difficult socio-economic conditions, as prescribed in Clause 8, Article 18 of Circular No. 78/2014/TT-BTC issued by the Ministry of Finance on 18 June 2014.

Companies do not have to allocate CIT for non-production dependent establishments

On 14 February 2022, Hanoi Tax Office issued Official Letter No. 5019/CTHN-TTHT on tax declaration of dependent establishments. Details are as follows:

In case a company has accounting dependent branches located in other provinces or cities from its head office that perform commercial, trading activities, management consulting services (not a production facility), the company does not need to allocate CIT for such branches according to Article 17 of Circular No. 80/2021/TT-BTC. The company shall declare all the income generated at the branches at the Tax office managing its head office.

Labor, Social Insurance

New guidance on payment of occupational accident and disease benefits

On 28 December 2021, the Ministry of Labor, War Invalids and Social Affairs issued Circular No. 28/2021/TT-BLDTBXH guiding the Law on Occupational Safety and Hygiene, on benefits for employees suffering from occupational accidents and diseases. Some highlights are as follows:

According to the Circular, payment of occupational accident benefits in some cases has been adjusted.

Accordingly, in case an employee is subject to compulsory social insurance, but his/her employer does not contribute social insurance premiums for him/her, if the employee suffers a labor accident or occupational disease, the employer must pay the employee a benefit equal to the benefit paid by the Social insurance agency.

Salary used as a basis for calculating occupational accident and disease compensation/allowance, payment to employees suffering from occupational accidents or diseases having to take leave for treatment, rehabilitation following Clause 3, Article 38 of the Law on Occupational Safety and Hygiene is the average of the salaries of 6 consecutive months preceding the occurrence of the occupational accident or disease.

If the employee was working under a probationary period of less than 6 months, the salary used as basis shall be the average of those of the months preceding the occurrence of the occupational accident or when the employee is diagnosed with an occupational disease.

The Circular takes effect from 01 March 2022.