NEWSLETTER NOVEMBER 2017
Official Letter No. 5483/TCT-DNL (OL 5483): VAT invoice requirements for gifts given to customers
On 28th November 2017, the General Department of Taxation issued OL 5483 answering Ho Chi Minh Tax Department. OL 5483 states that when a company gives gifts to its clients to facilitate its business, the company must issue VAT invoices, declare and pay VAT output for these gifts.
In case the clients do not require VAT invoices, at the end of each day, the Company must issue one invoice for total amount of gifts given to all clients during the day, sign and keep all 3 copies (VAT invoice for seller, buyer and archiving) regardless of the value of the gifts.
Official Letter No. 7817/TCHQ-TXNK (OL 7817): tax policy on import of goods used for production of goods for exports
On 29th November 2017, the General Department of Customs issued OL 7817 with the following contents:
This OL handles a case where a company imported materials and/or spare parts in order to manufacture export goods. After importing, the company transferred the materials/spare parts to its dependent branches for manufacturing, and then received goods that were still work-in-progress from its branches for further processing and exported the finished goods. According to Clause 7 Article 16 of the Law on Import and Export Duties and Article 12 of Decree No. 134/2016/ND-CP, the Company receives tax exemption on such materials/spare parts. The customs procedures of importing and exporting activities are guided by Article 5 of Decree No. 08/2015/ND-CP dated 21st January 2015 and Article 58 of Circular No. 38/2015/TT-BTC issued by the Ministry of Finance.
Official Letter No. 5249/TCT-TNCN (OL 5249) about PIT policy
On 15th November 2017, the General Department of Taxation issued OL 5249 answering Hanoi Tax Department on PIT policy. According to this OL, in case (1) a company sponsors its employees’ tuition for international accounting/auditing courses, such as ACCA, which are in line with the employees’ professional duties as well as the company’s business/strategic plan, (2) the employees pay their tuitions in advance from their personal bank accounts and collect invoices issued by the ACCA organization (or the like) addressed to the employer, and (3) the employer reimburses the tuition to the employees, then the tuition the employer sponsors is non-taxable when determining the employees’ personal taxable income.
Official Letter No. 71461/CT-THHT (OL 71461): foreign contractor tax (FCT) policy on hotel booking service
On 6th November 2017, Hanoi Tax Department issued OL 71461. According to this OL, accommodation establishments are responsible for withholding, declaring and paying FCT on behalf of foreign contractors when customers make reservations using online booking websites of foreign contractors. FCT is calculated on the commission fee paid to foreign contractors.
Official Letter No. 76519/CT-TTHT (OL 76519): VAT invoice requirements for finance lease agreement s
Hanoi Tax Department issued OL 76519 on 23 November 2017 which states that when finance lease assets are subjects to VAT, lessors must issue VAT invoices. This OL also mentions when the lessees are EPEs, the lessors may apply 0% tax rate on VAT invoices, except for vehicle finance leases, according to the point 3 Article 9 of Circular No. 219/2013/TT-BTC.