NEWSLETTER OCTOBER 2022
Tax administration
Tax declaration and tax payment-on-behalf on promotional giveaways and commercial discounts to business households/individuals
On 19 October 2022, the General Department of Taxation issued Official Letter No. 3870/TCT-DNNCN on tax declaration and tax payment-on-behalf on promotional giveaways and commercial discounts to business households/individuals. Details are as follows:
– Regarding promotional giveaways:
In case an enterprise gives an asset which is subject to ownership/use rights registration to a customer, without the sale of goods, such giveaway received by the customer is subject to Personal Income Tax (PIT). In case the enterprise pays cash or benefit-in-kinds to reselling business households as reward for good sales results, the enteprise shall observe Point dd, Clause 5, Article 7 of Decree No. 126/2020/ND-CP dated 19 October 2020 by the Government.
– For promotional bonus, commercial discount:
In case a manufacturing company gives commercial discounts to customers who are business households paying Presumptive tax, for purchasing goods in large quantities, including the case of manufacturing business households, the company shall declare and pay PIT on behalf of the business households at the tax rate of 0.5%.
The business household/individual is responsible for notifying the company of its tax declaration method if the business household/individual pays taxes by the presumptive tax method.
+ If the promotion program is organized in accordance with Clauses 5 and 6, Article 92 of the Commercial Law No. 36/2005/QH11 issued 14 June 2005 by the National Assembly, cash and in-kinds exceeding VND 10 million received by the business household shall be subject to PIT from lottery winnings. The promotion-running organization shall withhold PIT according to Article 15 and Point g, Clause 1, Article 25 of Circular No. 111/2013/TT-BTC issued 15 August 2013 by the Ministry of Finance.
– Regarding tax paid on behalf of customers received promotional giveaways/commercial discounts:
In case it provides giveaways/commercial discounts, etc. to customers and pays taxes on their behalf, an enterprise may not deduct any related VAT, as well as treat any tax paid on behalf as deductible expenses when calculating Corporate Income Tax (CIT).
Major amendments to Decree No. 91/2022/ND-CP on tax declaration
On 30 October 2022, the General Department of Taxation issued Official Letter No. 13/CD-TCT regarding the implementation of Decree No. 91/2022/ND-CP issued 30 October 2022 by the Government, amending and supplementing several articles of Decree No. 126/2020/ND-CP dated 19 October 2020 detailing several articles of the Law on Tax Administration.
Accordingly, Decree No. 91/2022/ND-CP has amended and supplemented the following provisions of Decree No. 126/2020/ND-CP:
– PIT declaration of organizations and individuals who has no withholding PIT;
– Responsibility of E-commerce platforms on providing the tax authority with trader information (of organizations and individuals using the platforms);
– Provisions on temporary payment of CIT, temporary payment of surplus profits after setting up required reserves/funds;
– Submission of Environmental Protection Tax declaration dossiers for domestically mined/collected Coal;
– Regarding cases where the last day of the submission deadline is a weekend or a public holiday;
– Regarding the date when organizations must declare and pay tax on behalf of individuals receiving dividends or stock bonuses.
– Amendment of “Notice of cancellation of invoice template” Form No. 04-1/CC issued in Decree No. 126/2020/ND-CP.
Decree No. 91/2022/ND-CP takes effect from the date of signing. The provisions of Clauses 3, 4 and 5, Article 1 of the Decree shall apply from the 2021 tax year.
Foreign exchange management
Registration procedures for foreign loans
On 26 October 2022, the State Bank issued Decision No. 1826/QD-NHNN on the announcement of amended and supplemented foreign exchange administrative procedures, carried out by the One-Stop Department of the State Bank of Vietnam.
The Decision announced, with guidance, new procedures for foreign loan registration specified in Circular No. 12/2022/TT-NHNN, including:
- Account registration on the Management website for foreign loans and repayment of non-government guaranteed loans.
- Registration of non-government guaranteed foreign loans.
- Registration of change of non-government guaranteed foreign loans.
- Registration of amended account information on the Management website for foreign loans and repayment of non-government guaranteed loans.
The Decision takes effect from 15 November 2022 and supersedes Decision No. 504/QD-NHNN dated 5 April 2016.
Labor
Change of mandatory Unemployment Insurance premium paid by employers
On 24 September 2021, the Government issued Resolution No. 116/NQ-CP on Policies to support employees and employers affected by the COVID-19 pandemic using Unemployment Insurance Fund. Accordingly, the employer’s contribution rate was reduced from 1% to 0% of the monthly salary of employees subject to unemployment insurance. Applicable employers include those who participate in the unemployment insurance program before 01 October 2021, and do not include State agencies, political organizations, socio-political organizations, People’s armed forces units, and public non-business institutions funded by the State Budget. The period of reduction was 12 months from 01 October 2021 to 30 September 2022. Thus, from 01 October 2022, subject employers may no longer pay reduced unemployment insurance premiums. Unemployment insurance premiums shall return to 1% of the monthly salary.