Vietnam: Accounting for corporate income tax incentives

Vietnam: Accounting for corporate income tax incentives

Guidance from the tax authority in Vietnam reaffirms a rule with respect to corporate income tax incentives. The guidance provides that a newly incorporated company in an incentive location that also generates income from business activities conducted in other areas must separately record the revenue generated from each incentive area and from the non-incentive areas.

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Read a September 2015 report [PDF 567 KB] prepared by the KPMG member firm in Vietnam: Technical Update (September 2015)

 

Other topics discussed in this KPMG report include:

  • A bad debt related to a “dividends receivable” (that is, the dividend was declared by not paid because of subsequent financial difficulties) is not deductible for corporate income tax purposes.
  • A change in the basis salary amount for purposes of compulsory insurance contributions is revised beginning 1 January 2016.
  • Input value added tax (VAT) for business activities that are not registered under a business registration certificate is still creditable.
  • VAT declarations may be centralized for certain dependent branches. 
  • A representative office is not allowed to make payments on behalf of overseas parent company for transactions in Vietnam.
  • “Redundant materials” in stock of export processing enterprises (EPEs), not sold on the domestic market, are not subject to import duty and VAT in certain instances. 
  • A pilot program implements self-certification of origin under ASEASN trade in goods agreement.
  • The list of programs and projects to be prioritized for government guarantee has been updated.

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