Vietnam: Corporate income tax, VAT, customs guidance

Vietnam: Corporate income tax, VAT, customs guidance

Guidance from Vietnam’s tax authorities addresses certain corporate income tax, value added tax (VAT), labor compliance, and customs duty issues.

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Concerning corporate income tax

  • An official letter provides the conditions and supporting document to deduct warranty expenses.
  • An official letter clarifies that interest expenses are not deductible when a company makes a nonbusiness-related advance payment to an employee and funds loans to other companies at 0% interest.

Concerning VAT

  • A circular removes a requirement for taxpayers to register bank accounts with the tax authorities (or notify the authorities) for VAT credit purposes.
  • An official letter sets forth the exchange rate to apply for invoices issued when a company uses foreign currency as its functional currency for accounting record purposes.
  • An official letter provides that input VAT related to the investment stage for trial production must be declared on a VAT declaration form.

Concerning labor compliance

  • A circular addresses work permits issued for foreigners working in Vietnam.
  • An official letter addresses individual (personal) income tax exemption or reduction under an income tax treaty for the avoidance of double taxation. 
  • An official letter provides that a company paying salaries to employees that have signed labor contracts with a company branch is responsible for individual income tax withholding and for declaring and remitting the withheld tax to the tax authorities.
  • A governmental decree provides an increase in the region-based minimum salary, effective 1 January 2017.

Customs duty

  • An official letter provides that the container imbalance charge is included in the customs valuation for import duty calculations.
  • An official letter provides that a financial leasing company that imports goods and then leases these goods to an export and processing enterprise is liable for the import customs duty, at the importation stage.
  • An official letter provides that if goods are traded between an export and processing enterprise and a domestic company, and there is a certificate of origin showing a special zone, then the domestic company is eligible for the benefit of a preferential import rate.
  • An official letter clarifies when there is to be enforcement of a post-clearance customs inspection or customs valuation.

 

Read a November 2016 report [PDF 184 KB] prepared by the KPMG member firm in Vietnam

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