Vietnam: Taxation of branch offices, permanent establishments; customs duty updates

Vietnam: Taxation of branch offices

Corporate income tax guidance—“official letters” or circulars—issued by the tax authorities provides the following:

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  • A branch office established in the 2007-2008 period is treated as an expansion investment project and is eligible for certain tax reduction and tax exemption benefits, but does not qualify for the incentive tax rate.
  • Interest income arising from a short-term savings account in which charter capital is deposited will be taxable for corporate income tax calculation purposes.
  • Guidance concerning the provision, use, and accounting for a reserve fund to compensate for damage to the environment applies to certain business activities including oil and gas, chemical and petroleum manufacturing, trading, and transport, and storage, transport and disposal of hazardous waste and goods.
  • Guidance on the allocation and management of the “science and technology development fund” in enterprises supplements earlier provisions.
  • A circular supplements and amends certain articles on the management and depreciation of fixed assets.
  • A representative office of foreign organizations conducting trade promotion activities in Vietnam is regarded as a “permanent establishment” of the foreign entity.

 

Read an October 2016 report [PDF 212 KB] prepared by the KPMG member firm in Vietnam

Other items briefly described in this KPMG report include:

  • Individual (personal) income tax—the monthly mid-shift meal allowance is increased to VND 730,000 per person.
  • Import-export customs duty—there are new rules for determining what is the deadline for purposes of the certificate of origin; for determining customs exemptions; and for export tariffs, preferential import tariffs and special preferential import tariffs.

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