Accounting and Tax Newsletter No. 01 – December 2024

Corporate Income Tax

November 21, 2024: Official Dispatch 5382/TCT-CS from the General Department of Taxation on Tax Policies

In cases where enterprises incur actual expenses related to production and business activities, with invoices and documents as required by regulations, and these expenses are not included in non-deductible expenses (including administrative violation fines), they are deductible when determining taxable corporate income.

November 25, 2024: Official Dispatch 5443/TCT-CS from the General Department of Taxation on Corporate Income Tax Policies

The certificate of incentives for the production of prioritized supporting industrial products serves as the basis for applying corporate income tax incentives under the supporting industry conditions. The determination of the starting point for applying corporate income tax incentives for supporting industrial products is based on the date the product is issued the Certificate of Incentives by the Ministry of Industry and Trade.

November 25, 2024: Official Dispatch 2615/CTCMA-TTHT from the Tax Department of Cà Mau Province on Deductible Expenses for Determining Taxable Income

The expense for customers winning prizes in the company’s promotional programs is considered an expense related to production and business activities and is deductible when determining taxable income.
The Tax Department of Cà Mau Province advises that personal income tax withholding certificates for individual prize-winning customers are not considered documents for recording deductible expenses when determining taxable corporate income.

Value-Added Tax (VAT)

November 19, 2024: Official Dispatch 5309/TCT-KK from the General Department of Taxation on Determining the VAT Refund Period

In cases where a company has both exported goods and services and goods and services sold domestically, the company must separately account for the input VAT used for the production and business of exported goods and services. If separate accounting is not feasible, the input VAT for exported goods and services shall be determined based on the proportion of revenue from exported goods and services to the total revenue of goods and services during the VAT declaration periods from the period immediately following the previous VAT refund period to the current refund request period.

November 6, 2024: Official Dispatch 9946/CTQNI-TTHT from the Tax Department of Quang Ninh Province on Value-Added Tax (VAT) Policies

In cases where a company provides services to export-processing enterprises (EPEs) located in industrial zones, the determination of the geographical boundaries of the non-tariff zone and the application of the VAT rate are based on the following principles:

• A non-tariff zone is a subzone within an industrial park designated for export-processing enterprises. It must be physically separated from the external territory by a system of fences, with gates and entrances that ensure conditions for inspection, monitoring, and control by customs and other relevant authorities as stipulated in regulations governing non-tariff zones under export and import tax laws.
• If a company provides services to an export-processing enterprise but does not meet the consumption conditions within the non-tariff zone as stipulated in Point b, Article 9 of Circular No. 219/2013/TT-BTC of the Ministry of Finance, the 0% VAT rate will not apply.

November 27, 2024: Official Dispatch 5512/TCT-CS from the General Department of Taxation on Value-Added Tax (VAT) Policies

The 10% ratio of revenue from exported goods and services, used to determine the VAT refund for exported goods and services, is calculated for each tax refund period.

November 27, 2024: Official Dispatch 5510/TCT-CS from the General Department of Taxation on Value-Added Tax (VAT) Policies

In cases where a business establishment transitions into an export-processing enterprise (EPE) and is subject to tax policies applicable to EPEs, it shall follow the VAT policies prescribed under the VAT laws.

Invoices and Documents

November 8, 2024: Official Dispatch 5035/CTLAN-TTHT from the Tax Department of Long An Province on Handling Errors in Electronic Invoices

In cases where a company issues an electronic invoice with a tax authority code that has been sent to the buyer but contains an incorrect buyer address while the tax code and other details remain accurate, the company must notify the buyer about the error and report the erroneous electronic invoice to the tax authority using Form No. 04/SS-HĐĐT. Within one working day, the tax authority will notify the company of the receipt and processing result using Form No. 01/TB-HĐSS, as stipulated in Article 19 of Decree No. 123/2020/NĐ-CP dated October 19, 2020, by the Government.

November 15, 2024: Official Dispatch 5255/TCT-TTKT from the General Department of Taxation on Strengthening the Prevention and Combat Against Electronic Invoice Fraud

Taxpayers should take note of the following points:

• Ensure invoice contents comply with the provisions under Clause 7, Article 3, and Article 10 of Decree No. 123/2020/NĐ-CP on invoices and documents.
• Avoid repeated adjustments and amendments to VAT declarations
• Review and verify the consistency, accuracy, and validity of supplemental tax declaration dossiers, including the supplemental declaration, the explanatory report for the supplemental declaration, and other related documents, as stipulated in Article 47 of the Law on Tax Administration and Clause 4, Article 7 of Decree No. 126/2020/NĐ-CP.
• Check for invoices omitted in prior periods but now included in supplemental tax declarations. Supplemental declarations must be conducted according to current regulations.

November 27, 2024: Official Dispatch 5518/TCT-CS from the General Department of Taxation on the Use of Invoices

When an export-processing enterprise (EPE) liquidates assets into the domestic market, it must use sales invoices (specifically for organizations and individuals within non-tariff zones) as prescribed in Clause 2, Article 8 of Decree No. 123/2020/NĐ-CP dated October 19, 2020, by the Government.

September 25, 2024: Official Dispatch 6926/CTKHH-TTHT from the Tax Department of Khanh Hoa Province on Issuing Invoices for Sales Support Payments

In cases where a company enters into a sales contract for goods with distributors (companies, business households, individuals, etc.) and provides sales support payments to these distributors:

• When the company sells goods (including promotional goods, advertising goods, samples, gifts, donations, and exchanged goods), it must issue invoices to the distributors.
• For sales support payments made by the company to distributors in connection with services performed for the company:
  • If the distributor is a VAT taxpayer using the credit method, they must issue VAT invoices upon receiving the sales support payment.
  • If the distributor is a VAT taxpayer using the direct method, they must issue sales invoices upon receiving the sales support payment.
• Payments made on behalf of others or collected on behalf of others that are unrelated to the sale of goods or services by the business entity are not required to be declared or subject to tax, as stipulated in Point d, Clause 7, Article 5 of Circular No. 219/2013/TT-BTC.

Personal Income Tax

November 18, 2024: Official Dispatch 29778/CTBDU-TTHT from the Tax Department of Binh Duong Province on Registering Dependent Deductions for Personal Income Tax

If the child of an employee is currently studying at the university, college, vocational, or professional secondary education level and either has no income or has an average monthly income from all sources not exceeding 1 million VND, they can be identified as a dependent. This allows the taxpayer to register for family circumstance deductions as guided in Subpoint d.1.3, Point d, Clause 1, Article 9 of Circular No. 111/2013/TT-BTC dated August 15, 2013, by the Ministry of Finance (amended and supplemented in Article 1 of Circular No. 79/2022/TT-BTC dated December 30, 2022, by the Ministry of Finance).

Depreciation of Fixed Assets

November 18, 2024: Official Dispatch 29777/CTBDU-TTHT from the Tax Department of Binh Duong Province on Depreciation of Fixed Assets

The company is responsible for determining the depreciation method and depreciation duration for fixed assets (FAs) in accordance with the provisions of Circular No. 45/2013/TT-BTC and must notify the tax authority directly managing the company before starting implementation.

If the company uses the straight-line depreciation method but registers for accelerated depreciation, it constitutes a change in the depreciation duration, not a change in the depreciation method.

When implementing accelerated depreciation for fixed assets in use, the company must adhere to the following requirements:

• Consistency in applying the accelerated depreciation method throughout the entire usage period of the fixed assets.
• Ensure that the accelerated depreciation rate does not exceed twice the depreciation rate determined by the straight-line method.
• Ensure that the company is profitable during the financial year. Profitability should be determined based on the financial statements.

If the company incurs a loss during the financial year when accelerated depreciation is applied, the deductible depreciation expense for determining taxable income will be limited to the depreciation calculated using the straight-line method. The portion of accelerated depreciation exceeding this amount must be adjusted as an increase in taxable income in the company’s corporate income tax finalization return under item B4.