Accounting and Tax Newsletter No. 02 – February 2025

Tax Administration

31/12/2024: Decision No. 2201/QD-TCT by the General Department of Taxation
Issuing the revised and supplemented process for tax refunds, attached to Decision No. 679/QD-TCT dated May 31, 2023, by the Director General of the General Department of Taxation.

Amendment: Revises regulations regarding the tax authority’s (CQT) reception and processing of tax refund requests submitted by taxpayers (NNT) whose tax affairs are directly managed by the District Tax Department.

23/01/2025: Official Dispatch No. 399/TCT-QLN from the General Department of Taxation on Late Tax Payment Interest Calculation

The directly managing tax authority is responsible for calculating and adjusting late payment interest for the entire tax amount payable by the taxpayer (including the tax payable in allocated areas).

In cases where the taxpayer mistakenly pays late payment interest to the wrong tax authority, resulting in an overpayment in one area and outstanding late payment interest in another, the taxpayer must submit a refund request dossier combined with an offset request for state budget revenues, in accordance with Article 42 of Circular No. 80/2021/TT-BTC.

Value-Added Tax (VAT)

24/01/2025: Official Dispatch No. 428/TCT-KK from the General Department of Taxation on Determining the VAT Refund Period for Input VAT on Exported Goods and Services

In cases where a company engages in both exporting goods and services and selling goods and services domestically, the company must separately account for input VAT used for the production and business activities of exported goods and services.

If separate accounting is not possible, the input VAT for exported goods and services will be determined based on the ratio of revenue from exported goods and services to the total revenue from goods and services. This ratio is calculated over the VAT declaration periods from the period following the most recent tax refund period up to the current tax refund request period.

23/01/2025: Official Dispatch No. 416/TCT-CS from the General Department of Taxation on Value-Added Tax (VAT)

In cases where a company transfers part of a project to continue investing in infrastructure development or housing construction, this activity is considered real estate business, not a transfer of an investment project for production or business purposes. Therefore, the company must declare and apply a 10% VAT rate.

23/01/2025: Official Dispatch No. 415/TCT-CS from the General Department of Taxation on Value-Added Tax (VAT) Policy

In cases where a company temporarily re-imports part of an exported shipment for repairs (using customs declaration form type code G13) and then re-exports the repaired goods back to the original foreign buyer (using customs declaration form type code G23), the company is not required to adjust the revenue for the initial export period.

If the company has already received a VAT refund for the exported goods but part of the shipment is returned by the buyer, the company must submit a supplementary declaration in accordance with Article 47 of the Law on Tax Administration and Article 7 of Decree No. 126/2020/NĐ-CP. Additionally, the company must repay the refunded VAT amount corresponding to the re-imported goods and pay late payment interest in accordance with Clause 3, Article 21 of Circular No. 80/2021/TT-BTC.

Corporate Income Tax (CIT)

24/01/2025: Official Dispatch No. 439/CTBGI-TTHT from the Bac Giang Provincial Tax Department on Corporate Income Tax Incentives

During its operations, the company has amended its Investment Registration Certificate and Business Registration Certificate three times and plans to continue making changes to the Investment Registration Certificate, Business Registration Certificate, changes in equity capital, and changes to the project objectives without altering the total investment capital. The CIT incentives will be determined based on the following principles:

• For enterprises currently enjoying CIT incentives as newly established enterprises from investment projects: Incentives apply only to income generated from production and business activities that meet the investment incentive conditions specified in the initial Business Registration Certificate or Investment Registration Certificate. If an enterprise already in operation amends its Business Registration Certificate or Investment Registration Certificate (e.g., adding business sectors, introducing new products, or increasing the output of registered products) without increasing investment capital, and these changes do not affect the fulfillment of tax incentive conditions for the project, the enterprise will continue to enjoy the existing tax incentives for the remaining period or receive expanded investment incentives if they meet the required conditions.
• For income that does not meet the conditions for CIT incentives: The enterprise must separately calculate the income from production and business activities that are eligible for CIT incentives (including preferential tax rates, exemptions, and reductions) and the income from activities not eligible for incentives. Taxes on these incomes must be declared and paid separately according to Clause 2, Article 18 of Circular No. 78/2014/TT-BTC.
• CIT incentives are applicable only to enterprises that comply with accounting regulations, invoicing, documentation, and declare corporate income tax on a self-assessment basis. The company must determine its eligibility for tax incentives, applicable preferential tax rates, exemption and reduction periods, and deductible losses to declare and finalize taxes with the tax authority following Article 22 of Circular No. 78/2014/TT-BTC.

15/01/2025: Official Dispatch No. 361/CCT-TTTBTK from the Ba Ria – Vung Tau Provincial Tax Department on Filing VAT, Corporate Income Tax, and Personal Income Tax Returns for Dependent Branches

If a company’s branch is a dependent unit that conducts centralized accounting at the headquarters, it must submit VAT, Corporate Income Tax (CIT), and Personal Income Tax (PIT) returns to the tax authority managing the headquarters.

At the same time, the company (headquarters) must submit a tax allocation table (if applicable) for each provincial-level locality entitled to state budget revenue (including dependent units and business locations) to the tax authority managing the headquarters.

Tax Finalization

24/01/2025: Official Dispatch No. 206/CTHNA-TTHT from the Ha Nam Provincial Tax Department on Providing Information for the 2024 Tax Finalization

Some important notes when declaring corporate income tax (CIT) finalization for the 2024 tax period:

• Regarding CIT declaration: Enterprises must self-determine, fully, and accurately declare information in the CIT finalization return (Form No. 03/TNDN) and its accompanying appendices. Special attention should be paid to certain items on Form No. 03/TNDN as follows:
  • Items [G1], [G3]: Taxpayers must declare any CIT overpayments from the previous period carried forward to offset against the CIT payable in the current period.
  • Items [G2], [G4], [G5]: Taxpayers must declare CIT prepayments made during the year, representing the CIT paid for the 2024 tax period.
  • Items [E], [G]: Taxpayers should not declare CIT payable or prepayments related to activities that enjoy tax incentives in other provinces, as these should be declared separately.
• Regarding related-party transaction declarations: Enterprises must identify and declare related-party transaction information accurately. It is essential to control and fully declare related-party transactions, and correctly determine deductible interest expenses (subject to the 30% cap) in compliance with Decree No. 132/2020/ND-CP to avoid errors.
  • If the taxpayer engages in related-party transactions subject to Decree No. 132/2020/ND-CP, they must declare information regarding related-party relationships and transactions following Appendix I, Appendix II, and Appendix III of the decree and submit it along with the CIT finalization return (Clause 3, Article 18 of Decree No. 132/2020/ND-CP).
  • Taxpayers subject to Country-by-Country Reporting obligations must prepare and submit the report as part of the transfer pricing documentation according to Appendix IV issued with Decree No. 132/2020/ND-CP, in compliance with Clause 5, Article 18 of the decree.
  • Cases where taxpayers are exempt from related-party transaction declarations and transfer pricing documentation preparation are specified in Article 19 of Decree No. 132/2020/ND-CP.

Import and Export Tax

E-commerce Tax Declaration

20/01/2025: Official Dispatch No. 311/TCT-DNNCN from the General Department of Taxation on the Implementation of the E-Portal for Households and Individuals to Register, Declare, and Pay Taxes from E-commerce and Digital Platform Business

On December 19, 2024, the General Department of Taxation officially launched the “E-Portal for Households and Individuals to Register, Declare, and Pay Taxes from E-commerce and Digital Platform Business” (abbreviated as the E-commerce Portal for Business Households). This portal is designed to facilitate the tax obligations of households and individuals engaged in e-commerce and digital platform businesses.

Supplementary Tax Declaration

10/01/2025: Official Dispatch No. 95/CTĐLA-TTHT from the Dak Lak Provincial Tax Department on Supplementary Tax Declaration

1. In cases where the project has been accepted, invoices were issued in June 2024, and taxes were declared in Q2/2024, but in October 2024, a decision was issued to reduce the value of certain project items, the following adjustments should be made:

• Adjust or replace the invoice according to Article 19 of Decree No. 123/2020/ND-CP dated October 19, 2020, issued by the Government.
• Submit a supplementary tax declaration according to Clause 1, Article 47 of the Law on Tax Administration No. 38/2019/QH14 and Point b, Clause 4, Article 7 of Decree No. 126/2020/ND-CP as follows:
  • If the supplementary declaration reduces the amount of VAT payable, file the supplementary tax declaration for Q2/2024.
  • If it increases or decreases the amount of deductible VAT, declare the adjustment in the month or quarter when the error is detected (Q4/2024).
• This principle for supplementary VAT declarations also applies to cases that span different fiscal years.

2. If issuing an adjustment invoice leads to an increase or decrease in the corporate income tax (CIT) from previous years, the taxpayer must submit a supplementary CIT finalization declaration for the respective years according to Clause 4, Article 7 of Decree No. 126/2020/ND-CP.

3. If the tax authority has issued conclusions or decisions regarding tax handling after an audit or inspection, and project finalization adjustments arise, the company must submit a supplementary tax declaration according to:

• Clause 3, Article 47 of the Law on Tax Administration No. 38/2019/QH14 (applicable until December 31, 2024), and
• From January 1, 2025, according to Clause 6, Article 6 of Law No. 56/2024/QH15, which amends and supplements certain provisions of the Law on Tax Administration.

Taxpayers submitting supplementary tax declarations following the approved decision to reduce the value of project items, without any administrative violations, will not be subject to penalties for tax violations.