| No. | Official Dispatch | Content | Date of issuance |
|---|---|---|---|
| Newly issued laws and resolutions | |||
| 1 | National Assembly's Law on Value Added Tax, No. 48/2024/QH15 | Key Amendments:
- Non-cash payment documentation is required for goods and services valued at under VND 20 million.
- The revenue threshold for Value Added Tax (VAT) and Personal Income Tax (PIT) liability has been raised to VND 200 million. Learn more… |
Issued: November 26, 2024 Effective Date: July 1, 2025 |
| 2 | Law No. 56/2024/QH15 Amending and Supplementing Several Articles of Various Laws (including the Law on Securities, the Law on Accounting, the Law on Independent Auditing, the Law on the State Budget, the Law on Management and Use of Public Assets, the Law on Tax Administration, the Law on Personal Income Tax, the Law on National Reserves, and the Law on Handling Administrative Violations) | Some noteworthy new points:
- Foreign e-commerce platforms must register and declare taxes in Vietnam, and pay taxes on behalf of individuals and household businesses.
- It is not allowed to supplement tax declarations when there is a tax inspection or examination decision... Learn more… |
Issued on November 29, 2024 Effective from January 1, 2025 |
| 3 | National Assembly Resolution No. 174/2024/QH15 (8th Session, 15th National Assembly) | - Extends the 2% reduction in Value Added Tax (VAT) rates for eligible goods and services as stipulated in Point a, Clause 1.1, Article 3 of National Assembly Resolution No. 43/2022/QH15 on fiscal and monetary policies supporting the socio-economic recovery and development program from January 1, 2025, to June 30, 2025. - Commencing January 14, 2025, the tax exemption for low-value imported goods shipped via express delivery will be terminated. | Issued: November 30, 2024 Effective Date: January 14, 2025 |
| Contractor Tax | |||
| 4 | General Department of Taxation Official Letter No. 5887/TCT-KK/2024 on Tax Registration for Foreign Subcontractors. | Where a foreign contractor maintains a representative office in Vietnam and has been assigned a tax identification number (TIN) for direct tax declaration and payment of contractor withholding tax (CWT) to the Vietnamese tax authorities, that representative office is considered the Vietnamese party responsible for declaring and remitting taxes on behalf of its foreign subcontractors, as stipulated in Clause 2, Article 4 of Circular 103/2014/TT-BTC. Consequently, such representative offices must register for tax purposes in accordance with Point g, Clause 2, Article 4; Point e, Clause 3, Article 5; and Point a, Clause 6, Article 7 of Circular 105/2020/TT-BTC to fulfill their tax obligations as withholding agents for foreign subcontractors. | December 13, 2024 |
| 5 | Binh Duong Provincial Tax Department Official Letter No. 31786/CTBDU-TTHT regarding Foreign Contractor Tax. | Where a company contracts with a foreign entity for the supply of machinery and equipment, the foreign entity is liable for Foreign Contractor Tax (FCT) on income sourced in Vietnam. If the foreign contractor does not satisfy any of the requirements for direct tax filing in Vietnam as outlined in Article 8 of Circular 103/2014/TT-BTC, the Vietnamese company making the payment is responsible for calculating Value Added Tax (VAT) and Corporate Income Tax (CIT) in accordance with Articles 12 and 13 of the same Circular. The company must also file tax returns as stipulated in Point n, Clause 4, Article 8 of Decree 126/2020/ND-CP and withhold and remit taxes on behalf of the foreign contractor pursuant to Clause 1, Article 55 of the Law on Tax Administration No. 38/2019/QH14. Tax return filing deadline: As provided in Clause 3, Article 44 of the Law on Tax Administration No. 38/2019/QH14. | December 18, 2024 |
| Tax filing for an out-of-province branch | |||
| 6 | Official Letter No. 8783/CTDAN-TTHT of Da Nang City Tax Department regarding tax declaration of branches located in provinces other than the head office. | - VAT: If the Branch is a dependent unit of an export processing enterprise (EPE) and does not engage in the production or trading of VAT-liable goods or services in Vietnam, it is not a VAT taxpayer as guided in Article 3 of Circular No. 219/2013/TT-BTC. Therefore, it is not required to submit VAT returns as stipulated in Point a, Clause 3, Article 7 of Decree No. 126/2020/ND-CP. - CIT: Based on the documents provided by the Branch, it is not evident that the Branch has sufficient documents to meet the conditions for preferential CIT rates as stipulated in Article 15 of Decree No. 218/2013/ND-CP of the Government. Therefore, if the Branch is a production facility, the Company (head office) is responsible for declaring, calculating, allocating, and paying CIT as guided in Article 17 of Circular No. 80/2021/TT-BTC. - PIT: If the salaries and wages of employees working at the Branch are paid by the Company (head office), the Branch is not required to file PIT returns. The Company is responsible for withholding PIT on income from salaries and wages as prescribed and submitting tax returns according to Form No. 05/KK-TNCN, Appendix on determining the PIT payable to localities benefiting from revenue sources according to Form 05-1/PBT-KK-NCN issued together with Appendix II of Circular No. 80/2021/TT-BTC to the tax authority directly managing the Company (head office); paying PIT on income from salaries and wages to the state budget for each locality where the employees work as stipulated in Clause 4, Article 12 and Point a.1, Clause 3, Article 19 of Circular No. 80/2021/TT-BTC. | November 15, 2024 |
| Tax treatment of travel allowances/expenses | |||
| 7 | Official Letter No. 5908/CTCTH-TTHT of Can Tho Provincial Tax Department on Tax Policy Guidance. | - Corporate Income Tax (CIT): Lump-sum business travel expenses and expense support related to production and business activities are deductible expenses when calculating CIT and are not subject to the percentage cap as stipulated in Clause 4, Article 1 of Law No. 71/2014/QH13 if they meet the conditions in Article 4 of Circular 96/2015/TT-BTC, Point b, Item 2.5, Clause 2, Article 6 (amended by Clause 2, Article 3 of Circular No. 25/2018/TT-BTC dated March 16, 2018) of Circular No. 78/2014/TT-BTC, and Clause 4, Article 3 of Circular No. 25/2018/TT-BTC. - Personal Income Tax (PIT): Business travel expenses for employees on actual business trips that comply with the regulations at Point d.4, Clause 2, Article 2 of Circular 111/2013/TT-BTC and are not subject to the provisions at Point b, Item 2.5, Clause 2, Article 6 of Circular No. 78/2014/TT-BTC are not included in the employee's PIT taxable income. | December 16, 2024 |
| Tax point | |||
| 8 | Official Letter No. 2795/CCT-NV of Phu Yen Provincial Tax Department on the Time of VAT Determination and Revenue for Corporate Income Tax Calculation. | - The time of VAT determination is the time of completion of service provision or the issuance of a service provision invoice, regardless of whether payment has been received. - The time of revenue determination for CIT calculation is the time of completion of service provision or the completion of each part of the service provision for the buyer. | December 10, 2024 |
| Correction of input VAT deduction | |||
| 9 | Official Letter No. 4289/CCTTP-TTTBTK of Binh Dinh Provincial Tax Department on Adjusting Previously Deducted Input Value Added Tax (VAT). | In cases where the Company has declared and deducted input VAT, and now needs to adjust the previously deducted input VAT downwards, resulting in a decrease in the remaining deductible VAT carried forward to the next period, the adjustment must be declared in the current tax period on line 37 of the VAT return. | December 20, 2024 |
| Value Added Tax (VAT) on goods exported to foreign traders | |||
| 10 | Official Letter No. 6007/TCT-CS of the General Department of Taxation on Value Added Tax (VAT) Policy. | If a "foreign trader has a presence in Vietnam," goods from a domestic enterprise (Vietnamese enterprise) exported to the foreign trader and delivered in Vietnam as designated by the foreign trader are not considered on-the-spot exports as stipulated in Point e, Clause 1, Article 35 of Decree No. 08/2015/ND-CP, and are not subject to the 0% VAT rate. In cases where a domestic enterprise delivers goods to an export processing enterprise as designated by a foreign trader, the Tax Department is requested to determine compliance with contract conditions and bank payment documents for the application of the 0% VAT rate as prescribed. | December 17, 2024 |
| Personal Income Tax (PIT) | |||
| 11 | Official Letter No. 6068/TCT-DNNCN of the General Department of Taxation on Personal Income Tax (PIT) Policy. | In cases where the personal relief for dependents has not been calculated for the father-in-law and mother-in-law in the 2023 tax year, the relief for dependents can be calculated from the month the nurturing obligation arises when the individual performs tax finalization and has registered for the deduction. | December 18, 2024 |
| Provision for bad debts and debt write-off/recovery | |||
| 12 | Official Letter No. 31787/CTBDU-TTHT of Binh Duong Provincial Tax Department on deductible expenses when making provisions for and handling bad debts. | In cases where the Company incurs receivables that are overdue for payment and receivables that are not yet due but are likely uncollectible on time, and simultaneously meet the conditions specified in Point a, Clause 1, Article 6 of Circular No. 48/2019/TT-BTC dated August 8, 2019, of the Ministry of Finance, the Company is entitled to make provisions for bad debts as prescribed in Clause 2, Article 6 of Circular No. 48/2019/TT-BTC and to handle the financial treatment for uncollectible receivables as prescribed in Clause 4, Article 6 of Circular No. 48/2019/TT-BTC as mentioned above. The amount of provision, setting up, and use of provisions for bad debts in accordance with the above instructions is included in deductible expenses when calculating corporate income tax (CIT) if the conditions specified in Article 4 of Circular No. 96/2015/TT-BTC dated June 22, 2015, of the Ministry of Finance are met. | December 18, 2024 |
| Tax treatment of obsolete/damaged/expired inventory | |||
| 13 | Official Letter No. 31789/CTBDU-TTHT of Binh Duong Provincial Tax Department on tax policies for destroyed inventory. | Based on the above regulations, if the Company has inventory damaged due to natural biochemical changes or expired goods that must be destroyed, then: Regarding VAT: Input VAT of VAT-liable goods that are lost (due to damage) and not compensated is deductible if the deduction conditions are met as guided in Clause 10, Article 1 of Circular 26/2015/TT-BTC. The Company must have complete records and documents proving the cases of losses that are not compensated for tax deduction as prescribed in Clause 1, Article 14 of Circular 219/2013/TT-BTC as mentioned above. Regarding CIT: Goods damaged due to natural biochemical changes or expired goods that are not compensated are included in deductible expenses when determining taxable corporate income as prescribed in Point 2.1, Clause 2, Article 4 of Circular 96/2015/TT-BTC. | December 18, 2024 |
Newly issued laws and resolutions
Issued: November 26, 2024 – Effective Date: July 1, 2025: National Assembly’s Law on Value Added Tax, No. 48/2024/QH15
Key Amendments:
– Non-cash payment documentation is required for goods and services valued at under VND 20 million.
– The revenue threshold for Value Added Tax (VAT) and Personal Income Tax (PIT) liability has been raised to VND 200 million.
Issued on November 29, 2024 – Effective from January 1, 2025: Law No. 56/2024/QH15 Amending and Supplementing Several Articles of Various Laws (including the Law on Securities, the Law on Accounting, the Law on Independent Auditing, the Law on the State Budget, the Law on Management and Use of Public Assets, the Law on Tax Administration, the Law on Personal Income Tax, the Law on National Reserves, and the Law on Handling Administrative Violations)
Some noteworthy new points:
– Foreign e-commerce platforms must register and declare taxes in Vietnam, and pay taxes on behalf of individuals and household businesses.
– It is not allowed to supplement tax declarations when there is a tax inspection or examination decision…
Issued: November 30, 2024 – Effective Date: January 14, 2025: National Assembly Resolution No. 174/2024/QH15 (8th Session, 15th National Assembly)
– Extends the 2% reduction in Value Added Tax (VAT) rates for eligible goods and services as stipulated in Point a, Clause 1.1, Article 3 of National Assembly Resolution No. 43/2022/QH15 on fiscal and monetary policies supporting the socio-economic recovery and development program from January 1, 2025, to June 30, 2025.
– Commencing January 14, 2025, the tax exemption for low-value imported goods shipped via express delivery will be terminated.
Contractor Tax
December 13, 2024: General Department of Taxation Official Letter No. 5887/TCT-KK/2024 on Tax Registration for Foreign Subcontractors.
Where a foreign contractor maintains a representative office in Vietnam and has been assigned a tax identification number (TIN) for direct tax declaration and payment of contractor withholding tax (CWT) to the Vietnamese tax authorities, that representative office is considered the Vietnamese party responsible for declaring and remitting taxes on behalf of its foreign subcontractors, as stipulated in Clause 2, Article 4 of Circular 103/2014/TT-BTC. Consequently, such representative offices must register for tax purposes in accordance with Point g, Clause 2, Article 4; Point e, Clause 3, Article 5; and Point a, Clause 6, Article 7 of Circular 105/2020/TT-BTC to fulfill their tax obligations as withholding agents for foreign subcontractors.
December 18, 2024: Binh Duong Provincial Tax Department Official Letter No. 31786/CTBDU-TTHT regarding Foreign Contractor Tax.
Where a company contracts with a foreign entity for the supply of machinery and equipment, the foreign entity is liable for Foreign Contractor Tax (FCT) on income sourced in Vietnam. If the foreign contractor does not satisfy any of the requirements for direct tax filing in Vietnam as outlined in Article 8 of Circular 103/2014/TT-BTC, the Vietnamese company making the payment is responsible for calculating Value Added Tax (VAT) and Corporate Income Tax (CIT) in accordance with Articles 12 and 13 of the same Circular. The company must also file tax returns as stipulated in Point n, Clause 4, Article 8 of Decree 126/2020/ND-CP and withhold and remit taxes on behalf of the foreign contractor pursuant to Clause 1, Article 55 of the Law on Tax Administration No. 38/2019/QH14. Tax return filing deadline: As provided in Clause 3, Article 44 of the Law on Tax Administration No. 38/2019/QH14.
Tax filing for an out-of-province branch
November 15, 2024: Official Letter No. 8783/CTDAN-TTHT of Da Nang City Tax Department regarding tax declaration of branches located in provinces other than the head office.
– VAT: If the Branch is a dependent unit of an export processing enterprise (EPE) and does not engage in the production or trading of VAT-liable goods or services in Vietnam, it is not a VAT taxpayer as guided in Article 3 of Circular No. 219/2013/TT-BTC. Therefore, it is not required to submit VAT returns as stipulated in Point a, Clause 3, Article 7 of Decree No. 126/2020/ND-CP.
– CIT: Based on the documents provided by the Branch, it is not evident that the Branch has sufficient documents to meet the conditions for preferential CIT rates as stipulated in Article 15 of Decree No. 218/2013/ND-CP of the Government. Therefore, if the Branch is a production facility, the Company (head office) is responsible for declaring, calculating, allocating, and paying CIT as guided in Article 17 of Circular No. 80/2021/TT-BTC.
– PIT: If the salaries and wages of employees working at the Branch are paid by the Company (head office), the Branch is not required to file PIT returns. The Company is responsible for withholding PIT on income from salaries and wages as prescribed and submitting tax returns according to Form No. 05/KK-TNCN, Appendix on determining the PIT payable to localities benefiting from revenue sources according to Form 05-1/PBT-KK-NCN issued together with Appendix II of Circular No. 80/2021/TT-BTC to the tax authority directly managing the Company (head office); paying PIT on income from salaries and wages to the state budget for each locality where the employees work as stipulated in Clause 4, Article 12 and Point a.1, Clause 3, Article 19 of Circular No. 80/2021/TT-BTC.
Tax treatment of travel allowances/expenses
December 16, 2024: Official Letter No. 5908/CTCTH-TTHT of Can Tho Provincial Tax Department on Tax Policy Guidance.
– Corporate Income Tax (CIT): Lump-sum business travel expenses and expense support related to production and business activities are deductible expenses when calculating CIT and are not subject to the percentage cap as stipulated in Clause 4, Article 1 of Law No. 71/2014/QH13 if they meet the conditions in Article 4 of Circular 96/2015/TT-BTC, Point b, Item 2.5, Clause 2, Article 6 (amended by Clause 2, Article 3 of Circular No. 25/2018/TT-BTC dated March 16, 2018) of Circular No. 78/2014/TT-BTC, and Clause 4, Article 3 of Circular No. 25/2018/TT-BTC.
– Personal Income Tax (PIT): Business travel expenses for employees on actual business trips that comply with the regulations at Point d.4, Clause 2, Article 2 of Circular 111/2013/TT-BTC and are not subject to the provisions at Point b, Item 2.5, Clause 2, Article 6 of Circular No. 78/2014/TT-BTC are not included in the employee’s PIT taxable income.
Tax point
December 10, 2024: Official Letter No. 2795/CCT-NV of Phu Yen Provincial Tax Department on the Time of VAT Determination and Revenue for Corporate Income Tax Calculation.
– The time of VAT determination is the time of completion of service provision or the issuance of a service provision invoice, regardless of whether payment has been received.
– The time of revenue determination for CIT calculation is the time of completion of service provision or the completion of each part of the service provision for the buyer.
Correction of input VAT deduction
December 20, 2024: Official Letter No. 4289/CCTTP-TTTBTK of Binh Dinh Provincial Tax Department on Adjusting Previously Deducted Input Value Added Tax (VAT).
In cases where the Company has declared and deducted input VAT, and now needs to adjust the previously deducted input VAT downwards, resulting in a decrease in the remaining deductible VAT carried forward to the next period, the adjustment must be declared in the current tax period on line 37 of the VAT return.
Value Added Tax (VAT) on goods exported to foreign traders
December 17, 2024: Official Letter No. 6007/TCT-CS of the General Department of Taxation on Value Added Tax (VAT) Policy.
If a “foreign trader has a presence in Vietnam,” goods from a domestic enterprise (Vietnamese enterprise) exported to the foreign trader and delivered in Vietnam as designated by the foreign trader are not considered on-the-spot exports as stipulated in Point e, Clause 1, Article 35 of Decree No. 08/2015/ND-CP, and are not subject to the 0% VAT rate. In cases where a domestic enterprise delivers goods to an export processing enterprise as designated by a foreign trader, the Tax Department is requested to determine compliance with contract conditions and bank payment documents for the application of the 0% VAT rate as prescribed.
Personal Income Tax (PIT)
December 18, 2024: Official Letter No. 6068/TCT-DNNCN of the General Department of Taxation on Personal Income Tax (PIT) Policy.
In cases where the personal relief for dependents has not been calculated for the father-in-law and mother-in-law in the 2023 tax year, the relief for dependents can be calculated from the month the nurturing obligation arises when the individual performs tax finalization and has registered for the deduction.
Provision for bad debts and debt write-off/recovery
December 18, 2024: Official Letter No. 31787/CTBDU-TTHT of Binh Duong Provincial Tax Department on deductible expenses when making provisions for and handling bad debts.
In cases where the Company incurs receivables that are overdue for payment and receivables that are not yet due but are likely uncollectible on time, and simultaneously meet the conditions specified in Point a, Clause 1, Article 6 of Circular No. 48/2019/TT-BTC dated August 8, 2019, of the Ministry of Finance, the Company is entitled to make provisions for bad debts as prescribed in Clause 2, Article 6 of Circular No. 48/2019/TT-BTC and to handle the financial treatment for uncollectible receivables as prescribed in Clause 4, Article 6 of Circular No. 48/2019/TT-BTC as mentioned above. The amount of provision, setting up, and use of provisions for bad debts in accordance with the above instructions is included in deductible expenses when calculating corporate income tax (CIT) if the conditions specified in Article 4 of Circular No. 96/2015/TT-BTC dated June 22, 2015, of the Ministry of Finance are met.
Tax treatment of obsolete/damaged/expired inventory
December 18, 2024: Official Letter No. 31789/CTBDU-TTHT of Binh Duong Provincial Tax Department on tax policies for destroyed inventory.
Based on the above regulations, if the Company has inventory damaged due to natural biochemical changes or expired goods that must be destroyed, then:
Regarding VAT: Input VAT of VAT-liable goods that are lost (due to damage) and not compensated is deductible if the deduction conditions are met as guided in Clause 10, Article 1 of Circular 26/2015/TT-BTC. The Company must have complete records and documents proving the cases of losses that are not compensated for tax deduction as prescribed in Clause 1, Article 14 of Circular 219/2013/TT-BTC as mentioned above.
Regarding CIT: Goods damaged due to natural biochemical changes or expired goods that are not compensated are included in deductible expenses when determining taxable corporate income as prescribed in Point 2.1, Clause 2, Article 4 of Circular 96/2015/TT-BTC.