Value added tax - VAT
Providing services to export processing enterprises outside export processing zones is still subject to VAT
On June 22, 2023, Hanoi Tax Department issued Official Dispatch No. 43260/CTHN-TTHT guiding on VAT rates for services provided to export processing enterprises as follows: In case the Company provides repair services for export processing enterprises, but repair services performed and consumed outside the non-tariff area are not subject to the 0% VAT rate as prescribed in Article 9 of Circular No. 219/ 2013/TT-BTC dated December 31, 2013. The company applies the 10% VAT rate as prescribed in Article 11 of Circular No. 219/2013/TT-BTC dated December 31, 2015 of the Ministry of Finance (Official dispatch prepared before Decree 44/2023/ND -CP issued).
The selling price on the VAT invoice of the car must be according to the normal transaction value on the market
On June 26, 2023, the Hanoi Tax Department issued Official Dispatch No. 43781/CTHN-TTHT guiding tax policies on selling prices on invoices as follows: In case the Company has car sales activities, then the purchase, sale, exchange and accounting of the value of goods and services must be according to the normal transaction value on the market as prescribed in Clause 8, Article 14 of Decree No. 126/2020/ND-CP dated October 19 2020 of the Government.
VAT for independent accounting branches
On June 30, 2023, Hanoi Tax Department issued Official Dispatch No. 45056/CTHN-TTHT guiding on tax policy as follows: In case the Company assigns a Branch to be an independent accounting unit to perform a Item numbers and transfer costs to the Branch, the Branch must make invoices, declare and pay taxes according to regulations.
Corporate income tax - CIT
Tax policy for scientific missions
On July 5, 2023, the Hanoi Tax Department issued Official Dispatch No. 47365/CTHN-TTHT guiding tax and invoice policies for scientific tasks as follows: In case of income from performing collection contracts Research, research, and compilation are income from performing scientific research and technology development contracts that ensure the conditions specified in Article 3 of Circular No. 151/2014/TT-BTC, then taxpayers are exempted. Corporate income tax on income from the performance of scientific research and technology development contracts according to the provisions of law on science and technology during the contract implementation period but for a maximum of 03 years from the date began to have revenue from performing scientific research and technology development contracts.
Foreign Contractor Tax - FCT
Foreign contractor tax rate for the purchase and sale of royalties and goods
On July 5, 2023, Hanoi Tax Department issued Official Dispatch No. 47359/CTHN-TTHT providing guidance on tax policies for foreign contractors with the following notable points:
Foreign contractors with income arising in Vietnam from contracts signed with Vietnamese companies to provide goods that are health care products accompanied by copyright services to use products in Vietnam are subject to foreign contractor tax.
– In case the copyright fee value and the goods value can be separated:
+ VAT: The value of goods is only subject to VAT at the import stage according to regulations, the value of services is subject to VAT according to instructions in Article 6 of Circular 103/2014/TT-BTC. If copyright services fall into the cases specified in Clause 21, Article 4 of Circular No. 219/2013/TT-BTC, they are not subject to VAT. If they do not fall into the cases specified in Clause 21, Article 4 of Circular No. 219/2013/TT-BTC, the rate of 5% on taxable revenue for services shall apply as prescribed in Clause 2, Article 12 of Circular No. 103/2014/TT-BTC.
+ CIT: apply a rate of 10% to calculate corporate income tax for income from copyrights as prescribed in Clause 2, Article 13 of Circular No. 103/2014/TT-BTC.
– In case the copyright fee value and goods value cannot be separated:
+ VAT: apply a rate of 3% to calculate the VAT calculation revenue of the contract;
+ CIT: apply a rate of 2% on the contract's corporate income tax revenue.
