Monthly Newsletter October, 2019

Dossiers for personal income tax refund of income payer.

On July 16th, 2019, General Department of Taxation has issued Official Letter No. 2813/TCT-DNNCN clarifying the entanglements of Thua Thien Hue Tax Department about dossiers for personal income tax (“PIT”) refund of income payer. Accordingly,

In case the income payer paid personal income tax by electronic method, when PIT refund arises, the income payer shall submit dossiers of request for refund in accordance with Clause 1, Article 23, Circular No. 92/2015/TT-BTC, in which the photocopies of PIT receipts shall be replaced by paper documents converted from electronic documents as prescribed in Article 7, Decree No. 165/2018/ND-CP dated 24/12/2018 issued by Government giving guidelines on electronic transactions in financial activities.

General Department of Taxation noted the entanglements of Thua Thien Hue Tax Department about dossiers for PIT refund of the income payer and then would consider making amendments and supplements appropriate with practice as amending current policies. 

Corporate Income Tax Incentive

On August 02nd, 2019, General Department of Taxation has issued Official Letter No. 3042/TCT-CS giving guidelines on corporate income tax (“CIT”) incentives with content as follow:

In principle, for enterprises having investment projects eligible for CIT incentives for being located in geographical areas eligible for investment incentives, income eligible for CIT incentives are all incomes from their production and business activities in such geographical areas, except for incomes not applied to CIT incentives in accordance with Law on corporate income tax (namely income from transfer of investment projects, real estate transfer, exploration of rare natural resources, or production and trading of goods and services which are subject to excise Tax).

In case, Operating enterprises that enjoy tax incentives and adding production and business lines and enterprises do not increase capital, or make expansion investment to increase their assets, then incomes from additional commercial activities shall not be applied to CIT incentives.

Bank transfer receipts for exported goods and services

On August 22nd, 2019, General Department of Taxation has issued Official Letter No. 3352/TCT-KK about bank transfer receipts for deducting and refunding input value-added tax (VAT) on exported goods and services.

Accordingly, in case foreign customer made a payment for exported goods and services to Vietnamese entity via bank transfer in form of Letter of Credit (L/C), but in reality bank transfer receipts illustrated that foreign bank account for remittance payment was not bank account of foreign customer or third party being organization or individual in foreign countries that made payment under the authorization of foreign customer stipulated in the export contract (or the contract appendix or amendment- if any) in accordance with Point b.3, Clause 3, Article 16, Circular No. 219/2013/TT-BTC, then such bank transfer receipts shall fail to satisfy conditions for deducting and refunding input VAT on exported goods and services.