Our Vietnam Legal Update #191 would lead you on 04 legal issues:
I. Guidance on the classification of certain goods
The General Department of Customs issued the Official Letter No. 5486/TCHQ-TXNK dated 22 November 2021 to guide the classification of fish oil products, health foods/omega-3 vitamin supplements; health foods/EPA-DHA supplement, etc. Contents of the guidance are as follows:
- The classification of goods is based on factors of composition, content, level of processing, and production process.
- In case of the fish oil goods being whether or not refined but not chemically changed, these goods which usually have a characteristic of fishy smell, have an unpleasant taste, and have a color that changes from yellow to reddish-brown, they belong to Group 15.04.
- In case of hydrogenated goods being conjugated, re-esterified, re-esterified, or eledinized fish oil, whether or not refined, but not further processed, these goods belong to Group 15.16.
- In case fish oil goods are whether or not hydrogenated but having been processed by emulsification, kneading, texture modification, etc. or the good is determined to be mixtures/edible products from fish oil and other animals or plants oil, they belong to Group 15.17.
- In the case of goods are mixtures of ethyl esters that are produced from fish oil by completely replacing the glycerin base with an ethyl base, the goods belong to Group 21.06.
- The above items may contain added gelatin which acts as the capsule shell and may have vitamin E added as an antioxidant, provided these additions do not alter the nature of the fish oil and fish oil mixture.
II. Reduction of 30% of the VAT rate
Hai Phong City Tax Department issued the Official Letter No. 3075/CTHPH-TTHT dated 26 November 2021 to guide the reduction of 30% of VAT rate with the following contents:
- Goods and services eligible for VAT reduction from 01 November 2021 to the end of 31 December 2021 include: Transportation services (railway transport, water transport, air transport, other road transport); Food Service; Services of travel agencies, tour operators, and support services, related to the promotion and organization of tours.
- The VAT reduction for the above-mentioned goods and services is 30% of the VAT rate.
- For the case of VAT reduction, when making VAT invoices providing goods and services subject to VAT reduction, the line of VAT rate with being inserted with “the prescribed tax rate (5% or 10%) x 70%”.
III. Amendments, supplements some guidance on VAT, PIT, and tax management for business households and individuals
The Ministry of Finance has issued Circular No. 100/2021/TT-BTC dated 15 November 2021 to amend and supplement several articles of Circular No. 40/2021/TT-BTC that guide VAT, PIT, and tax management for business households, and individuals. Some notable contents are as follows:
- Amending regulations on two cases where organizations and individuals declare tax and pay taxes on behalf of individuals (points dd and e, Clause 1, Article 8 of Circular No. 40/2021/TT-BTC):
- Organizations, including the owner of the E-commerce Exchange shall make tax declarations on behalf of individuals, and pay taxes on behalf of individuals on the basis of authorization;
- Individuals who declare tax on behalf of other individuals are taxpayers on the basis of authorization.
- Amendment of regulations on tax calculation methods in special cases: Individuals who only have property-leasing activities and the leasing period is not a full year, if the leasing revenue is VND100 million/year or less, are not subject to VAT and PIT. In case the lessee pays renting fees in advance for many years, the revenue to determine whether an individual must pay tax or not is the one-time payment amortized according to the calendar year.
- Supplementing regulations on responsibilities of the Tax Department: In case the organization that is the owner of the E-commerce Exchange does not declare tax, pay tax on behalf of individuals having business on the E-commerce Exchange on the basis of authorization, the Tax Department shall cooperate with the E-commerce Exchange in sharing and providing information of these individuals.
IV. Expenses to support and compensate customers
Binh Duong Province Tax Department issued the Official Letter No. 11480/CTHDU-TTHT dated 29 November 2021 with the following contents:
- In case the enterprise provides freight support for customers and money support for distributors to bring goods to the construction site, and these support amounts are accompanied by conditions (repair, warranty, promotion, advertising, etc.) stated in the contract in order to promote the consumption of the enterprise’s products, when receiving the support amount, the customer makes a VAT invoice for the business and must declare and pay VAT according to the laws.
- For the support amount without conditions, it is not required to declare, calculate and pay VAT. When customers receive this support amount, they must prepare receipts according to the laws. Enterprises shall base on spending purposes to make payment receipts.
- In case the enterprise has monetary compensation for damage to customers, this compensation amount is not subject to VAT declaration and calculation according to the laws. When customers receive this support amount, they must prepare receipts according to the laws. Enterprises based on spending purposes to make payment receipts.
Maybe you are interested in reading other Legal Update of BLawyers Vietnam: December 2021 (Part 1) | November 2021 (Part 4) | November 2021 (Part 3) | November 2021 (Part 2) | November 2021 (Part 1) | October 2021 (Part 5) | October 2021 (Part 4) | October 2021 (Part 3) | October 2021 (Part 2) | October 2021 (Part 1) | September 2021 (Part 4)