Legal update on January 2021 (Part 4)

BLawyers Vietnam - Legal update

Our Vietnam legal update #147 would lead you on 03 legal issues:

I. Tax refunds for borrowed goods temporarily imported for re-export

The General Department of Customs issued Official Letter No. 8115/TCHQ-TXNK dated 28 December 2020 about tax treatment of borrowed goods temporarily imported for re-export with the main following content:

  • In terms of borrowed goods temporarily imported, the customs value is the total amount of expenses paid by the borrower in order to deliver such goods to the first importing checkpoint, suitable with documents related to the borrowed goods according to regulations.
  • The re-export of the above borrowed goods temporarily imported does not fall into statutory cases of tax refunds.

II. CIT incentives for projects that are not in the high-tech sector but are invested in the High-Tech Park

The General Department of Taxation issued Official Letter No. 5608/TCT-CS on tax policy dated 31 December 2020 with the following main contents:

  • Only business according to Law on High Technologies is allowed to invest in High-Tech Park and get tax incentives.
  • In case enterprises are granted to invest in High-Tech Park according to Decree No. 99/2003/ND-CP, if their business is not in the high-tech sector but are invested and operated in the High-Tech Park, those enterprises can get CIT incentives in compliance with the prevailing Law on CIT.

III. Tax policy for income from the foreign contractor’s provision of machinery and equipment with software

Hanoi Tax Department issued Official Letter No.110283 /CT-TTHT dated 28 December 2020 on tax policy for income from the foreign contractor’s provision of machinery and equipment with software with the following main contents:

  • Foreign contractor earns income in Vietnam from providing of machinery and equipment with software based on contracts signed with Vietnamese enterprises subject to tax in accordance with regulations.
  • Taxes applicable to foreign contractors providing machinery and equipment with software: VAT and CIT, ratio calculated on sales is determined as follows:

(i) VAT

      • Computer software is not subject to VAT.
      • Machinery and equipment (not accompanied by services performed in Vietnam), VAT is only paid at the import stage.

(ii) CIT

      • For income from software copyright, the percentage of corporate income tax calculate on revenue subject is 10%.
      • For machinery and equipment (not accompanied by services performed in Vietnam), the percentage of corporate income tax calculate on revenue subject is 1%.

For down-loading: 

Legal Update #147 (EN version)

Maybe you are interested in reading other updates: January 2021 (Part 3) | January 2021 (Part 1) | January 2021 (Part 2)

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