Legal update on January 2022 (Part 3)

BLawyers Vietnam - Legal update

Our Vietnam Legal Update #197 would lead you on 04 legal issues:

I. Value-added tax policy in merger and separation of companies

The Tax Department of Hung Yen province has issued Official Letter No. 6746/CTHYE-TTHT dated 28 December 2021 to guide the value-added tax (“VAT”) policy in the merger and separation of companies. The main content is as follows:

  • In case of separation of a company that pays VAT by the tax credit method:

When a company is separated, but the VAT amount has not been fully deducted, such company can request a tax refund in accordance with the law or transfer the VAT amount that has not yet been fully deducted to the new company for deduction declaration. The amount of VAT that has not yet been deducted is divided in the proportion corresponding to the value of assets transferred to the new company.

  • In case of company merger:

When merging a company that has a project that is in the investment stage and the VAT amount has not been fully deducted, that company can request a tax refund in accordance with the law or transfer the deductible VAT part to the company that receives the merger to continue declaring deductions.

II. Expenses deductible when calculating corporate income tax and personal income tax with the payment of unpaid leave days for employees

On 4 January 2022, the Tax Department of Bac Ninh province issued Official Letter No. 05/CTBNI-TTHT to guide the deductible expenses when calculating corporate income tax (“CIT”) and personal income tax (“PIT”) with the payment of unpaid leave days for employees. The main content is as follows:

  • According to the law, the payment of unpaid leave days for employees is only regulated in case the employees resign or lose their jobs. Therefore, in case the employee is still working, this expense is not considered as salary and bonus payments that are eligible to be included in deductible expenses when calculating CIT.
  • In case the employee is still working for the employer, the payment of unpaid leave days is considered as a benefit paid by the employer that the employee is entitled to and such payments are included in the employee’s taxable income.

III. The management of petroleum business

On 11 January 2022, the Ministry of Industry and Trade issued Official Letter No. 162/BCT-TTTN on the management of petroleum business with the following main contents:

Facing the recent developments in the price of petroleum products in the world, along with the management of petrol and oil prices according to the market mechanism under the management of the State, the Ministry of Industry and Trade and the Ministry of Finance decided:

  • Petroleum Price Stabilization Fund

Deduction for setting up petrol price stabilization fund

Gasoline E5RON92

 

100 VND/liter
Gasoline RON95

 

450 VND/liter
Diesel oil

 

100 VND/liter
Kerosene

 

300 VND/liter
Fuel oil

 

300 VND/liter

Only use the Petroleum Price Stabilization Fund

Gasoline E5RON92

 

0 VND/liter
Gasoline RON95

 

0 VND/liter
Diesel oil

 

0 VND/liter
Kerosene

 

0 VND/liter
Fuel oil

 

0 VND/liter
  • The selling price of petrol

After deducting for setting up, contributing to the above-mentioned Petroleum Price Stabilization Fund, the selling price of common consumer petroleum products on the market is not higher than the price:

    • E5RON92 gasoline: not higher than 23,159 VND/liter;
    • RON95 -III gasoline: not higher than 23,876 VND/liter;
    • Diesel oil: not higher than 18,239 VND/liter;
    • Kerosene: not higher than 17,138 VND/liter; and
    • Fuel oil 180CST3.5S: not higher than 16,362 VND/liter.

IV. Calculating PIT for foreigners

The Tax Department of Hung Yen Province issued Official Letter No. 6566/CTHYE-TTHT dated 23 December 2021 to respond to the enterprise’s letter on guiding the PIT calculation period for foreigners with the following content:

According to the guidance in Article 1.1 of Circular 111/2013/TT-BTC, in the case of tax period 2020 (from 01 January 2020 to 31 December 2020), the foreign experts who are present in Vietnam under 183 days and has no permanent residence in Vietnam, in the tax year 2020, shall be considered as a non-resident individual in Vietnam. Therefore, for the taxable income from salaries and wages, PIT must be declared and paid at the rate of 20% and no finalization is required. The next tax period is determined from 01 January 2021 to the end of 31 December 2021.

For down-loading: 

Legal Update #197 (EN version)

Maybe you are interested in reading other Legal Update of BLawyers Vietnam: January 2022 (Part 2)January 2022 (Part 1) | December 2021 (Part 5) | December 2021 (Part 4) | December 2021 (Part 3) | December 2021 (Part 2) | December 2021 (Part 1) | November 2021 (Part 4) | November 2021 (Part 3) | November 2021 (Part 2) | November 2021 (Part 1) 

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