Our Vietnam legal update #151 would lead you on 03 legal issues:
I. PIT and CIT policies for retirement expenses contributed by enterprise for employees sent to Vietnam by overseas parent company
Tax Department of Hanoi issued Official Letter No. 3619/CTHN-TTHT dated 28 January 2021 on the PIT and CIT policies for retirement expenses contributed by enterprises for employees sent to Vietnam by overseas parent company with the following contents:
- The amount that enterprise contributes to the Voluntary Pension Fund for employees is defined as taxable income from individual salaries and wages. The contribution to such fund is deducted from the income subject to PIT.
- In case the overseas parent company assigns employees to work in Vietnam, the written agreement between the overseas parent company and the company in Vietnam states that the Vietnamese company must pay for contributing to the Corporate Pension Fund for these employees during their time in Vietnam, the above-mentioned payment will be included in deductible expenses when determining taxable income of CIT satisfying conditions.
- In case the overseas parent company arises income from the agreement on assignment of employees to work in Vietnam, the income received by the parent company must be declared and paid according to regulations. If the parent company is a foreign contractor that does not meet one of the tax payment conditions according to the declaration method, the company in Vietnam shall pay tax on behalf of the foreign contractor according to regulations.
II. Origin on exported goods declaration
On 18 February 2021, the General Department of Customs issued Official Letter No. 1523/BTC-TCHQ on the declaration of origin on the exported goods (“EG”) declaration with the following contents:
- EG that satisfy the origin criteria of Vietnam according to the regulations on origin of goods under free trade agreements, in the box “description of the goods” on the export declaration (“ED”), the customs declarant may make a declaration of made in Viet Nam. Declaration of the country code of the EG is according to the rule: description of goods#&VN.
- In case the EG are only sourced, assembled or processed in Vietnam, and do not meet the origin criteria, the declarant is not allowed to declare the origin of Vietnam. In the box “description of goods” on the ED, the customs declarant declares according to the rule: description of goods#&KXĐ.
- In case the EG originating from other countries, not from Vietnam, in the box “description of goods” on the ED, the customs declarant declares according to the rule: description of goods#& (code the country of origin of the goods).
III. Tax declaration and payment in case a bank handles the enterprise’s loan security
Tax Department of An Giang issued Official Letter No. 166/CT-TTHT dated 27 January 2021 answering questions about the tax declaration and payment in case a bank handles loan security of enterprises with the content is as follows:
- Some types of loan security are not subject to VAT under the laws. However, the bank must issue VAT invoices and declare the value of goods and services that are not subject to VAT on the VAT declaration form.
- The bank receiving the value of real estate used as loan security in stead of the performance of secured obligations shall declare and pay tax on the income from real estate transfer into the State Budget when transferring such real estate in accordance with laws.
Maybe you are interested in reading other updates: February 2021 (Part 2) | February 2021 (Part 1) | January 2021 (Part 5) | January 2021 (Part 4) | January 2021 (Part 3) | January 2021 (Part 1) | January 2021 (Part 2)