Page 11 - VSIP-News-QIII-2014

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B. Value Added Tax (“VAT”)
C. Personal Income Tax (“PIT”)
• The sale of mortgaged assets by the borrower as authorised by the lender to settle a guaranteed loan is VAT exempt.
• Companies with prior year annual revenue of VND 50 billion (~USD 2.4 million) or less can declare VAT on a
quarterly basis.
• Accommodation benefit in the form of an employer owned house is exempt from PIT in the following cases:
_ employees working in industrial zones;
_ houses located in economic zones, in regions with difficult or especially difficult socio- economic conditions.
Simplification of tax filing procedures
The Ministry of Finance has now issued Circular 119/2014/TT-BTC (“Circular 119”), dated 26 August 2014, to provide
guidelines to simplify tax procedures. The Circular contains some very welcome changes which should reduce compliance
costs for companies, and also enable the tax authorities to move to a more advanced risk management based approach
in dealing with tax compliance, similar to what we see in other countries. Circular 119 will take effect from 1 September
2014. Some of its notable points include:
1. Changes in Value added tax (“VAT”) and invoicing
Goods or services for internal use will no longer be subject to output VAT, provided that they relate to the business of the
company. Based on an example given in the Circular, if a company which produces bottled water uses such water for its
internal meetings, the company is now no longer required to account for output VAT thereon.
• Goods exported and then re-imported back to Vietnam due to sales returns from overseas customers are no
longer subject to import VAT.
• Commercial invoices will now constitute valid supporting documents for VAT refunds in respect of exported
goods instead of VAT invoices or sales invoices.
VAT invoices are also no longer required for lending or return of machinery, equipment, goods. This helps simpli
ying the administrative procedures.
• A new simplified VAT return will be introduced. Entities can opt to use either the old or the new return and its ap
pendices until 31 October 2014 without registration or notification with tax authorities.
Thereafter the new return should be used.
VAT exempt goods and services are no longer required to be reported in the VAT return by each invoice, but can instead
now be declared together on a lump sum basis