Tax UpdatesTax Updates From Domicile Corporate Services



This Tax Update publication for February 2017 looks at a selection of Decrees and Official Letters which have been released recently, providing guidance in the often confusing realm of Vietnamese taxation. As always, please contact us if you would like further information on any of the items discussed in our publication.


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The Vietnam Government released Decree 174/2016/ND-CP (“Decree 174”) on 30 December 2016 guiding accounting regulations for enterprises operating in Vietnam.


In this Decree, changes have been made to the 2015 Law on Accounting to give clearer guidance to Vietnam Companies, in particular:


- Enterprises can now proactively prepare and designate internal accounting documents, i.e. payment vouchers, cash advance forms, merchandise forms etc. (provided they include sufficient information), which are more appropriate and better match the activities and management of the business. Prior to this provision, enterprises were only permitted to prepare those documents which were not prescribed in the Accounting Law.


- Enterprises which use e-documents in their accounting records can utilise e-signatures on those document as well;


- Accounting supporting documents that are presented in foreign languages are required to be translated into Vietnamese for accounting records;


- Accounting supporting documents which are not directly used for accounting records are required to be filed and kept for 5 years. In contrast, those which are directly used for accounting purpose are required to be filed and retained for 10 years;


This Decree takes effective from 1 January 2017 and replaces Decree 128/2004/ND-CP & Decree 129/2004/ND-CP.





Commercial Invoices

On 5 January 2017, the General Department of Taxation (“GDT”) released Official Letter 37/TCT-CS concerning invoice issuance for loan interest collection.


In this letter, the tax authorities confirm that an enterprise is responsible for preparing and issuing invoices for each loan interest receipt of VND 200,000 and above.


Where the interest received is under VND 200,000, an invoice is not required, nevertheless, the enterprise is to prepare a list of recipients (i.e. name, loan code, loan amount, interest paid etc.) together with an invoice issued at the end of working day, showing the total interest received during a day which corresponds to the total from the list of recipients.


Value-Added Tax (“VAT”)

On 16 January 2017, The Ministry of Finance (“MoF”) published OL 610/BTC-CST relating to applicable VAT rate on the provision of transportation services to enterprises (“EPEs”) which are located in Export Processing Zone (“EPZ”).


According to this letter, transportation services, except for picking up/dropping off employees from/to working sites, provided to enterprises situated inside an EPZ are entitled to 0% VAT. Such activities are treated as exported services and subject to a VAT of 0%.


Essentially, certain documents i.e. services contracts with the enterprises, valid payment vouchers for the transportation services and additional relevant dossiers are required to be available in order to apply the 0% rate.


Value-Added Tax (“VAT”)

On 17 January 2017, GDT released OL 208/TCT-DNL concerning VAT declaration and invoice issuance relating to transportation supporting payments received by agencies from suppliers.


Where agencies receive transportation support payments from suppliers in order to provide services to such companies or organizations(i.e. advertising, a trade promotion for boosting sales), these activities are considered as conditional supporting activities, hence it is required for agencies to prepare invoices and VAT declarations for those supporting payments.


Value-Added Tax (“VAT”)

On 18 January 2017, GDT released OL 224/TCT-CS providing guidance on applicable VAT rate relating to infrastructure leasing activities to EPEs in EPZ.


This OL reconfirms that infrastructure leasing activities, along with accompanied services, to EPEs are subject to 0% VAT provided that required and relevant documents are maintained in the company’s office for inspection.


Value-Added Tax (“VAT”)

On 6 February 2017, GDT issued OL 373/TCT-KK concerning VAT refunds. This letter is aim to clarify guidance from former OL 10315/BTC-TCT dated 25 July 2016 & OL 13804/BTC-TCT dated 30 September 2016. This OL details the rejection of VAT refunds in a certain circumstance, in particular when the enterprises have creditable VAT in June 2016 (monthly VAT declaration) or in Quarter 2/2016 (quarterly VAT declaration) but carry forward claims to July 2016 or quarter 3/2016 instead of applying for VAT refunds. Tax payers are not permitted here to apply for VAT refunds respectively.


Corporate Income Tax (“CIT”)

On 16 January 2017, GDT issued OL 180/TCT-CS guiding the tax treatment on vehicle insurance expenses for employees paid by employers.


Further to this guidance, such expenditures are to be treated as “staff welfare costs” and will be creditable for VAT & deductible for CIT, subject to a cap of one month’s average salary, and the payments need to be supported with appropriate documents i.e. valid payment vouchers, labour contracts and/or internal policy with staff benefits clearly mentioned, along with other additional relevant documents.


The OL is silent on Personal Income Tax (“PIT”) obligations on employee’s benefits received, so taxpayers may wish to seek further clarification, with their local tax authority.


Personal Income Tax (“PIT”)

On 16 January 2017, GDT issued OL 180/TCT-CS guiding the tax treatment on vehicle insurance expenses for employees paid by employers.


On 23 January 2017, GDT released OL 281/TCT-TNCN guiding PIT treatment on additional incentives paid by employers to employees to encourage employee productivity. Further to this guidance, such incentives are considered as “other benefits” and included in taxable income for PIT calculations. This expenditure is deductible for CIT, provided that supporting documents are available and maintained.



For further information contact:


Matthew Lourey, Partner

email: This email address is being protected from spambots. You need JavaScript enabled to view it.


Phan Thi Thu Thuy, Manager

email: This email address is being protected from spambots. You need JavaScript enabled to view it.



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