Tax UpdatesTax Updates From Domicile Corporate Services



This edition of our Tax Updates focusses on a range of Official Letters issued by the tax authorities during the month, 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 Tax Updates publications.


Download PDF




The General Department of Taxation (“GDT”) issued Official Letter 2622/TCT-TNCN on 14 June 2016 providing guidance on using exchange rates for converting salaries paid in foreign currencies into VND.


The Official Letter states that where employers pay salaries or other amounts to an employee via foreign currency (ie, a Labour Contract for a foreign employee states that payment is to be made in a specific foreign currency), the applicable exchange rate for converting the payment into VND for Personal Income Tax declaration and payment is the buying exchange rate at the commercial bank where the employer’s bank account is located at the time of the transaction.


This Official Letter appears to have been released to provide an alternate and more logical process to that contained in Circular 92/2015/TT-BTC issued 15 June 2015, which requires the use of the exchange rate at each bank where each employee receives a payment (or the Vietcombank rate, if the employee’s account is not in Vietnam) - which for companies with many foreign employees is problematic.





On 11 May 2016, GDT issued Official Letter 2002/TCT-CS regarding 0% VAT on certain exported services.


Services undertaken by a Vietnamese company that are exported and “consumed” outside of Vietnam are generally entitled to a 0% VAT rate. This Official Letter states that were Vietnamese companies provide customer services, debt monitoring and certain IT services to foreign organisations, these will not be able to access the 0% VAT rate as they do not meet the definition of exported services that are consumed outside of Vietnam.





On 27 May 2016, GDT issued Official Letter 4817/CT-TTHT providing guidance on creditable VAT for house rental expenditure for foreign experts or employees.


Where a foreign individual comes to Vietnam on a definite-term secondment, but continues to be paid directly by the foreign employer - provided that there is written contract between the parties specifying that the Vietnamese side pays for accommodation costs, then the Vietnamese entity will be entitled to creditable VAT on house rental costs.


If the foreign individual receives salary under a signed contract directly from the Vietnamese entity whilst in Vietnam, VAT on house rental costs will be not creditable to the employer, however Corporate Income Tax (“CIT”) deductions will still be available.





On 23 June 2016, the Hanoi Tax Department issued Official Letter 42324/CT-HTr regarding invoice preparation.


Where invoices are prepared with correct information as required by tax laws, however the invoice prints crooked, lop-sided or similarly imperfect, provided the information can be clearly read then the invoice is still permissible for deductibility purposes and there is no requirement to prepare an adjusted invoice.





On 8 June 2016, GDT issued Official Letter 2543/CT-HTr regarding deductible expenditure paid by credit card.


According to this Official Letter, where an enterprise uses credit cards for business operations and guarantees the cards with the issuing bank, then payments using the card are considered as non-cash payments and expenses incurred will be creditable for VAT and deductible for CIT, provided:


(i) On a monthly basis, the company repays the credit card debt based upon the statement from its bank account; and


(ii) The name stated on credit card is a Company Director.


Related expenses such as card issuance fees, maintenance fees, and interest on late payments will be classified as operating expenses for enterprises provided they have sufficient supporting documentation.





On 7 June 2016, GDT issued Official Letter 2510/TCT-CS providing guidance on Foreign Contractor Withholding Tax (“FCWT”) for loan guarantee service payments.


Where a Vietnamese company enters into a loan contract with foreign contractor and incurs guarantee service payments, FCWT for the loan guarantee service payments shall be calculated as:


a) Single Agreement (loan agreement includes service payments) - Payments will be treated as loan interest. Therefore a 5% CIT rate will apply, but no VAT will be applicable (provided that the guarantee payment service is provided by a credit institution or branch of an overseas bank and is in line with the credit and banking regulations).


b) Separate Agreements (loan agreement is separate to the guarantee service agreement) - payments will be treated under regular FCWT service provisions. Therefore 5% CIT and 5% VAT rates will be payable on the service payments.




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.



Search Publications

Contact Info


Please feel free to contact Domicile Corporate Services or visit us using the information below.

Vietnam Offices

Ho Chi Minh City:
Level 9, Abacus Tower
58 Nguyen Dinh Chieu, District 1 

Level 13, Hanoi Towers
49 Hai Ba Trung, Hoan Kiem District

Level 3, Indochina Riverside Tower
74 Bach Dang, Hai Chau District



+84 (0)28 6291 5779 (HCMC)
+84 (0)24 3266 3314 (Hanoi)
+84 (0)236 366 4662 (Danang)

Always Making a Difference

We are always working with our clients to make a difference to their business.

We see successful clients as a measure of our success, and the best source of our own growth.

Contact Us