Summary of Newly-issued Legal Documents (January 6-12, 2006)

An enterprise's fleeing date is the day on which tax body in cooperation with local authority takes the minutes determining that an enterprise has not operated at the registered address. The above enterprise shall be entitled to the input VAT deduction if meeting all the following conditions:

 

-The value of goods or services stated in the VAT invoices is in accordance with signed contracts and legal liquidation vouchers,

-Bought goods were sold and declared for output VAT payment; materials were put into production; goods were in stock,

-Accounting was implemented pursuant to the laws

-VAT invoice must be made before the day on which an enterprise flees

The value of bought goods and services shall be calculated into reasonable expenses for fixing turnover subject to corporate income tax.

An affiliation which is granted with business registration license, financially independent and registers corporate income tax declaration and payment with tax body, if meeting regulated conditions, shall be entitled to the reduction or exemption of corporate income tax pursuant to the regulation on investment in establishment of new business unit. In case an affiliation is not financially independent, it shall be entitled to the reduction or exemption of corporate income tax following the regulation on investment in business expansion or technological renovation. In case an affiliation operates in investment encouraged fields or employs many laborers, it shall be entitled to the higher reduction or exemption rate of corporate income tax.

In case an enterprise compensates households for land loss by gold in order to receive land use right, the compensated money amount shall be calculated into expenses for fixing taxable corporate income tax. For this reason, the compensated value in gold must be converted into Vietnam dong at the time of making transaction. In case an enterprise transfers land use right to other, the compensated value in gold must be converted into Vietnam dong at the price released by Gold and Silver Companies under the State bank of Vietnam at the time of making compensation. The above compensated value must be calculated into expenses when fixing taxable personal income.

In case an individual losing tax signets died or disappeared, the Department of Taxation shall suspend the fine decision of administrative violation on the basis of the minutes determining that an individual is not capable of following the fine on tax signet losing.   The minutes must be notified by the provincial authority at an individual's living area.

 

Fixed assets contributed to enterprises shall be depreciated into reasonable expenses if meeting all the following conditions:

- Being used for business and production

- Being proved by vouchers and other legal documents stating that they are owned by an enterprise

- Being managed followed and calculated in accounting sheets of enterprises in accordance with the current accounting and management system.

In case an individual signed two labor contracts for working in two places and received stable monthly income, he or she has to choose a monthly tax declaration form according to partly progressive tariff at the more income generating or more convenient place. The paying organization has the responsibility to monthly deduct salary for paying personal income tax, issue a receipt to an individual. On which, he or she shall make tax liquidation. An organization paying less income has to deduct 10% of an individual's salary for paying personal income tax and issue deduction voucher.

According to legal documents on VAT and customs procedures, goods exported on the spot if completing all customs procedures and being certified by customs body, shall be applied the VAT rate of 0%. In case goods exported on the spot without customs declaration, they shall not be entitled to the VAT rate of 10%. Buyers shall be entitled to the VAT deduction or exemption.                                           

The added taxable income of an operating enterprise which invests in new production chain, business expansion or technological renovation, environmental improvement, production capability enhancement shall be applied according to the following regulations:

·         In case an investment project is in the same field to its head office, its added income shall be taxable at the same rate. 

·         In case an investment project is in the investment encouraged field or location which is not the same with its head office's ones, preferential tax rate on added income must be fixed base on the project's satisfaction level with the incentive conditions.

·         In case an investment project is not in the same field or location to its head office and is not in investment encouraged ones, the added income shall be entitled to the corporate income tax rate of 28%.