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September 2023 Tax Updates: Continuing support for employees whose jobs are impacted due to reductions in purchase orders until the end of 2023 and other recent tax updates.

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September 2023 tax updates: continuing support for employees whose jobs are impacted due to reductions in purchase orders until the end of 2023 and other recent tax updates

This September 2023 publication of our Tax and Accounting Updates focuses on a decision to continue support for employees whose jobs are impacted due to reductions in purchase orders until the end of 2023, electronic visas for citizens of all countries and territories from 15 August 2023, changes in immigration regulations under Law 23/2023/QH15, amendments to preferential export tariffs in order to implement the CPTPP Agreement and our regular review of recent Official Letters released by the Tax Authorities.

Continuing support for employees whose jobs are impacted due to reductions in purchase orders of businesses until the end of 2023

On 25 August 2023, Vietnam General Confederation of Labour issued Decision 7785/QD-TLD (Decision 7785) amending Decision 6696/QD-TLD regulating the implementation of policies to support Trade Union members and employees, who have working hours reduced, or labour contracts terminated due to reductions in purchase orders of businesses from 1 April to 31 December 2023.

Accordingly, employees who are entitled to the support under this Decision include Trade Union members and employees working under labour contracts at enterprises that pay Trade Union fees before 1 April 2023, who:

  1. Have working hours reduced or ceased working from 1 April to 31 December 2023 due to a reduction in purchase
  2. Have labour contracts suspended or are laid off without pay from 1 April to 31 December 2023 due to a reduction in purchase
  3. Have labour contracts terminated from 1 April to 31 December 2023 due to a reduction in purchase orders but are not eligible for claiming unemployment benefits.

Specific conditions to be entitled to the support are detailed in Article 6 of the Decision.

The one-time support amounts remain, ranging from 1 to 3 VND million per person, for Trade Union members depending on the subject. For those who are not Trade Union members, the supporting amount is 70%. The deadline for receiving applications is 31 January 2024.

Decision 7785/QD-TLD took effect from 25 August 2023.

Electronic visas for citizens of all countries and territories from 15 august 2023

On 14 August 2023, the Government issued Resolution 127/NQ-CP to amend the issuance of electronic visas.

Accordingly, electronic visas are new available to be issued to citizens of all countries and territories from 15 August 2023. The list of international border gates that allow foreigners to enter and exit using electronic visas include 13 air border gates, 16 road border gates and 13 border gates as detailed in the Resolution.

Changes in immigration regulations under law 23/2023/qh15, taking effect from 15 august 2023

On 24 June 2023, the National Assembly released the Law 23/2023/QH15 amending and supplementing several articles of the Law on Entry and Exit of Vietnamese Citizens and the Law on Entry, Exit, Transit, and Residence of Foreigners in Vietnam.

Accordingly, several immigration regulations are amended and supplemented as follows:

  1. Supplementing “place of birth” information on immigration documents
  2. Regulating the form of submitting documents online to apply for an ordinary passport, reporting the loss of an ordinary passport, and restoring the validity of an ordinary passport
  3. The electronic visa term is increased up to 3 months (90 days), valid for single or multiple entries. Note: Visa duration is calculated in days for visas with a term of less than 1 year to ensure consistency
  1. Removing the requirement that the remaining validity of a passport is from 6 months or more to be eligible to exit the country
  2. Increasing the temporary residence period up to 45 days for citizens of countries that are unilaterally exempted from visas by Vietnam and are considered for visa issuance and temporary residence extension according to other provisions of the Law
  3. Adding regulations to cancel the validity of the passport where it has been more than 12 months from the date the authorities promise to return the passport, but the citizen has not received the passport without any written notice of the reason
  4. Adding responsibilities of accommodation facilities and obligations of foreigners to present passports and valid documents of residence in Vietnam to accommodation facilities for temporary residence declaration according to regulations
  5. Temporary residence for foreigners is declared online or offline via temporary residence declaration form, which is submitted to local police authorities

This Law took effect from 15 August 2023.

Amending preferential export tariffs for Malaysia, Republic of Chile and Brunei Darussalam in order to implement the CPTPP agreement

On 7 September 2023, the Government issued Decree 68/2023/ND-CP amending Decree 115/2022/ND-CP dated 30 December 2022 on Vietnam’s Preferential Export Tariffs and Special Preferential Import Tariffs in order to implement the Comprehensive and Progressive Agreement for Trans-Pacific Partnership Agreement (CPTPP).

Accordingly, the Government added Preferential Export Tariffs applicable to Malaysia, the Republic of Chile and Brunei Darussalam for 2022 – 2027. These Preferential Export Tariffs take effect for Malaysia, Republic of Chile and Brunei Darussalam is from 29 November 2022, 21 February 2023 and 12 July 2023, respectively.

This Decree took effect from 7 September 2023.

Official letters released

Official Letters are releases showing the Tax and other Authorities’ interpretation and application of Vietnam’s Taxation Laws, providing guidance to taxpayers in Vietnam.

Tax treatments for expenses paid by employees’ credit cards on behalf of the company

On 25 August 2023, the Hanoi Tax Department released Official Letter 62652/CTHN-TTHT on tax policy for expenses paid by personal credit cards.

Under this letter, where the company authorises its employees to pay a seller on behalf of the company for the purchase of fixed assets valued at over VND 20 million via their personal credit cards, and then the company reimburses the employees via bank transfer, the expense is deductible for VAT and CIT purpose provided the following conditions are met:

  1. This payment arrangement is mentioned in the company’s internal policy
  2. Adequate supporting documents showing the fixed assets are used for production and business activities of the company
  3. A VAT invoice issued under the company’s name and tax code
  4. Supporting documents relating to the payment on behalf of arrangements
  5. Bank payment vouchers from the employee’s credit card, account to the seller and from the company’s bank account to the employee’s account

VAT rates apply for amendment/ replacement invoices issued after 31 December 2022

On 30 August 2023, the Hanoi Tax Department released Official Letter 63648/CTHN-TTHT regarding VAT rates applied for amendment/ replacement invoices issued by enterprises entitled to VAT reduction under Decree 15/2022/ND-CP after 31 December 2023.

Accordingly, amendment/ replacement invoices issued after 31 December 2022 without affecting to the taxable price and VAT payable, then 8% VAT rate is applicable for the amendment/ replacement invoice.

On the other hand, amendment/ replacement invoices issued after 31 December 2022 with changes in quantities, taxable price and VAT payable, the prevailing VAT rate at the issuance date is applied for the amendment/ replacement invoice.

Claiming for input VAT for an invoice with an incorrect VAT rate

On 25 August 2023, the Hanoi Tax Department released Official Letter 62665/CTHN-TTHT confirming the implementation of tax obligations.

Accordingly, where an e-invoice prepared under Decree 123/2020/ND-CP with an incorrect tax rate was sent to the buyer, then the seller can opt to issue an amendment or replacement e-invoice following the instructions in Clause 2b, Article 19, Decree 123/2020/ND-CP.

Where the e-invoice prepared under Decree 51/2010/ND- CP and Decree 04/2014/ND-CP has errors, the seller and the buyer must prepare an amendment minute stating the errors, then the seller notifies the tax authority and issues a replacement invoice to the buyer according to Clause 6, Article 12 of Circular 78/2021/TT- BTC.

For an invoice with incorrect VAT rates, which has not been adjusted prior to discovery by the tax authority, if the seller has declared and paid VAT according to the VAT rate stated on the invoice, the buyer is allowed to claim the input VAT deduction provided confirmation is received from the tax authority managing the seller as prescribed in Point b, Clause 5, Article 12 of Circular 219/2013/TT- BTC.

Requesting confirmation of tax liability is the seller’s right according to the provisions of Article 16 of the Law on Tax Administration 38/2019/QH14. The dossier requesting confirmation of fulfillment of tax obligations is made according to the instructions in Article 70 of Circular 80/2021/TT-BTC.

Tax incentive conditions for projects exempt from investment registration.

On 2 August 2023, the General Department of Taxation issued Official Letter 3295/TCT-CS on tax policy for projects exempt from investment registration.

According to the provisions of Clause 18, Article 1 of Decree 12/2015/ND-CP, where a company’s new investment project meets the conditions on preferential investment sectors and is allowed to invest according to the Law on Investment, the company is entitled to Corporate Income Tax incentive based on the actual conditions met.

The implementation of investment projects, the issuance of Investment Registration Certificates and conditions for doing business for each conditional scope of business follows the Law on Investment and relevant legal documents.

 

For more information on tax updates and other compliance requirements for businesses operating in Vietnam, follow our monthly releases on the website and social media channels at vietnam.acclime.com.

Updated on October 6, 2023
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