Restriction in applying tax incentives by enterprises and how to optimise benefits from tax incentives Tax incentives are applied in the form of preferential duration of Corporate Income Tax (CIT) exemption (tax holiday), CIT reduction, preferential CIT rates, exemption or reduction of import tax on goods imported as fixed assets, raw materials, supplies, and parts used for the project, and exemption or reduction of land rental and land use tax, among others. The Investment Law regulates investment incentives and tax laws regulate CIT incentives. To be entitled to tax incentives, the enterprises and the projects need to meet the conditions stipulated in both laws. However, it could be very damaging if the investor incorrectly determined the incentives applying to their business. Conditions to apply CIT incentives Upon satisfying the criteria of location and/or sectors and/or scales to be entitled to CIT incentives, during the incentive enjoyment period, enterprises have to comply … [Read more...] about Optimising benefits from tax incentives
Declared services under service tax
Taxing times for the internet icons
Governments worldwide are concerned with the spread of so-called fake news online, Photo: freepik Last week, Google has been accused of manipulating users to track their activities in the Czech Republic, Greece, the Netherlands, Norway, Poland, Slovenia, and Sweden. AFP reported that seven European consumer groups filed complaints against Google with national regulators, accusing it of covertly tracking users’ movements in violation of EU data protection regulations. The complaints stated that Google used “deceptive design and misleading information, which results in users accepting to be constantly tracked.” Council official Gro Mette Moen charged, “Google uses extremely detailed and comprehensive personal data without an appropriate judicial basis, and the data is acquired by means of manipulative techniques.” Social media contains risks Over the last years, the emergence of the Internet and social media has brought about quite the information … [Read more...] about Taxing times for the internet icons
Liquidation of a Vietnamese entity—critical tax exposures
The liquidation of a Vietnamese legal entity is a lengthy and complicated process in which the final tax audit involves a lot of effort from the dissolving entity. This article is to provide a list of key and common issues, which are frequently challenged by the tax authorities during a tax audit upon dissolution for the enterprises’ perception and compliance in order to mitigate the risks of additional tax liabilities, penalties, and interest on late tax payment. There is a lot to consider when liquidating a company, with tax issues a major issue General procedures of liquidating a company The voluntary dissolution procedures of a company include the following steps with relevant parties and regulatory authorities: Resolution on dissolution to be passed by investors, disclosed to relevant stakeholders and announced publicly in the newspaper; Terminating contracts (with customers, suppliers, landlord, etc.) and liquidating assets; Settling liabilities in accordance … [Read more...] about Liquidation of a Vietnamese entity—critical tax exposures
Finance Ministry vows to tighten management of cross-border services
VietNamNet Bridge - Under a proposal by the Ministry of Finance (MOF), the payment for cross-border services will be made through the national payment portal NAPAS, a unit belonging to the State Bank (SBV). The payment for cross-border services must be made through NAPAS This will allow taxation bodies to control revenue from services and to ask foreign institutions to pay tax. MOF, which is drafting the amended Tax Management Law, has asked all relevant agencies to tighten management over e-commerce activities and fight against the loss of revenue from tax collections. The State Bank has been asked to set up a regulation which forces all the payments for cross-border services to be made via NAPAS. Foreign network operators in Vietnam will be asked to set up divisions or representative offices in Vietnam to closely coordinate with Vietnamese state management agencies. MOF has also asked MIC (Ministry of Information and Communication) to work with them and ask foreign … [Read more...] about Finance Ministry vows to tighten management of cross-border services
Ministries disagree on solutions to collect tax from Google, Facebook
The Ministry of Finance (MOF) wants the State Bank of Vietnam (SBV) to instruct commercial banks to withhold taxes from transactions with Facebook and Google, but SBV said it is not authorized to do so. Ministries disagree on solutions to collect tax from Google, Facebook MOF has vowed to collect tax from Google’s and Facebook’s earnings in Vietnam, and is drafting a regulation on tax management over e-commerce activities. Under the draft regulation, cross-border services must make payments via the national payment portal NAPAS. This will allow taxation agencies to control revenue from services to collect taxes. The tax payments will be carried out under the withholding mode. Tax amounts will be deducted from revenue when making payments via NAPAS. SBV’s Governor Le Minh Hung said MOF has the legal right to issue regulations, guide tax declarations, and report and collect tax. SBV doesn’t have the right or skills in this field. Under current laws, … [Read more...] about Ministries disagree on solutions to collect tax from Google, Facebook