Tax management for mergers and acquisitions activities has recently drawn a great deal of attention from the public. Nguyen Van Phung, director of the Department of Tax Administration at Large Enterprises under the General Department of Taxation, told Manh Bon about the major points of the current tax law governing these transactions. Nguyen Van Phung What taxes apply for mergers and acquisitions (M&A) transactions? Vietnam’s current regulatory system consists of several regulations governing M&A activities which are embedded in various legal documents, such as the Law on Enterprises, the Investment Law or the Competition Law. M&A transactions generally involve the seller, the buyer, and intermediary parties. The objects of the transaction can be assets and investment projects of businesses, whole production and business establishments, contract-based capital or stake transfer of businesses or gradual stock transactions in the stock market until reaching the … [Read more...] about Clear tax policies on M&A transactions now in place
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Handing over the right of prosecution and investigation to tax authorities may halt tax evasion? Authorities powerless in face of tax evasion by foreign firms In reality, despite the fact that foreign firms are acquiring massive annual revenue and profit from their operations in Vietnam, the local government faces difficulties in collecting tax from them, as could be seen with the examples of Uber and booking sites Agoda, Booking.com, and Traveloka. A number of these enterprises have been delaying tax payments, while others took advantage of loopholes to evade tax obligations. Notably, in late January 2017, the Ministry of Finance (MoF) asked booking sites that allow tourists to book hotel rooms in Vietnam to calculate and pay VAT and CIT. Targeted websites include Agoda, Traveloka, Booking, and Expedia. The CIT rate is 5 per cent of the total revenue. VAT is calculated on the added value that the companies, called “the foreign contractor” by the ministry, make. MoF … [Read more...] about Extending mandate of tax authorities may halt tax evasion?
Tax authorities in Ho Chi Minh City have once again sent a request to Grab in Vietnam asking the company to provide details concerning its recent acquisition of rival Uber's Southeast Asia business. The reason for the request is due to the fact that Grab is legally obliged to pay tax on the transfer of capital and business market share following the deal. Vietnam’s tax law states that all income generated by foreign companies operating in the country should be subject to tax, regardless of where they are based. Organizations and individuals that receive capital from foreign organizations are required to declare and pay tax on behalf of those foreign organization, tax authorities cited the law as saying. With details of the Uber- Grab deal remaining undisclosed, authorities are still unsure how to calculate how much the latter owes in tax. Uber also allegedly still owes Vietnam’s government $2.3 million in taxes required, but claims that according to Vietnam’s … [Read more...] about Grab refuses to release details of Uber buy-out to Vietnam’s tax man
According to the ministry, the move will encourage the thrift and effective use of energy and natural resources, and the production and consumption of eco-friendly products, while reducing emissions and fulfilling Vietnam’s international commitments to environmental protection. Agreeing with the suggestion, experts underscored the need for strong measures to curb environmentally-threatening activities by both individuals and organizations and raise public awareness of environmental protection and eco-friendly products. Photo for illustration. Source: cafef.vn At the same time, the tax also contributes to the State budget. In other countries, environmental protection taxes are estimated to account for around 5 percent of the gross domestic product (GDP) on average. The ministry estimated that environment protection tax collection will hit nearly VND 57.3 trillion (USD 2.51 billion) per year, marking an annual rise of more than VND 15.68 trillion, some VND 55.6 … [Read more...] about Finance ministry suggesting raising environment protection taxes
The sharp decrease in world oil price over the past three months is expected to affect Vietnam’s oil export earnings as well as a wide range of socio-economic aspects. As the budget revenue estimate for 2015 was calculated based on the oil price of around 100 USD per barrel, the Government recently had to convene a meeting to discuss ways to respond to this trend. The meeting agreed that with the low world price, it is inevitable that the country would have to reduce output and even suspend production at some wells where pumping cost is high. According to the Industry and Trade Ministry, when the price falls to 40 USD per barrel, crude oil output and export would be cut by between 1.8-2 million tonnes. As a result, the production target of 14.74 million tonnes of oil equivalent this year would not be met, not to mention adverse impacts on oil exploitation and refinery projects both at home and abroad. Nguyen Xuan Son, Chairman of PetroVietnam Member Council, said the group … [Read more...] about Bản in : Falling oil price and impacts on Vietnam’s economy