Legal News

[Taxation] Information from the General Directorate of Taxation on the tax policy of advertising activities on Google

2024/03/07

The Directorate General of Taxation issued Official Letter No. 296/TCT-CS dated January 24, 2024, guiding the tax policy for advertising activities on Google. The details are as follows

◆VAT deduction conditions:
One of the conditions for deducting VAT on purchases is having one of the following: a VAT invoice for purchased services, a VAT payment voucher at the import stage, or a VAT payment voucher for tax declaration on behalf of the foreign party.
It should be noted that the prepaid invoice issued by Google Asia Pacific Pte. Ltd. is not a VAT invoice for companies reporting VAT under the deduction method, and therefore does not meet the conditions for VAT deduction on purchases.

◆Conditions to be deductible for corporate income tax (CIT) purposes:
In Official Letter No. 3149/TCT-CS dated August 15, 2018, the General Department of Taxation provided guidance to Hanoi Tax Department as follows
When an enterprise conducts online advertising on Facebook or Google, the said expenses can be deducted when calculating on CIT if the following two conditions are met: first, the expenditure is related to the production and management activities of the enterprise; second, the name, address and tax code of the enterprise are stated The second point is that the expenditure is related to the production and management activities of the enterprise, with the name, address, and tax code of the enterprise; and the third point is that the enterprise has a legitimate invoice, vouchers (if the seller does not issue invoices, the declaration and payment of foreign contractor tax under the regulations are required) and payment vouchers under the VAT Law.

◆ How to determine foreign suppliers doing business on e-commerce activities and digital platforms that have registered for tax code in Vietnam:
The General Department of Taxation publishes the list of overseas suppliers who have registered their tax codes on the electronic information portal for overseas suppliers (etaxvn.gdt.gov.vn). If necessary, you can access the electronic information portal to check the tax code registration status of Google Asia Pacific Pte.

References:
Official Letter No. 296/TCT-CS of the General Directorate General of Taxation dated January 24, 2024
Official Letter No. 3149/TCT-CS of GDT dated August 15, 2018