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According to this Official Letter, in case of the Company incurred direct expenditures on the employees' welfare(expenditures on employees' occasions who do not attend to annually Company's occasion under the Collective bargaining agreementdue to the disease), if the total expenditures incurred in the tax year do not exceed the practical average 1 month's salary in the fiscal year, the Company shall base on payment vouchers to employees and list of employees received cash for occasions according to Company's policies with signatures of employees to considerit asdeductible expense when determining CIT.
According to this Official Letter, Hanoi Tax Department allows the Company to have expense which including purchasing medical masks, antiseptic water, protective accessories and testing for infectious diseases for employees to prevent Covid-19 virus infection. Those are direct payments to employees besides the agreed salary, bonuses, andwelfare in order to improve the employees' material and spiritual life shall be determined as deductible expenditure when preparing CIT if it meets conditions of Clause 1, Article 4 of Circular 96/2014/TT-BTC and the total amount of welfares do not exceed 01 (one) pratical average 1 monthly's salary paid in the tax year of the enterprise.
Regarding PIT, if the above expenses mention clearly the name of the recipients, this expense shall be subjected to PIT. In case of the above expenses do not specify clearly the recipients and pay for collective of employees so expenses shall not be included in taxable income of PIT as prescribed.
This Decree amendedClause 3, Article 8, Decree No. 20/2017/ND-CP about deductible loan interest cost for enterprises engaged in transfer pricing, in which:
1. For the tax period of 2019and subsequent years:
1.1. Total deducted loan interest (excluding deposit interests and lending interests) incurring during fiscal year cannot exceed 30% of total net profit generated from business activities plus loan interest costs (excluding deposit interests and lending interests) and depreciation and amortization arising within that period when preparing CIT finalization.
The old Decree is setting the limitationat 20%.
1.2. Theundeductedloan interestcan becarried forward to the next tax period, as long as the total deducted loan interest in that period and not exceeding 30% according to this Decree. The loan interest can only be carried forward for a maximum consecutive period of 05 years.
The above content shall enter into force from 24th June 2020 and apply from the tax period of 2019 and subsequent years.
2. For the tax period of 2017 and 2018.
2.1 This Degree takes effectof retroaction for limiting loan interest expenses not exceeding 30% for tax period of 2017 and 2018.
To be specific, for CIT finalization in 2017 and/or 2018, taxpayers shall make updated CIT finalization for determining loan interest costs and CIT amounts payable (if any).
The dealine for submitting the updated CIT finalization is: before 01st January 2021.
2.2 If the sum of CIT and late payment interests is higher than the re-determined amount of CIT, the difference shall be offset against the CIT payable in 2020. The remaining amount after offset can be offset against the CIT amounts payable in the following years but not more than 05 years from the year 2020.
According to Resolution 954/2020/UBTVQH14, the personal deductions according to in Clause 1, Article 19 of Law on PIT in 2007 (under amended on Personal Income Tax Law 2012) is changed as follows:
-Personal deduction:11 million VND/month (Old level: 9 million VND/month);
-Deductions for eachdependant:4,4 million VND/month (Old level: 3,6 million VND/month)
Taxpayers shall declare and temporarily pay PIT from wages and salaries at the new level of personal deductions since:
-The temporary PIT declaration period onJuly 2020 for those who declare tax monthly.
-The temporary PIT declaration period on Quarter 3/2020 forthose who declare tax quarterly.
The new level of personal deductionwill apply from the PIT calculation period of 2020.
In case of the months and quarters in the tax period 2020, the taxpayer temporarily paid PIT from wages and salaries at the old personal deduction, the taxpayer shall re-determine the payable PIT amount of the annual tax period 2020 at the new personal deduction when finalizing PIT in 2020.
According to this Official Letter, in case the Company signs a contract with an overseas organization (without a permanent establishment in Vietnam) to perform services provided and consumed abroad or to perform international forwarding and warehousingservicesfrom abroad to Vietnam are not subject to contractor tax as prescribed in Article 2, Article 12 and Article 13 of Circular No.103/2014/TT-BTC.
However, attention tothe method of determining FCT on services such as international forwarding and warehousing services as follows:
-For services incur from abroad to Vietnam (whether the consignor in abroador the consignee in Vietnam paid the service charge), the amount of money received by the foreign company is not revenue subjected to FCT.
-For services incur from Vietnam to abroad (whether the consignor in Vietnam or the consignee abroad paid the service charge),the whole revenue is received by the foreign contractor excluding international transport charge payable to the shipping company is revenue subjected to FCT.
Compared to the Law on Tax Administration 2006, the Law on Tax Administration 2019 supplements and changes some points as belows:
-Addition the rights of taxpayers such as: be informed of tax refund schedule, not penalized if comply with guidlines by the competent authorities, access all electronic records ...
-Taxpayers must apply for taxpayer registration and shall be issued with tax identification numbers by tax authorities before beginning business operations or incurring amounts of taxable to the State Budget.
-Change deadlines for submission of tax declaration dossiers.
+ For taxes declared monthly: the 20th of the month succeeding the month in which tax is incurred.
+ For taxes declared quarterly: the last day of the first month of the succeeding quarter.
+ For taxes declared annually: the last day of the first month from the end of calender year or fiscal year.
+ Tax finalization: the last day of the 3rd month from the end of the calender year or fiscal year.
-Particularly for annual PIT statements prepared by income earners: the last day of the 4th month from the end of the calendar year.
-In case the tax declaration dossier submitted to the tax authority is erroneous or inadequate, supplementary documents may be provided within 10 years from the deadline for submission of the erroneous or inadequate tax declaration dossier but before the tax authority or a competent authority announces a decision on tax document examination.
-Supplementation case of tax exemption: Individuals whose annual personal income tax payable on salary or wage is VND 50,000 or smaller.
-Law on electronic invoices. Regulations on electronic invoices and documentsis effective from 1st July 2022.