TAX MANAGEMENT

 New organizational structure of the Tax sector continues to be improved:

The Ministry of Finance continues to implement decisions on reorganizing the Tax sector according to Decision No. 381/QD-BTC dated February 26, 2025, and related decisions issued in March. In April, tax units at all levels focused on stabilizing the apparatus and completing tax management procedures under the three-level model: Tax Department, Regional Tax Sub-department, and District Tax Team, aiming to enhance management efficiency and support taxpayers.

Guidance on business registration amid local administrative reorganization:

Following the Prime Minister’s Directive in Decision No. 571/QD-TTg dated March 12, 2025, the Ministry of Finance issued Official Letter No. 4370/BTC-DNTN dated April 5, 2025, providing detailed guidance on business registration in cases of administrative boundary changes such as provincial mergers, abolition of district levels, or commune mergers:

Enterprises, business households, and cooperatives continue to use the already issued Business Registration Certificate and are not required to register changes of address due to administrative boundary changes.

The business registration agency is not allowed to request enterprises to change address information in such cases.

CORPORATE INCOME TAX (CIT)

Determination of deductible expenses for depreciation of fixed assets:

The General Department of Taxation reaffirmed in Official Letter No. 655/TCT-CS dated February 14, 2025, that fixed assets without legal ownership documents (for example, land use rights certificates not yet issued) do not qualify for depreciation deduction when determining taxable income for CIT purposes.

Non-deductibility of land lease expenses not serving business production:

The Tax Department issued Official Letter No. 140/CT-CS dated March 14, 2025, emphasizing that one-time land lease payments for land areas not used for business production are not deductible expenses when calculating taxable income for CIT.

Corporate income tax exemptions:

CIT exemption for 2 years and 50% reduction for the following 4 years applies to income from innovative startup activities of creative startup enterprises, venture capital fund management companies for startups, and intermediary organizations supporting innovation startups. The exemption period is determined according to CIT laws.

CIT exemption applies to income from the transfer of shares, capital contributions, capital contribution rights, share purchase rights, and capital purchase rights in innovative startup enterprises.

CIT exemption applies for 3 years from the date of first issuance of the Enterprise Registration Certificate or small and medium-sized enterprises. (As stipulated in Resolution No. 198/2025/QH15 dated May 17, 2025, on special mechanisms and policies for private economic development)

Land sublease activities:

Regardless of whether infrastructure or constructions are attached to the land, subleasing land is considered a real estate transfer activity. Therefore, income from land sublease is treated as income from real estate transfer for CIT purposes. (Official Letter No. 1088/CT-CS dated May 8, 2025, of the Tax Department concerning CIT incentives from land sublease activities)

Tax policy on brokerage commission expenses:

If an individual meets the conditions of a trader-operating independently, regularly, and registered as a business household in the same industry as the service contract=the individual’s income is classified as business income under Article 2 of Circular No. 40/2021/TT-BTC dated June 1, 2021, of the Ministry of Finance. (Official Letter No. 1105/CT-CS dated May 9, 2025, on tax policy)

Tax incentives for investment projects in preferential areas:

In principle, if a company’s investment project qualifies for CIT incentives due to meeting preferential location criteria, the income from the project in the preferential area is entitled to CIT incentives according to the location conditions.
(Official Letter No. 927/CT-CS dated April 28, 2025, of the Tax Department)

VALUE ADDED TAX (VAT)

Guidance on VAT declaration and deduction for online advertising invoices:

Invoices issued by foreign suppliers, even if registered for tax in Vietnam and paying VAT based on a revenue ratio method, are not considered valid VAT invoices for input VAT deduction under the credit method. (Official Letter No. 473/CTPHY-TTHT dated February 20, 2025, issued by Phu Yen Tax Department)Guidance on VAT for exported goods via foreign e-commerce platforms:

Enterprises selling goods through foreign e-commerce platforms that do not meet the conditions for applying the 0% VAT rate are not entitled to VAT deduction or refund under current regulations. (Official Letter No. 986/TCT-CS dated February 28, 2025, issued by the General Department of Taxation)

Guidance on VAT declaration when switching to centralized accounting model:

Enterprises switching to a centralized accounting model at their headquarters can declare VAT centrally and allocate it to localities where production facilities are located. Branches that sell goods directly use invoices registered by the branch and declare VAT independently.
(Official Letter No. 831/CT-NVT dated April 24, 2025)

Electronic invoices in e-commerce and export activities:

From June 1, 2025, foreign suppliers conducting e-commerce and other services in Vietnam may voluntarily register to use electronic VAT invoices (e-invoices), which are VAT invoices. Registration is done via the electronic portal for foreign suppliers without permanent establishments in Vietnam. According to Decree No. 70/2025/ND-CP dated March 20, 2025, to apply electronic VAT invoices, foreign suppliers may need to register for VAT declaration under the credit method. Detailed guidance on tax registration and VAT declaration methods for foreign suppliers engaged in e-commerce will be issued soon.
Businesses declaring VAT under the credit method must use electronic VAT invoices.
For export activities, businesses use internal delivery notes as circulation documents to the export customs clearance location and issue electronic VAT invoices for exported goods after completing export procedures. Organizations and individuals declaring VAT under the direct method, including those in non-tariff zones, use electronic sales invoices.
Electronic sales invoices for exported goods must be issued at the time of transfer of ownership or usage rights to the buyer, according to Article 9, Clause 1 of Decree 123 and guidance in Official Letter No. 8404/BTC-TCT dated August 23, 2022, of the Ministry of Finance.

Businesses with both exported and domestically sold goods/services:

If a business has both exported and domestically sold goods/services (subject to VAT and non-VAT subjects), it must separately account for input VAT serving export activities, domestic sales not subject to VAT, and domestic sales subject to VAT.
If separate accounting is not possible, the input VAT serving export activities that cannot be separately accounted for is determined by allocating according to the ratio of export revenue on total revenue subject to VAT (including domestic and export revenue) for VAT declaration periods from the next period after the last refund period to the current refund request period. (Official Letter No. 1089/CT-CS dated May 8, 2025, of the Tax Department)

VAT incentives for investment projects in preferential areas:

Companies must comply with VAT laws, including issuing invoices, declaring, and paying VAT on time, and recording and deducting input VAT for lawful activities.
(Official Letter No. 927/CT-CS dated April 28, 2025, of the Tax Department)

PERSONAL INCOME TAX (PIT)

Issuance of the automatic PIT refund process:

After the deadline for submitting the PIT finalization declaration, the system will automatically generate a suggested tax declaration for individuals. Individuals can confirm or edit the declaration via the eTax Mobile app or the personal electronic tax portal. Automatic refund dossiers are processed when all conditions on tax obligations, data matching, and verification of the refund account are met.
If conditions are not met, the refund dossier will be manually checked and handled by tax officers. (Decision No. 108/QĐ-TCT dated January 24, 2025, and Official Letter No. 126/DNL-THNV dated February 14, 2025, issued by the General Department of Taxation)

PIT guidance for individuals managing insurance agencies:

Individuals signing contracts as insurance agency managers are not considered business individuals; their income is treated as salary and wages. Individuals who conduct business as insurance agency managers must declare and pay tax under business income regulations if their income exceeds 100 million VND per year.
(Official Letter No. 528/CT-CS dated April 10, 2025)

PIT exemptions:

Personal income from the transfer of shares, capital contributions, capital contribution rights, share purchase rights, and capital purchase rights in innovative startup enterprises is exempt from PIT. (Resolution No. 198/2025/QH15 dated May 17, 2025, on special mechanisms and policies for private economic development)

Severance allowance for employees:

Payments of severance allowance made by companies to employees, in accordance with the subjects and levels prescribed by the Labor Code and Social Insurance Law, are not included in taxable income from salary and wages for PIT purposes as guided in Clause b.6, Point b, Clause 2, Article 2 of Circular No. 111/2013/TT-BTC. (Official Letter No. 12044/CCTKV01-QLDN5 dated May 5, 2025, issued by Tax Sub-department Area 1)

Tax policy on brokerage commission expenses:

If an individual without business registration signs a contract with a company as prescribed, not subject to Article 2 of Circular No. 40/2021/TT-BTC, the individual’s income is classified as income from salaries and wages according to Point c, Clause 2, Article 2 of Circular No. 111/2013/TT-BTC dated August 15, 2013, of the Ministry of Finance. The company is responsible for withholding and declaring tax as guided in Point i, Clause 1, Article 25 of Circular No. 111/2013/TT-BTC dated August 15, 2013, of the Ministry of Finance. (Official Letter No. 1105/CT-CS dated May 9, 2025, on tax policy)

OTHER CONTENT

Decree 81/2025/ND-CP dated April 2, 2025, extending the deadline for payment of special consumption tax on domestically produced automobiles:

Extends the deadline for special consumption tax arising in the tax periods from February to June 2025 to the end of November 20, 2025. Applies to enterprises manufacturing and assembling automobiles domestically.

Decree 90/2025/ND-CP dated April 14, 2025, amending Decree 17/2012/ND-CP guiding the Law on Independent Auditing:

Adds that large-scale enterprises must have their financial statements audited annually when meeting at least 2 of the 3 criteria: over 200 employees participating in social insurance, revenue over 300 billion VND, total assets over 100 billion VND. Adds principles for determining the number of employees, revenue, and assets as prescribed. Extends the deadline for VAT, CIT, PIT, and land lease payments for certain entities to support businesses overcoming economic difficulties.

Official letter guiding expenses for provisioning for investment losses:

Provisioning expenses made according to guidance are included as deductible expenses when determining taxable income for CIT purposes. Capital allocated to branches cannot be provisioned for investment losses. (Official Letter No. 469/CT-CS dated April 4, 2025)

Official letter guiding factory rental expenses:

Factory rental expenses are not included as deductible expenses when determining taxable income for CIT purposes if the lessor does not meet the conditions for leasing. (Official Letter No. 634/CT-CS dated April 16, 2025)