Vietnam: Updates concerning corporate income tax, VAT, and foreign contractor tax
Recent guidance covering corporate income tax, value added tax, foreign contractor tax, and other regulations
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October 31, 2024
The KPMG member firm in Vietnam has prepared an October 2024 report that provides updates on various tax changes in Vietnam, including measures involving corporate income tax, value added tax (VAT), and foreign contractor tax.
Corporate income tax
- Representative offices must declare and pay corporate income tax on income from deposit interest (Official Letter No. 3227/TCT-CS, dated July 26, 2024).
Value added tax (VAT)
- Payment by securities is not considered a "non-cash payment" and related input VAT is not qualified for VAT credit (Official Letter No. 2086/TCT-CS, dated May 16, 2024).
- Transportation and customs declaration services performed outside non-tariff zones are not eligible for the 0% VAT rate (Official Letter No. 3814/TCT-CS, dated August 28, 2024).
- International Bill of Lading (BL) in sea and air carriage can replace the contract of carriage for applying the 0% VAT rate under certain conditions (Official Letter No. 3639/TCT-CS, dated August 20, 2024).
- Transfer of Voluntary Emission Reduction Certificate (VER) is subject to the 10% VAT rate (Official Letter No. 3390/TCT-CS, dated August 1, 2024).
Foreign contractor tax
- Foreign contractor tax is not applicable if loan interest is waived by a foreign lender (Official Letter No. 3602/TCT-CS, dated August 15, 2024).
Other regulations
- Decree 128/2024/ND-CP amends Decree 81/2018/ND-CP on trade promotion activities, including clarification of the maximum monetary value for promoted goods/services, cases not subject to value limitation, and notification procedures for promotional activities. The decree took effect from December 1, 2024.