I. INVOICES
1. Enterprises receiving support money and other financial revenues from organizations and individuals without conditions are not required to issue VAT invoices
Official letter No. 47061/CTHN-TTHT dated August 20, 2024 of the Hanoi Tax Department providing guidance on invoices when receiving sponsorship
In response to Official letter No. 521/TTYQG-KHTC dated August 5, 2024 of the National Center for Health Information (hereinafter referred to as “the Center”) requesting guidance on invoices when receiving sponsorship, the Hanoi Tax Department has the following comments:
Pursuant to Clause 1, Article 5 of Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance providing guidance on Value Added Tax (VAT), stipulating cases that are not required to declare and pay VAT:
+ Article 5. Cases that are not required to declare and pay VAT:
“1. Organizations and individuals receiving compensation in cash (including compensation for land and assets on land when land is recovered according to the decision of a competent State agency), bonuses, support money, transfer money for emission rights and other financial revenues.
When receiving compensation, bonuses, support money, transfer money for emission rights and other financial revenues, businesses must prepare receipts according to regulations. For businesses paying money, the purpose of payment is used to prepare payment receipts.
In case of compensation in the form of goods and services, the compensation facility must prepare invoices and declare, calculate and pay VAT as for the sale of goods and services; the compensation receiving facility must declare and deduct according to regulations.
In case a business establishment receives money from an organization or individual to perform services for the organization or individual such as repair, warranty, promotion, advertising, it must declare and pay taxes according to regulations…”
Based on the above regulations, in case the Center receives support money according to regulations in Clause 1, Article 5 of Circular No. 219/2013/TT-BTC, it is not required to declare and pay VAT, the unit must prepare a collection document according to regulations.
In case the Center receives money from an organization or individual to perform services for the organization or individual such as repair, warranty, promotion, advertising, it must issue an invoice according to regulations in Clause 1, Article 4 of Decree No. 123/2020/ND-CP and must fully record the content according to regulations in Article 10 of Decree No. 123/2020/ND-CP, and must declare and pay taxes according to regulations.
II. TAX POLICY
1. Golf membership cards used in common, without the name of the individual or group of individuals using them, are not subject to personal income tax.
Official letter No. 39488/CTHN-TTHT of Hanoi Tax Department dated July 4, 2024
In response to Official letter No. ZENI-HNO/02/2024 dated May 8, 2024 of The Zenitaka Corporation Representative Office in Hanoi (hereinafter referred to as the Company) on personal income tax policy for golf activities, Hanoi Tax Department has the following opinion:
Income from salaries and wages is the income that employees receive from employers, including:
a) Salaries, wages and amounts of salary and wage nature in cash or non-cash forms.
d.3) Membership fees and other service expenses for individuals upon request such as: health care, entertainment, sports, recreation, aesthetics, specifically as follows:
d.3.1) Membership fees (such as golf course membership cards, tennis court membership cards, cultural and artistic club activity cards, sports and fitness cards, etc.) if the card specifies the individual or group of individuals using it. In case the card is used in common, without the name of the individual or group of individuals using it, it is not included in taxable income”.
Based on the above regulations, in case the Company sends one or several employees to play Golf to interact and cooperate with customers:
1. If the documents and invoices for Golf expenses are all under the Company’s name, this expense is not income received by the employee and therefore is not included in taxable income for personal income tax.
2. If the golf card specifically states the name of the representative as a Company employee, that expense will be included in taxable income for calculating personal income tax for the participating individual.
2. If the company is not yet in operation, the remaining difference between deposit interest and loan interest expense is accounted for as a reduction in investment value
The General Department of Taxation received Official Letter No. 08/2024/KT-THUE dated February 22, 2024 from Lotte Global Logistics Vietnam Co., Ltd. regarding corporate income tax (CIT) policy. Regarding this issue, the General Department of Taxation has the following comments:
– Article 4 of Circular No. 96/2015/TT-BTC dated June 22, 2015 of the Ministry of Finance amending and supplementing Article 6 of Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance guiding on corporate income tax stipulates:
“Article 6. Deductible and non-deductible expenses when determining taxable income
2. Non-deductible expenses when determining taxable income include:…
2.31. Expenses for basic construction investment in the investment phase to form fixed assets.
When starting production and business activities, the enterprise has not yet generated revenue but has incurred regular expenses to maintain the enterprise’s production and business activities (not construction investment expenses to form fixed assets) and these expenses meet the prescribed conditions, then these expenses are included in deductible expenses when determining taxable income.
In case, during the investment phase, the enterprise incurs loan payment expenses, these expenses are included in the investment value. In case, during the basic construction investment phase, the enterprise incurs both loan interest payments and deposit interest income, the loan interest payments and deposit interest income can be offset, after offsetting the remaining difference is recorded as a reduction in the investment value.
3. Taxable income from personal property rentals
Article 10 of Circular No. 40/2021/TT-BTC dated June 1, 2021 of the Ministry of Finance stipulates the method of calculating tax for individuals leasing assets:
“Article 10. Tax basis
The basis for calculating tax for business households and business individuals is taxable revenue and tax rate calculated on revenue.
1. Taxable revenue
VAT taxable revenue and personal income taxable revenue for business households and business individuals are revenue including tax (in cases subject to tax).
3. Determining the amount of tax payable
Tax and VAT payable = VAT taxable revenue x VAT rate
Personal income tax payable = PIT taxable revenue x PIT rate
In which:
– VAT taxable revenue and personal income taxable revenue are as guided in Clause 1 of this Article.
– VAT rate and personal income tax rate are guided in Appendix I issued with this Circular.”
– In Appendix I issued with Circular No. 40/2021/TT-BTC dated June 1, 2021 of the Minister of Finance, the VAT rate is 5% and the personal income tax rate is 5% for asset leasing activities.
In case the Contract stipulates that the rental price does not include VAT and personal income tax, the tax authority shall re-determine the VAT revenue and the revenue subject to personal income tax (=) Revenue excluding tax paid to the individual leasing the asset divided by (:) [1-(VAT rate % + personal income tax rate %)]. Whether the lessor or the lessee is responsible for submitting the declaration and paying tax will be agreed upon by the two parties in the contract according to civil law.
III. LABOR – EMPLOYMENT
1. Enterprises employing foreign workers without work permits or with expired work permits (fine from 60 million to 150 million)
Pursuant to Clause 4, Article 32 of Decree No. 12/2022/ND-CP
4. Fines for employers who employ foreign workers in Vietnam without a work permit or without a certificate of non-work permit issuance or employ foreign workers with an expired work permit or a certificate of non-work permit issuance that has expired at one of the following levels:
a) From VND 30,000,000 to VND 45,000,000 for violations involving 01 to 10 people;
b) From VND 45,000,000 to VND 60,000,000 for violations involving 11 to 20 people;
c) From VND 60,000,000 to VND 75,000,000 for violations involving 21 or more people.
Apply the fine level to organizations according to the provisions of Clause 1, Article 6 of Decree No. 12/2022/ND-CP, the fine level for organizations is twice the fine level for individuals.
IV. SOCIAL INSURANCE
1. Conditions for receiving pension when participating in voluntary social insurance
I am a 40-year-old female, self-employed. I want to participate in voluntary social insurance from now on. How long do I have to pay to receive a pension? And how much will my monthly pension be if I pay the full premium within the time prescribed by law?
Vietnam Social Security:
Regarding voluntary social insurance participation: According to current social insurance law, voluntary social insurance participants are Vietnamese citizens aged 15 and over who are not subject to compulsory social insurance.
The monthly voluntary social insurance contribution for voluntary social insurance participants is 22% of the monthly income chosen by the participant, the lowest being equal to the poverty line in rural areas, the highest being 20 times the basic salary at the time of payment. Voluntary social insurance participants can flexibly choose payment methods: monthly, every 3 months, every 6 months, every 12 months, one-time payment for many years later but not more than 5 years at a time, one-time payment for the missing years for social insurance participants who have met the age requirements to receive pension according to regulations but the remaining social insurance payment period is not more than 10 years (120 months), then they can pay for 20 years to receive pension.
When participating in voluntary social insurance, participants are supported by the State with a percentage (%) of the monthly social insurance contribution according to the poverty line in rural areas, specifically: 30% for participants from poor households; 25% for participants from near-poor households; 10% for other subjects. The maximum support period is 10 years.
Regarding pension conditions: Voluntary social insurance participants are entitled to pensions when they meet the age requirements as prescribed in Article 169 of the 2019 Labor Code (in 2021, the retirement age of employees in normal working conditions is 55 years and 4 months for female employees. After that, each year increases by 4 months until reaching 60 years old in 2035) and have paid social insurance for 20 years or more.
Regarding monthly pension: According to the provisions of Clause 2, Article 56 of the Law on Social Insurance 2014, the monthly pension of employees who meet the prescribed conditions is calculated at 45% of the average monthly salary for social insurance contributions and corresponds to the number of years of social insurance contributions as follows:
Female employees retiring from 2018 onwards is 15 years. Then, for each additional year, 2% is calculated; the maximum level is 75%.
Vietnam Social Security provides information on conditions for participation and pension enjoyment for you to understand.
We recommend that you base on the provisions of the policy and your family’s economic situation to decide on the appropriate voluntary social insurance contribution level and method; at the same time, contact the social insurance agency where you reside or the nearest local social insurance collection agent for specific advice and guidance on your voluntary social insurance participation. Source: baohiemxahoi.gov.vn
2. Is it mandatory to close the social insurance book at the old company?
I quit my job in December 2023. Because the company owes social insurance, I have not been able to close my social insurance book, nor have I had my social insurance benefits resolved. After that, if I go to work at a new company, will I be entitled to all benefits when I have not closed my social insurance book at the old company?
Vietnam Social Insurance:
According to the provisions of Clause 5, Article 21 of the Social Insurance Law No. 58/2014/QH13, the employer is responsible for: Cooperating with the social insurance agency to return the social insurance book to the employee, confirming the period of social insurance payment when the employee terminates the labor contract, employment contract or quits the job according to the provisions of law.
At the same time, according to the provisions of Point 1.2, Clause 1, Article 46 of Consolidated Document No. 2525/VBHN-BHXH dated August 15, 2023 of Vietnam Social Security on the issuance of a document consolidating the collection process of social insurance, health insurance, unemployment insurance, and occupational accident and disease insurance, “For units that are late in paying social insurance, unemployment insurance, and occupational accident and disease insurance, if the employee is eligible for social insurance or terminates the labor contract or employment contract, the unit is responsible for paying enough social insurance, unemployment insurance, and occupational accident and disease insurance, including late payment interest as prescribed, the social insurance agency shall confirm the social insurance book to promptly resolve the social insurance and unemployment insurance regime for the employee. In case the unit has not paid enough, the social insurance book shall be confirmed up to the time of payment of social insurance, unemployment insurance, and occupational accident and disease insurance. After recovering the amount that the unit is late in paying, the additional confirmation shall be made on the social insurance book”.
Therefore, to ensure his rights when participating in social insurance, Mr. Phuong contacted his old company to request the company to confirm the time of social insurance payment for him according to the law. In case the company has not paid enough, the social insurance agency will confirm his social insurance book up to the time of payment of social insurance, unemployment insurance, and occupational accident and disease insurance. Source: Chinhphu.vn
V. LOAN
1. Lending money to foreign parent companies must be approved by the Prime Minister.
The lending of economic organizations abroad to non-residents is currently carried out in accordance with the following regulations:
Clause 2, Article 19 of the Foreign Exchange Ordinance No. 07/VBHN-VPQH dated July 11, 2013 stipulates:
“Economic organizations shall lend abroad, except for the export of goods and services with deferred payment; and guarantee for non-residents when permitted by the Prime Minister.
The State Bank of Vietnam shall guide the opening and use of accounts, capital transfer and foreign debt recovery, loan registration, foreign debt recovery and other capital transfer transactions related to lending and foreign debt recovery activities of economic organizations”.
According to Circular No. 37/2013/TT-NHNN dated December 31, 2013 of the Governor of the State Bank guiding a number of contents on foreign exchange management for overseas lending and debt collection guarantees for non-residents:
Article 7 stipulates the composition of the dossier for overseas loan registration.
Article 8, Clause 1: “Within thirty (30) days from the date of signing the loan agreement and before disbursing the loan, the Lender shall send directly or by post to the State Bank (Foreign Exchange Management Department) one (01) set of dossiers as prescribed in Article 7 of this Circular”.
In case of overseas lending to non-residents of an economic organization, after being permitted by the Prime Minister, the enterprise shall send the dossier for overseas loan registration to the State Bank as prescribed in Circular No. 37/2013/TT-NHNN mentioned above. Source: Chinhphu.vn
