On the 15th of February 2019, Hanoi Tax Department issued official letter number 6351/CT-TTHT as guidance on deductibility of expenses relating to foreigners who work without working permit.
Expenditures that conform with the regulations at Clause 1, Point 2.5, Clause 2, Article 6, Circular 78/2014/TT-BTC dated 18/6/2014 (which is amended and supplemented with Circular 96/2015/TT-BTC) and Article 15 Circular 219/2013/TT-BTC dated 31/12/2013 issued by Minister of Finance, shall be allowed for corporate income tax purpose, and corresponding input VAT shall be deductible.
In case the company employs foreigners to perform works at Vietnam without obtaining working permit from Vietnamese authorities as per Labor Law, then expenditures incurred in connection with such employee shall be disallowed for CIT purpose, corresponding input VAT shall not be deductible.
According to Decree no. 82/2018/NĐ-CP issued by the Government as regulations on industrial and economic zones, from the 10th of July 2018 onwards, 50% PIT credits granted to individuals working at Economic zone is repealed.
On the 8th of Aprial 2019, General Department of Taxation issued Official Letter no. 1285/TCT-DNNCN as guidance on assessment of 2018 PIT creditable on such cases.
Upon 2018 PIT finalisation, an individual’s PIT creditable for working at Economic zone, Border Gate Economic zone is assessed as below:
Assessable income derived from EZ from 01/01/2018 to 9/7/2018
Total assessable income in a tax year
PIT / CIT/ VAT
Below is list of compliance tasks must be completed before the holiday from 30th April to 1st May:
I. Enterprises declare tax on monthly basis:
1. Submit Value-Added Tax (VAT) return of March 2019
Enterprises must submit VAT return monthly, no later than the 20th of the following month. Specifically, for March tax return, enterprises must submit it no later than 20th April.
In case of late submission, enterprises will be then fined depending on the number of days late.
2. Submit Personal Income Tax (PIT) return of March 2019
In March, if enterprises withhold PIT from their employees’ salary, they are required to submit PIT return no later than the 20th of following month.
3. Submit invoice use report of March 2019
Enterprises will use invoices purchased from tax department if they fall into below categories:
- Enterprises which print their own invoices, and commit breaches of regulations on invoices; and were fined for administrative violations of tax evasion and tax fraud.
- Enterprises of which tax risk are significant.
The above enterprises are required to report invoice use to relevant tax department on monthly basis, even if there is no invoice used in the reporting period.
If no invoice is used in the reporting period, the number of used invoices will be stated as zero (= 0) in the report.
Deadline for report submission of March is 20th April. Late submission shall lead to administrative fines imposed on such enterprises.
4. Make payment of Quarter I 2019 CIT instalment
Enterprises must make payment of CIT instalment for the first quarter of 2019 by 30th April and do not submit the tax declaration.
Enterprises assess the amount of CIT instalment based on last year CIT and proposed business result in the current year.
Enterprises make payment of quarterly CIT instalment at the local State Treasury or through commercial banks that provide State Treasury collection services (tax collection).
II. Enterprises declare tax on quarterly basis
1. Submit Value-Added Tax (VAT) return of Quarter I 2019
Enterprises must submit VAT return quarterly. The VAT return of Quarter I must be submitted no later than 30th April.
2. Submit Personal Income Tax (PIT) return of Quarter I 2019
In Quarter I, if enterprises withhold PIT from their employees’ salary, it is required to submit PIT return no later than 30th April.
3. Submit invoice use report of Quarter I 2019
Enterprises will quarterly submit the invoice use report to the relevant tax department, even if there is no invoice used in the reporting period.
In case change of business address leads to change in tax department in charge, the enterprise is required to submit invoice use report to the previous tax department.
Deadline for submission of invoice use report of Quarter I is 30th April.
4. Report of PIT certificate usage Quarter I 2019
Enterprises which use PIT certificates in Quarter I must submit PIT certificate usage report to the relevant tax department, including both self-printed certificates and the ones granted by tax department.
Deadline for submission of PIT certificate usage report of Quarter I is 30th April.
5. Make payment of CIT instalment for Quarter I 2019
Enterprises assess the amount of CIT based on last year’s CIT and proposed business result in the current year.
Enterprises make payment of CIT instalment at the local State Treasury or through commercial banks that provide State Treasury collection services (tax collection).
NOTE: Since 30th April and 1st May are public holiday, if the deadline is 30th April, enterprises can still perform the tasks on 2nd May, 2019 (based on Clause 4 Article 8 of Circular 156/2013 / TT-BTC of the Ministry of Finance); However, enterprises should complete the tasks before the holidays ..