Monthly Newsletter September, 2018

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Notes on profit repatriation

On the 15th of August 2018, Hanoi Tax Department issued official letter no. 57077/CT-TTHT as guidance on profit repatriation.

If the company has fully discharged its tax obligations to Vietnam Government, submitted audited financial reports, and annual tax return to relevant tax department; it can carry out profit repatriation procedures as follows:

• Profit repatriation notice: the company can submit Form “Profit repatriation notice” attached in Circular no. 186/2010/TT-BTC to relevant Tax department. In the notice, the company shall specifies the figure to be transferred of each financial year (in case the profits have been accumulated for years).
• Profit repatriation: the company can decide how much of profit to be repatriated; however, the calculation must be in compliance with Circular no. 186/2010/TT-BTC.
• Timing of Profit repatriation: upon submission of profit repatriation notice to tax department as per Article 5 Circular no. 186/2010/TT-BTC; the company can transfer such profit after 7 working days.

Invalid electronic vouchers in tax declaration and payment

On 17th of July, 2018, General Department of Taxation issued official letter no. 2796/TCT-DNL as guidance on usage of electronic vouchers for the purpose of tax declaration. The company uses and stores electronic vouchers (electronic invoices) issued by foreign suppliers, and those vouchers are managed via its electronic purchasing system. However, without seller’s digital signature, such vouchers are not valid for tax declaration and payment.

Expense recognition of deductible VAT on purchase

On the 28th of November 2017, General Department of Taxation issued official letter no. 5475/TCT-CS as guidance for expense recognition of deductible VAT on purchase. In case input VAT of a tax period qualifies for VAT declaration, it can be declared and offset against VAT payable in that period. In case deductible VAT is recognized as expense, there’s no regulations that it can be treated as deductible expense for CIT purpose.