11 March 2015
PwC Vietnam NewsBrief
Circular 26 guiding various
tax changes
Th e Mi n istry of Finance i ssued Circular 26/2015/TT-BTC on 27 February 2015
(“Ci rcular 26”) prov iding guidance on the value added tax and tax
adm inistration changes as promulgated under Decree 12/2015/ND- CP (please
refer to ou r News Brief dated 27 February 2015) and amending, supplementing
som e prov isions under Circular 39/2014/TT-BTC on invoicing. A separate
Ci rcu lar will be issued to provide guidance on corporate i ncome tax.
Ci rcu lar 26 i s applicable from 1 January 2015. Key points of Circular 26 are as
fol l ows:
1 . Va l ue Added Ta x (“VAT”)
•
Th e su pply of fertilizer, feed for livestock, poultry, seafood and other
an i mals is VAT exempt i nstead of subject to 5% VAT. Input VAT in relation
to th e pu rchase of goods and services is still creditable if the VAT invoices
are i ssued or the payments of import VAT (for imported goods) are made
before 1 January 2015.
•
For an i nvestment project that i s liquidated without having generated any
taxable revenue, the input VAT previously incurred is dealt with as follows:
(i)
i f a refund for input VAT credit has n ot been claimed, such input VAT
credi t is forfeited at the time of l iquidation;
(ii) for an y VAT refund granted pre-liquidation , on ly the i nput VAT related
to th e di sposal of VATable assets post liquidation are not subject to
V A T claw-back. All other input VAT must be returned to the tax
au thority.
2. Ta x a dministra tion
•
Ci rcu lar 26 reconfirms the removal of th e requirement to submit the l ist of invoi ces for sales and
pu rchases, and other supporting documents, i n monthly and qu arterly VAT declarations.
•
Gu i dance on exchange rates under various tax laws i s now con solidated i nto the regulation s on Tax
A dm inistration and i ndicated to be i n line with Ci rcular 200/2014/TT-BTC on accounting.
•
In terest on l ate payment of tax is i mposed at a flat rate of approximately 18% per annum from 1 January
2015. For ov erdue tax i ncurred prior to 1 January 2015 but not y et settled as at 1 January 2015, the l ate
pay m ent interest will be calculated by applying the previously legislated interest rates (up to 25%) for the
peri od to 31 Decem ber 2014 and the 18% rate for the period th ereafter. Un der- declared tax relating to
th e peri od prior to 1 January 2015 but discovered afterwards upon tax audit or by the taxpayers
th em selv es will be subject to l ate payment i nterest at a flat rate of 18% per annum.
PwC
This publication has been prepared for general guidance on matters of interest only, anddoes not constitute professional advice. You should not act upon the information
containedin this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness
of the information containedin the publication, and, to the extent permitted by law, PwC does not accept or assume any liability, responsibility or duty or care for any
consequences of you or anyone else acting orrefraining to act, in reliance on the information containedin this publication or for any decision based on it.
2. Ta x a dministration (con t .)
•
Ci rcu lar 26 introduces a number of changes to simplify tax administrative procedures for foreign
sh i pping lines. Major changes are as follows:

A gen ts in Vietnam of foreign shipping lines are n o lon ger required to submit foreign contractor tax
(“FCT”) decl arations on a qu arterly basis. Th e agents shall be requ ired to m ake qu arterly
prov i sional FCT payments, but on ly submit a FCT return on an annual basis.

Un der the previous tax administration regulations, v essel documentation i s on e of the key
docu m ents required to support a claim for tax exemption under a Dou ble Taxation Agreement
(“DTA ”). Ci rcular 26 has remov ed this requirement. It i s however requ ired that the agents keep all
docu m ents in accordance with the A ccounting Law, Maritime Law and present to th e tax authorities
as an d when requ ested.

Th e docu ments requ ired for FCT refund claim under DTA h ave, to a certain extent, been simplified
by rem oval of tax payment receipts and written con firmation of the Vietnamese party regarding the
actu ally working period under the con tract of the foreign shipping lines. Especially, the foreign
sh i pping lines can be refunded first and tax audited l ater.
3. In v oicing
•
Th e requ i rement to register the use of Vietnamese language without diacritics and a comma (,) after the
th ou sandth, million th, billionth, etc. and a dot (.) after the unit digit on invoices have been abolished.
•
Th e tax department no l onger h as the authority to limit the number of i nvoices allowed to be used by
en terprises for a period from 3 to 6 mon ths as per each invoice issuance notification.
•
Th e tax department is required to approv e or otherwise a taxpayers eligibility to use self- printed/ prepri n ted invoices within 5 working days upon receipt of the application . Ci rcular 26 emphasizes that no
respon se from the tax authorities will be regarded as approval.
PwC
3. In v oicing (con t .)
To get in touch please
con t act:
Ho Ch i Minh City:
Dav id Fitzgerald – Partner
+84( 8) 3824 0116
dav [email protected]
Ri chard Irwin – Partner
+84 (8) 3824 0117
[email protected]
N guyen Thanh Trung – Partner
+84 (8) 3824 0103
n [email protected]
Ha Noi
Di n h Thi Quynh Van – Partner
+84 (4) 3946 2231
di [email protected]
N guyen Huong Giang – Partner
+84 (4) 3946 2237
n [email protected]
PwC
• Ci rcu lar 26 reiterates that organisation s/ individuals which use cashiers,
sel l ing management systems for receipt of/ making payments such as
restaurants, hotels, supermarkets etc. are required to h ave their systems
con n ected to the tax authorities’; organisations/ individuals classified as
h i gh tax risk are required to i ssue electronic i nvoices and obtain a code
for v erification purpose from the tax authorities. Further guidance is
expected to be i ssued for implementation.
• V A T i nvoices are no l onger required for the lending or return of
m achinery, equ ipment, goods. Th is i s consistent with what has been
gu i ded u nder Ci rcular 119/2014.
• In v oi ces are not required for internal consumption for con tinuation of
th e produ ction process.
• A n adjustment invoi ce is not required to be i ssued in case of the wrong
bu y er’s n ame/ address provided that the buyer’s tax code is correctly
recorded on the i nvoice. On ly a minute signed by both parties and
recti fying the information is requ ired.
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Pl ease contact us i f you need further information on these important
ch anges.