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Tax news - February 2022


Issued by: The Government


Effective from: 01 February 2022


DECREE 15/2022/ND-CP – GUIDING THE IMPLEMENTATION OF REDUCING VALUE ADDED TAX (“VAT”) RATE TO 8% FOR SEVERAL GOODS AND SERVICES.


Decree 15/2022/ND-CP stipulating tax exemption and reduction policies according to Resolution 43/2022/QH15 of the National Assembly. This Decree takes effect from February 1, 2022. In this Decree, the Government specified the detailed procedures to apply the reduction of VAT rate; specified in details the goods and services which are not subject to tax reduction. This Decree answered questions of business regarding the implementation since the issuance of Resolution 43.


Specifically, the decree mentioned the instructions for business having goods and services which are eligible for VAT reduction according to Resolution 43/2022/QH15 when issuing VAT invoices.

In addition, the appendices 1,2,3 of this Decree also state clearly the items which are not eligible for VAT reduction. Specifically, the appendices are divided into 7 levels, names, contents and HS codes on the lists of goods and services. Therefore, businesses can easily to follow and evaluate whether their goods and services are applicable for tax reduction.


Moreover, the Decree also provides the definitions and conditions for calculating deductible expenses when determining the taxable income for corporate income tax for the tax period of fiscal year 2022 regarding supporting and sponsoring expenses, supports in cash for prevent Covid-19 in Vietnam through sponsor units.


Issued by: Prime Minister


Effective from: 21 February 2022


DECISION 40/2021/QĐ-TTg – THE OVERSEAS EMPLOYMENT SUPPORT FUND


On December 31, 2021, the Prime Minister has promulgated Decision No. 40/2021/QD-TTg on the overseas employment support fund.

- The Decision specifies the support for workers who have occupation accidents, other accidents or diseases and are no longer capable of working overseas. The support is from VND 10.000.000/case to VND 30.000.000/case. (Previously, the maximum support is 5.000.000/case)

- The worker, the authorized person or the representative of worker shall send a written request for support enclosed with an application to the Fund Executive Agency. An application shall contain:

  • A copy of the contract termination record signed between service provider and the worker, clearly stating the reason for returning home before the expiration of contracts; or

  • The employer’s written notice of the termination of the contract with the worker;

  • A copy of the medical certificate or other documents proving the illness or injury issued by the health facility of the host country;

  • A copy of the passport;

  • A power of attorney (clearly stating content of authorization) or document proving the right to represent according to regulations of law in case the authorized person or the legal representative submits the application.


Issued by: The Minister of Labor, War Invalids and Social Affairs


Effective from: 20 February 2022



CIRCULAR 36/2021/TT-BLĐTBXH PRESCRIBING INDEXATION RATE OF MONTHLY SALARY AND INCOME AFTER PAYMENT OF SOCIAL INSURANCE CONTRIBUTIONS


From January 01, 2022, the monthly salary after payment of social insurance contributions for employees paying compulsory social insurance specified in Clause 1, Article 1 of Circular No. 36/2021/TT-BLDTBXH shall be indexed as follows:


Indexed monthly salary after payment of social insurance contributions in each year = Total monthly salary after payment of social insurance contributions in each year x Indexation rate of monthly salary after payment of social insurance contributions in the corresponding year.


Indexation rate of monthly salary after payment of social insurance contributions in the corresponding year shall be specified in Clause 1, Article 2 of Circular 36/2021/TT-BLDTBXH from before 1995 to 2022. For instance:

  • Before 1995: 5,10 (increasing by 0,09 compared to in 2021)

  • 1995: 4,33 (increasing by 0,08 compared to in 2021);

  • 1996: 4,09 (increasing by 0,07 compared to in 2021);

  • 1997: 3,96 (increasing by 0,07 compared to in 2021);

  • 1998: 3,68 (increasing by 0,07 compared to in 2021);

  • 1999: 3,53 (increasing by 0,07 compared to in 2021);

  • 2000: 3,58 (increasing by 0,06 compared to in 2021);

  • 2022: 1,00;

The Circular 36/2021/TT-BLDTBXH takes effect from February 20, 2022 and replaces Circular No. 23/2020/TT-BLDTBXH dated 30 December 2020.


Issued by: The Minister of Labor, War Invalids and Social Affairs


Effective from: 01 February 2022


CIRCULAR 18/2021/TT-BLĐTBXH - REGULATIONS ON HOURS OF WORK AND HOURS OF REST APPLICABLE TO WORKERS DOING SEASONAL PRODUCTION WORK AND PROCESSING OF GOODS UNDER ORDERS


In order to promulgate timely and appropriate regulations in accordance with the Labor Code 2019 on working hours and rest hours of employees, specifically for employees doing seasonal production works, processing of goods under orders, on December 15, 2021, the Ministry of Labor, Invalids and Social Affairs issued Circular No. 18/2021/TT-BLDTBXH replacing Circular No. 54/2015/TT- BLDTBXH:

  • To be specific, maximum daily standard hours of work and extra hours of work are as follows: do not exceed 12 hours a day; do not exceed 72 hours a week; do not exceed 40 hours a month; the total number of overtime hours in a year for each employee must not exceed 300 hours.

  • Workers are entitled to at least one day off (24 consecutive hours) a week. In seasonal-work months or when export goods must be urgently processed under orders, if weekly days off cannot be arranged, the employer shall arrange at least 4 days off every month for the employees.

  • Besides, based on the standard hours of work in a year calculated, each employer shall annually make a plan to determine the number of daily standard hours of work of each worker in the following cases: The number of daily standard hours of work is 8; The number of daily standard hours of work can be more than 8 must not exceed 12; The number of daily standard hours of work is from 4 to less than 8; A whole day-off is allowed.

The total number of standard working hours and the number of overtime hours in a week of seasonal and processing goods under orders workforce will be increased up to 08 hours/week; the total number of overtime hours in a month will be increased up to 08 hours/month.


Issued by: General Department of Taxation


Effective from: 09 February 2022


OFFICIAL LETTER NO 347/TCT-DNNCN ISSUED BY THE GENERAL DEPARTMENT OF TAXATION DATED FEBRUARY 09, 2022 ABOUT GUIDANCE ON PAYMENT FOR ROOFTOP SOLAR POWER


Regarding the policies and procedures for payment of the solar power system questions raised by Vietnam Electricity (EVN), on February 9, 2022, the General Department of Taxation (“GDT”) issued the Official Letter No. 347/TCT-DNNCN providing the official guidance.


Priorly, GDT has promulgated a number of official letter responding to specific cases such as the Official Letter 5162/TCT-DNL dated December 11, 2019 about Tax policies for rooftop solar power; the Official Letter 1840/TCT-CS dated May 31, 2021 about buying or selling of rooftop solar power.


The general guidance for this matter are as following:

  • The subject are issued invoices for transactions on one-off basis: In case organizations are allowed to sell electricity, they must have Enterprise Registration Certificate and the Tax Authority shall guide the organizations or individual to issue invoices in accordance with regulations; organizations are allocated land by the State to use for the purpose of operating in hospitals, schools, places of worship establishments, administrative and non-business agencies... which has installed the system of rooftop solar for using and if there is an excess of electricity generated, it must be sold to EVN according to the signed contract, have invoices to deliver to EVN, and the Tax Authority shall issue an invoice for each incurred transaction as prescribed.

  • The value stated on the invoice is the contract price multiplied by VAT rate (3%).


Issued by: General Department of Customs


Effective from: 18 February 2022


OFFICIAL LETTER NO 521/TCHQ-TXNK - IMPLEMENTATION OF DECREE NO 15/2022/NĐ-CP


On February 18, 2022, the General Department of Customs issued Official Letter 521/TCHQ-TXNK guiding the implementation of Decree 15/2022/ND-CP on VAT reduction.


Specifically, the case of goods in Appendix I and Appendix III (attached to Decree 15/2022/ND-CP) with HS codes defined as:

  • Chapter (02 digits), without detailing groups (04 digits), subheadings (06 digits) or codes (08 digits), all 08-digit product codes of that chapter shall be subjected to 10% VAT;

  • Chapters (02 digits), with details up to heading (04 digits), without details of subheadings (06 digits) or codes (08 digits), all 08-digit product codes of that group shall be subjected to VAT 10%;

  • Chapters (02 digits), with details up to subheadings (06 digits), without detailing codes (08 digits), the entire line of 08 digits in that subheading shall be subjected to 10% VAT;

  • Chapters (02 digits), with details up to and including 08 digits, only those 08-digit code shall be subjected to 10% VAT.


Issued by: Hanoi Tax Department


Effective from: 28 January 2022


OFFICIAL LETTER NO 4251/CTHN-TTHT GUIDING INVOICES AND RECORDS


To address the problems of Official Letter No. 2312/2021/CV-RUBY Company's problems, Hanoi Tax Department has issued Official Letter No. 4251/CTHN-TTHT dated January 28, 2022. Accordingly, the Official Letter has provided guidance as below:

- In case the Company has used e-invoices according to Decree 123/2020/ND-CP, declared value-added tax (“VAT”) following the deduction method, the Company would uses VAT invoices for exported goods and providing services according to the provisions of Clause 1, Article 8 of Decree 123/2020/ND-CP.

- The currency stated on the invoice shall comply with the provisions of Point c, Clause 13, Article 10 of Decree 123/2020/ND-CP, specifically:

  • In case economic/financial transactions are incurred in foreign currency according to the provisions of the law on foreign exchange, the unit price, the total amount of payment and total amount of VAT according to each tax rate are recorded in foreign currency, the currency unit of which is the foreign currency's name. The seller also shows on the invoices the foreign currency exchange rate with Vietnam dong at the rate prescribed by the Law on Tax Administration and guiding documents;

  • Foreign currency codes are according to the international standards;

  • In case both goods sold and tax paid are in foreign currency according to the provisions of the law on foreign exchange, the total amount of payment shown on the invoice is in foreign currency, not converted into Vietnam dong.


Issued by: General Department of Taxation


Effective from: 09 February 2022


OFFICIAL LETTER NO 346/TCT-DNNCN DATED FEBRUARY 09, 2022 ISSUED BY GENERAL DEPARTMENT OF TAXATION ABOUT INSTRUCTIONS ON DECLARATION OR PAYMENT OF TAX ON BEHALF OF ANOTHER TAXPAYER ON PROMOTION BONUSES AND TRADE DISCOUNTS FOR PRESUMPTIVE TAX PAYERS


Having received many questions about tax declaration and payment on behalf of business households and individuals paying tax by the presumptive method for promotion bonuses and trade discounts, the General Department of Taxation has issued Official Letter 346/TCT-DNNCN dated February 09, 2022 providing guidelines on this matter.

  • Regarding the trade discounts, when the Company produces feeds for livestock, poultry and breed, trade discounts are given to customers who are household businesses paying presumptive tax and puses for production lines (purchasing feeds for livestock and poultry for breeding, not reselling and not eligible for tax exemption as prescribed for household businesses directly producing agricultural products), the Company only declares and pays PIT on behalf of presumptive tax payers at the PIT rate of 0.5%.rchasing goods in large quantity, including household busines

  • Regarding the sales promotion, in case the sales promotion program is conducted in accordance with the provisions of the Commercial Law No. 36/2005/QH11 dated June 14, 2005, the kind received by the presumptive tax payers in excess of VND 10 million is subject to personal income tax from winning prizes. Along with that, organizations paying promotions from winning prizes shall deduct tax according to the guidelines mentioned above of the Ministry of Finance.



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