Tax Newsletter

May 2019

For reference only, not to be distributed, or sold

NEW REGULATIONS
Amendment to the List of projects that required environmental impact assessment report 3
From 1 July 2019, pensions and labour accident allowance shall be increased by 7.19% 3

GUIDING DOCUMENTATIONS/ OFFICIAL LETTERS

Corporate Income Tax (“CIT”)
Loan interest payments corresponding to the portion of registered charter capital not yet fully contributed in
accordance with the committed capital contribution schedule shall be non-deductible 4
Losses from offshore investment project would not be recognized as deductible expenses 4
Public non-business units paying CIT based on a percentage of revenue shall not be allowed to make provision for
wage reserves fund 5
Severance allowance in excess of the regulated cap would not be deductible for CIT purposes 6
Personal Income Tax (“PIT”)
Vacation expenses provided to specific individuals would be subject to PIT 6
Tax policy regarding remuneration of owner of one-member limited liability company 6
Tax policy on individual’s income from capital transfer 7
Foreign Contractor Withholding Tax (“FCWT”)
VAT invoices issuance for the value of equipment directly imported by investor 7
Value Added Tax (“VAT”)
Imported goods used for Enterprise Processing Export ("EPE") construction would still be subject to VAT 8
Overpaid import VAT at import stage would be neither creditable nor refundable with tax authorities 8
Incorrect declaration on value of exported goods must be corrected before claiming VAT refund 9
Construction of social housing subject to VAT rate at 10% 9
Allocation of input VAT of goods and services used for production and trading of both VATable and non-VATable
goods and services 10
Transfer of secured assets to repay loan to the bank is exempt from VAT invoice issuance 10
Investment projects with adjusted implementation progress are considered for VAT refund 11
Converted entities are allowed to claim VAT refund for remaining creditable input VAT 11
No VAT refund for investment projects of an enterprise the registered charter capital of which has not been fully contributed 12
Invoices
It is allowable to use both electronic invoice and printed invoice 12
Electronic invoice is not allowed to be converted multiple times 13
Tax Administration
Documents attached with accounting documents in foreign language are not required to be translated into Vietnamese 13
Related Party Transaction
Interest expenses for enterprises having related party transactions 14
Customs
Delivery of raw materials to branches which process and goods for exports is tax exempt if the required conditions
are satisfied 14
Import, export license for on-spot import and export of industrial precursors 15
Issuance of paper C/O and electronic C/O for the same shipment 16
Reinforcement of the implementation of customs procedures, management, monitoring on-spot import-export declarations 17
Addressing concerns about implementation of Circular No. 21/2017/TT-BCT 18
Post-customs clearance inspection in case there are suspects about the value of goods subject to tax rate of 0% or
tax exemption 19
Notification of processing contracts signed before 5 June 2018 20
Supplementary submission of C/O within the “30 days”, inclusive of weekends and holidays 20
Handling of import declarations of processing raw materials with incorrect export type 21
Classification of consumable materials in line with HS code 21
Customs declaration and finalization report for consumable materials and tools 22
Others
Latency period for change of land use form is not entitled to exemption 24
Establishment of Foreign Direct Investment (“FDI”) company in the field of medical equipment manufacturing 24
NEW REGULATIONS

Amendment to the List of From 1 July 2019, pensions

projects that required
environmental impact
assessment report
On 13 May 2019, the Government
issued Decree No. 40/2019/ND-CP
amending and supplementing a
number of articles in the Decrees
regulating and guiding on the
implementation of the Law on
Environmental Protection.
Accordingly, the new Decree
supplements and replaces the
following important lists: List of
entities that are subject to strategic
environmental assessment; List of
types of industrial manufacturing
activities with risk of environmental
pollution; List of projects where the
environmental impact assessment
report or environmental protection
plan registration are required, etc.
and labour accident allowance
shall be increased by 7.19%
On 20 May 2019, the Government
issued Decree No. 44/2019/ND-CP
adjusting the pensions, social
insurance allowance and monthly
allowance.
Accordingly, from 1 July 2019, the
pensions, social insurance allowances
and monthly allowances shall be
adjusted to increase by 7.19%
compared to the entitlement level
of June 2019.
This Circular takes effect from 1
July 2019.

In addition, the Decree replaces a

number of forms and guidance for
the preparation of strategic
environmental assessment report,
environmental impact assessment
report, environmental renovation
method, environmental protection
plans…

The Decree takes effect from 1 July

2019.

For reference only, not to be distributed, or sold © 2019 Deloitte Vietnam Tax Advisory Co., Ltd.
3
GUIDING DOCUMENTATIONS/
OFFICIAL LETTERS
Corporate Income Tax (“CIT”)
Loan interest payments
corresponding to the portion
of registered charter capital
not yet fully contributed in
accordance with the committed
capital contribution schedule
shall be non-deductible
On 19 April 2019, the General
Department of Taxation issued
Official Letter No. 1549/TCT-CS
guiding on interest payments
regarding loans used for contribution
of charter capital.
Accordingly, after 3 years from the
issuance date of the initial Enterprise
Registration Certificate, if the
stocks registered for issuance are
not sold out, the company is
required to register for reduction
of the amount of capital for which
stocks are allowed to be issued, to
make it equivalent to the number
of stocks issued.
In case a Joint Stock Company
increases its charter capital, but
has not fully contributed yet within
3 years from the issuance date of
the Business Registration Certificate,
and the company have not registered
© 2019 Deloitte Vietnam Tax Advisory Co., Ltd.
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for capital reduction with the
Department of Planning and
Investment, this would be considered
as incompliant with the prevailing
regulations.
Accordingly, the loan interest
expenses corresponding to the
portion of registered charter
capital which has not been fully
contributed in accordance with the
committed capital contribution
schedule, would not be deductible
expense for CIT purposes.
Losses from the offshore
investment project would
not be recognized as
deductible expenses
On 29 March 2019, the Hanoi Tax
Department issued Official Letter
No. 13704/CT-TTHT regarding
expenses for the offshore investment
upon termination of the investment
project.
Accordingly, losses arising from
the offshore investment projects
shall not be deducted from the
income (profit) arising in Vietnam.
Simultaneously, expenses which
are not corresponding with taxable
revenue shall not be recognized as
deductibleexpenses.
For reference only, not to be distributed, or sold
In case an enterprise having an
offshore investment project
established a subsidiary in a
foreign country, when this investment
project has been terminated and
the investment capital could not
be recovered, the loss from such
investment capital could not be
recognized as deductible expenses
for CIT purposes in Vietnam.
Public non-business units
paying CIT based on a
percentage of revenue shall
not be allowed to make
provision for wage reserves
fund
On 19 April 2019, the General
Department of Taxation issued
Official Letter No. 1546/TCT-CS to
address concerns in relation to
provisions to wage reserves fund
applicable to public non-business
units.
Accordingly, Income supplement
fund and Wage reserves fund are
two types of fund with different
funding sources and different
expending purposes. In particular,
Income supplement fund would be
used to cover additional expenses
to raise incomes of the employees
so that they are timely encouraged
to fulfill their assigned tasks. Wage
reserve fund would be used to
For reference only, not to be distributed, or sold
supplement the salary fund of the
following year, to ensure that
salary settlement for employees is
not interrupted.
In case public non-business units
make provision for Income
supplement fund, they should
follow Decree No. 141/2016/ND-CP,
Circular No. 145/2017/TT-BTC and
relevant regulations. With respect
to Wage reserves fund, if the public
non-business units declare and
pay CIT as a percentage of revenue,
the public non-business units are
not eligible to make provision and
use this fund.
A public non-business unit is only
allowed to make provision for
Wage reserves fund and recognizes
it as deductible expenses for CIT
purpose in case the unit applies
the Accounting System, invoice,
vouchers, pays CIT according to
the declaration and makes the
provisions in accordance with
Circular No. 96/2015/TT-BTC dated
22 June 2015 of the Ministry of
Finance.
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Severance allowance in
excess of the regulated cap
would not be deductible for
CIT purposes
On 11 April 2019, the General
Department of Taxation issued
Official Letter No. 1352/TCT-DNNCN
guiding tax policy on severance
allowance paid to employees in
excess of regulated cap.
Accordingly, when an enterprise
pays severance allowances to its
employees higher than the capped
amount as prescribed under the
Labor Code and the Law on Social
Insurance upon labor contract
termination, the enterprise shall
be required to withhold PIT at 10%
of the total income paid to
employees with value of VND
2,000,000 or more per each
settlement.
In addition, the severance allowances
paid to employees in excess of the
prescribed level shall be treated as
non-deductible expenses for CIT
purposes.
© 2019 Deloitte Vietnam Tax Advisory Co., Ltd.
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Personal Income Tax (“PIT”)
Vacation expenses provided
to specific individuals would
be subject to PIT
On 24 April 2019, the General
Department of Taxation issued
Official Letter No. 1650/TCT-DNNCN
regarding PIT policy for vacation
expenses provided to employees.
Accordingly, in case the vacation
expenses are paid by an enterprise
to its employees from the welfare
fund, if the individual employee’s
name is clearly mentioned, the
enterpise shall be required to
withhold PIT on the vacation
expenses. Otherwise, if the expenses
are recorded as generally incurred
for all employees and the
beneficiary’s name is not specified,
PIT withholding shall be exempted.
Tax policy regarding
remuneration of owner of
one-member limited liability
company
On 22 April 2019, the General
Department of Taxation issued
Official Letter No. 1590/TCT-DNNCN
guiding the tax policy regarding
remuneration of the owner of one
member limited liability company.
For reference only, not to be distributed, or sold
Accordingly, from PIT perspective,
the remuneration of the owner of
an one-member limited liability
company (owned by the individual)
is not employment income and
shall not be subject to PIT.
However, from CIT perspective,
remuneration and other expenses
such as insurance, housing rental
expenses and other associated
services provided to the owner of
an one-member limited liability
company, whether directly or
indirectly involved in the business
operations, shall not be deductible
for CIT purposes.
Tax policy on individual’s
income from capital transfer
On 4 April 2019 and 8 April 2019,
the General Department of Taxation
issued Official Letter
No. 1211/TCT-DNNCN and Official
Letter No. 1287/TCT-DNNCN,
respectively, regarding tax policies
on individual’s income from capital
transfer.
Accordingly, the individual’s
income from capital transfer
(stocks) of the joint stock
companies in accordance with the
Law on Enterprises and Law on
Securities is determined as income
from transfer of securites and
For reference only, not to be distributed, or sold
subject to PIT at the tax rate of
0.1% on the transfer price.
Income from capital transfer of
other types of companies (i.e.
limited liability companies,
partnerships, etc…) would be
subject to PIT as the transfer of
capital, to be subject to PIT at the
rate of 20% on taxable income (i.e.
income after deducting the
purchasing price of the capital
being transferred and transaction
expenses).
Foreign Contractor
Withholding Tax (“FCWT”)
VAT invoices issuance for the
value of equipment directly
imported by investor
On 26 April 2019, the Hanoi Tax
Department issued Official Letter
No. 26996/CT-TTHT guiding the
issuance of VAT invoices for
equipment imported by investor.
Accordingly, in case the foreign
contractor entered into a contract
with the investor to render design,
procurement and installation of
equipment for a project in
Vietnam; in which the investor
would directly carry out import
clearance procedures for the
equipment and pay import VAT,
© 2019 Deloitte Vietnam Tax Advisory Co., Ltd.
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then hand over to the foreign
contractor, where the foreign
contractor has issued commercial
invoices to the investor for the
value of imported machinery and
equipments: in case the investor
did not issue invoice for the
foreign contractor upon delivery of
the equipment, the foreign
contractor shall not be required to
issue VAT invoice for the value of
machinery and equipment directly
imported by the investor.
In addition, upon completion of
the supply of equipment and
services under the contract, the
foreign contractor shall issue VAT
invoices, declare and pay FCWT
liabilities (if any) according to
prevailing regulations.
© 2019 Deloitte Vietnam Tax Advisory Co., Ltd.
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Value Added Tax (“VAT”)
Imported goods used for
Enterprise Processing Export
("EPE") construction would
still be subject to VAT
On 8 May 2019, the General
Department of Taxation issued
Official Letter No. 1815/TCT-CS
regarding VAT on imported goods
used for construction and
installation projects for an EPE.
Accordingly, in case the domestic
enterprises import goods to use
for construction and installation
works for EPEs, they are still
required to pay VAT at the import
stage.
With respect to construction and
installation activities for EPEs,
domestic enterprises shall be
entitled to VAT rate at 0% upon
satisfaction of the conditions as
prescribed under Circular No.
219/2013/TT-BTC.
Overpaid import VAT at
import stage would be
neither creditable nor
refundable with tax authorities
On 3 May 2019, the General
Department of Taxation issued
Official Letter No. 1744/TCT-KK
For reference only, not to be distributed, or sold
guiding the VAT declaration for
overpaid import VAT from imported
goods.
According to the General Department
of Taxation, in case an enterprise
overpaid import VAT for the
imported goods, the tax
overpayment amount shall be
handled in accordance with Article
47, Tax Administration Law.
Nevertheless, the overpaid import
VAT of imported goods would not
be subject to the cases to be
creditable or refundable (with the
tax authorities) as prescribed
under VAT Law.
If the enterprise has declared such
amount as creditable input VAT for
VAT purposes, the enterprise shall
be required to adjust the tax
declaration return with tax
authorities. If the tax authority has
refunded the tax amount, the
enterprise must return the incorrect
refundable amount and
corresponding late payment
interests, counting from the date
of receiving the incorrect tax
refund to the date of returning
payment.
For reference only, not to be distributed, or sold
Incorrect declaration on
value of exported goods
must be corrected before
claiming VAT refund
On 19 April 2019, the General
Department of Taxation issued
Official Letter No. 1533/TCT-CS
guiding the VAT refund on exported
goods and services.
According to the General Department
of Taxation, it would be inaccurate
for the taxpayer to declare the
value of exported goods as the
amount after deducting the value
settled by buyer under offseting
method. In this case, the enterprise
shall be required to correct the
customs declarations and pay back
the shortfall tax liabilities.
After the adjustment of customs
declarations and settlement of the
outstanding tax payables to
customs authorities are completed
by taxpayer, the tax authorities
would consider to proceed refund
procedures for input VAT as
precribed.
Construction of social housing
subject to VAT rate at 10%
On 6 May 2019, the General
Department of Taxation issued
Official Letter No. 1783/TCT-CS
regarding VAT regime applicable to
© 2019 Deloitte Vietnam Tax Advisory Co., Ltd.
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construction activities of social
housing.
Accordingly, VAT rate at 5% is only
applicable to the sales, leasing,
finance leasing of social housing,
and not to the construction activities.
In case the entity constructed social
housing as a construction contractor,
the construction activities are still
subject to VAT rate at 10%. Only at
the stage when the investors sell
social housings with the prescribed
conditions satisfied then the VAT
rate of 5% would apply.
Allocation of input VAT of
goods and services used for
production and trading of
both VATable and non-VATable
goods and services
On 27 March 2019, the General
Department of Taxation issued
Official Letter No. 1040/TCT-CS
providing guidance for the allocation
of input VAT on goods and services
used for the production and trading
of both VATable and non-VATable
goods and services.
Accordingly, in case the Company is
trading both VATable and
non-VATable goods, but unable to
record seperately the creditable
and non-creditible input VAT
amounts, the creditble input VAT
© 2019 Deloitte Vietnam Tax Advisory Co., Ltd.
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shall be apprortioned by the ratio
of taxable revenue on total revenue.
On monthly/ quarterly basis, the
Company is allowed to provisionally
allocate creditable input VAT in
that month/ quarter. At the end of
the year, the company shall
recalculate the creditable VAT in
the year to properly adjust the
provisional allocated input VAT in
months/ quarters.
Transfer of secured assets to
repay loan to the bank is
exempt from VAT invoice
issuance
On 25 April 2019, the General
Department of Taxation issued
Official Letter No. 1663/TCT-CS on
issuance the VAT invoice and VAT
calculation of collateral assets for
loans.
Accordingly, in case the enterprise
entered into agreement with the
bank to hand over the assets for
offsetting with the loans before
the maturity of the loans, it is
necessary to clarify whether the
transfer of ownership of this prop-
erty is in the nature of alienating
the assets to secure the loan
repayment, or transfering assets
to offset the debts.
For reference only, not to be distributed, or sold
If this transaction is in the nature Converted entities are
of securing the assets to repay the allowed to claim VAT refund
loan and the the procedures for
handling the pledged assets have
for remaining creditable
been properly carried out, VAT input VAT
invoice issuance shall be exempt.
Otherwise, if the asset transfer On 18 March 2019, the General
agreement is not in the nature of Department of Taxation has
disposing assets to secure loans issued Official Letter No.
repayment, the enterprise shall be 890/TCT-CS providing guidance on
required to issue the VAT invoices. VAT refund upon enterprise
conversion.
Investment projects with
Accordingly, in case an enterprise
adjusted implementation
is converted from limited liability
progress are considered for company into joint stock company
VAT refund as prescribed and inherits the
entire pre-conversion tax obligations,
On 3 May 2019, the General where the tax code is not changed,
Department of Taxation issued the remaining creditable input VAT
Official Letter No. 1739/TCT-CS balance at the time of conversion
providing guidance on VAT refund would be either creditable in the
for the investment projects with following tax period or refundable.
adjusted implementation progress.
For pre-conversion VAT amount
Accordingly, in case the investment which are not entitled to the VAT
project having adjustment on the refund under the Law
implementation progress, if the No. 106/2016/QH13, Decree
enterprise has completed the No. 100/2016/ND-CP and Circular
procedures to adjust the project in No. 130/2016/TT-BTC, the
accordance with the Law on post-converted enterprise is not
Investment and obtained the entitled for tax refund and shall
written documents from the continue to credit the input VAT
competent authorities, and is not after the conversion.
under the circumstances of project
termination, the VAT refund claim
shall be considered.

For reference only, not to be distributed, or sold © 2019 Deloitte Vietnam Tax Advisory Co., Ltd.
11
No VAT refund for investment
projects of an enterprise the
registered charter capital of
which has not been fully
contributed
On 10 April 2019, the General
Department of Taxation issued
Official Letter No. 1348/TCT-CS
regarding VAT refund applicable to
investment projects.
Accordingly, the following investment
projects shall not be allowed to
claim VAT refund:
The investment project of an
enterprise the registered charter
capital of which has not been
fully contributed.
The investment project of an
enterprise, which undertakes
conditional business activities
but has not satisfied the
required conditions prescribed
under the Investment Law.
Invoices
It is allowable to use both
electronic invoice and printed
invoice
On 26 April 2019, the Hanoi Tax
Department issued Officical Letter
No. 26988/CT-TTHT regarding the
usage of electronic invoices by
Branches and Sales Offices.
Accordingly, an enterprise can
create electronic invoices to use at
branches, sales offices, and
simultaneously create printed
invoices to use at other dependent
units. The company shall submit a
notification on issuance of invoice
for each type of invoice, and use
one form of invoice for each sale
transaction.

The investment project of an

enterprise, which undertakes
conditional business activities
but failing to sustain the
business conditions during
operations.

© 2019 Deloitte Vietnam Tax Advisory Co., Ltd. For reference only, not to be distributed, or sold
12
Electronic invoice is not Tax Administration
allowed to be converted
multiple times Documents attached with
accounting documents in
On 22 April 2019, the Hanoi Tax foreign language are not
Department issued Official Letter required to be translated into
No. 23474/CT-TTHT regarding the
Vietnamese
use of electronic invoices.
On 26 April 2019, the Ministry of
Accordingly, in case the buyer is not Finance has issued Official Letter
an accounting unit, or is an No. 4942/BTC-QLKT guiding on the
accounting unit having sufficient translation of invoices and accounting
records, documents proving the documents from foreign language
provision of goods, services such as to Vietnamese as prescribed.
economic contracts, stock issue
vouchers, delivery records, Accordingly, in case the accounting
payment receipts, receipts,... the documents are in foreign language,
seller is not required to obtain the when being used for accounting
buyer’s electronic signature upon recognition and preparation of
issuance of electronic invoices. Financial Statements in Vietnam,
the main content must be translated
In principle, electronic invoices into Vietnamese as regulated under
could be converted into paper the Accounting Law. The Vietnamese
invoices for goods circulation translation must be attached with
purpose. Nevertheless, the conversion the original in foreign language.
is only allowed for one time. The
seller’s seal is not required on the With respect to documents in
converted electronic invoices; foreign languages attached to
however, other mandatory accounting vouchers, such as
contents as prescribed shall be contracts, documents attached to
required. payment vouchers, investment
project documentation, finalization
reports and other relevant
documents, translation into
Vietnamese is not required unless
there is a request from competent
authorities.

For reference only, not to be distributed, or sold © 2019 Deloitte Vietnam Tax Advisory Co., Ltd.
13
Related Party Transaction Customs
Interest expenses for Delivery of raw materials to
enterprises having related branches which process and
party transactions goods for exports is tax
exempted if the required
On 10 April 2019, the General conditions are satisfied
Department of Taxation issued
Official Letter No. 1315/TCT-DNL On 11 April 2019, the General
regarding the interest expenses of Department of Customs issued
enterprises having related party Official Letter No. 2139/TCHQ-TXNK
transactions. regarding exemption of import
duties on imported goods used for
Accordingly, the deductible interest export - processing producing
expenses of enterprises having activities. Specifically:
related party transactions shall be
capped at 20% of EBITDA. In case One of the conditions for the
the enterprise received after tax exemption of import duty on
profit from its subsidiaries, this goods (including raw materials,
profit should be recorded as financial materials, components,
income. semi-finished products,
finished products) imported
The “Total net profit” which forms for production of exported
the basis for calculating the interest goods is that the importer
expenses cap is determined by (=) must have production facilities,
Gross profit from supply of goods have ownership/ rights to use
and service minus (-) Selling of machinery at the production
expenses minus (-) General facility, and must directly
administration expenses plus (+) export the product.
Financial income minus (-) Financial
expenses. Pursuant to Clause 1, Article
45, Enterprise Law No.
68/2014/QH13, a branch is a
dependent unit of an enterprise,
and is responsibile for carrying
out a whole or part of the
functions of the enterprise

© 2019 Deloitte Vietnam Tax Advisory Co., Ltd. For reference only, not to be distributed, or sold
14
 including representation
functions as being authorized.
Business activities of the
branch must be aligned with
the enterprise’s registered
business activities.
Thus, in case parent company
has ownership or rights to use
of the machinery and equipment
at the branches or business
establishments located in
other provinces; and the
imported raw materials,
materials are circulated within
the company system for
production of exported goods,
and the products have been
actually exported; the entire
business expenses of the
branches have been consolidated
in the financial statements of
the parent company, then the
raw materials and materials
imported for the production of
exported goods of the parent
company shall be exempt from
import duty.
For reference only, not to be distributed, or sold
Import, export license for
on-spot import and export of
industrial precursors
On 4 April 2019, the Department of
Chemicals issued Official Letter
No. 296/HC-QLHC regarding industrial
precursors license for on-spot
import and export goods. Accordingly,
depending on specific cases of
on-spot import and export of
industrial precursor chemicals, the
enterprise will be exempted or be
required to obtain import and
export licenses from the Department
of Chemicals.
For certain cases in which the
import, export of precursors are
exempt from obtaining the license
because the precursors are not
physically delivered outside
Vietnam or into a separate customs
area, including:
In case the industrial precursors
are outsourced to local entities
by foreign organizations and
individuals for processing, and
then sold to other organizations
and individuals in Vietnam;
In case the industrial precursors
are traded between Vietnamese
enterprises and foreign
compaines that have no
presence in Vietnam and
© 2019 Deloitte Vietnam Tax Advisory Co., Ltd.
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 designated for delivery to
other enterprises in Vietnam.
With respect to the industrial
chemicals purchased between
domestic enterprises and export
processing enterprises or entities
in non-tariff zones, the following
shall be applied:
In case a domestic entity
purchases industrial precursors
from an export processing
enterprise, enterprise in
non-tariff zones, the domestic
entity is required to obtain
import license;
In case domestic entity sells
industrial precursors to an
export processing enterprise,
enterprise in non-tariff zones,
the domestic entity is not
required to obtain export
license.
Issuance of paper C/O and
electronic C/O for the same
shipment
On 12 April 2019, the General
Department of Customs issued
Official Letter No. 2174/TCHQ-GSQL
guiding the review of electronic C/O
form D through the ASEAN Single
Window mechanism. Specifically:
© 2019 Deloitte Vietnam Tax Advisory Co., Ltd.
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With respect to the issuance of
electronic and paper C/O for
the same import shipment, the
current regulations and
commitments in ASEAN do not
restrict the competent authorities,
organization from granting
paper and electronic C/O form
D for the same shipment.
Accordingly, in case a shipment
is granted both electronic and
paper C/O, the Customs
authorities shall base on the
electronic C/O to determine
preferential tariff rate for the
shipment. In case there are
differences in the information
between the paper C/O and
electronic C/O, the provincial
Customs Departments shall
carry out verification process
as prescribed. The inspection
and determination of the
origin of goods shall be carried
out as prescribed under
Circular No. 38/2018/TT-BTC
and the Procedures enacted
with Decision No. 4286/QD-TCHQ
dated 31 December 2015.
In case the ASEAN Single
Window (ASW) or National
Single Window (NSW) crashes,
the Customs authorities shall
receive the paper C/O that are
granted in accordance with the
ASEAN Trade in Goods
Agreement for further
consideration.
For reference only, not to be distributed, or sold
Reinforcement of the
implementation of customs
procedures, management,
monitoring on-spot
import-export declarations
On 24 April 2019, the General
Department of Customs issued
Offical Letter No. 2411/TCHQ-QSQL
regarding reinforcement measures
for the implementation of customs
procedures, management, monitoring
on-spot import-export declarations.
Accordingly, for on-spot
import-exports without corresponding
on-spot export-import declarations
in the system, the Customs
authorities shall organize the
review, statistics, classification and
handling works as follows:
In case of on-spot exports for
which a corresponding on-spot
import declaration has been
made, but the custom system
has not been able to locate
due to incorrect information
declared by the customs
declarers: the customs declarers
shall prepare a revised and
supplemented declaration. In
case the customs declarers do
not make the revised and
supplemented declaration, it is
required to apply risk
management criteria to
For reference only, not to be distributed, or sold
change to actual inspection of
records and status of goods
for the subsequent shipments
from the deadline for the
revision, supplement of
declaration until the enterprise
completes the revised and
supplemented declarations.
For on-spot export declaration
for which a corresponding
on-spot import declaration has
been made, but the importers
declared one on-spot import
declaration for multiple
on-spot export declarations:
the Customs Division shall
make a list of corresponding
import declarations for multiple
export declarations and report
to the provincial Customs
Department to combine and
send to the Customs IT and
Statistics Department for
further processing on system.
In case the importer has not
completed on-spot import
procedures within 15 days,
then:
In case any parties cancel
the transaction: the exporter
who carries out the
procedures for cancelling
on-spot export declaration
shall notify the list of
cancelled declarations to
© 2019 Deloitte Vietnam Tax Advisory Co., Ltd.
17
 local tax authorities in
charge of the exporter for
further review of tax
refund, tax credit claims.
In case transactions have
been completed, the
importer has received
goods but has not conducted
on-spot import procedures:
the Customs Division
where import procedures
are expected to be
conducted shall review and
determine whether the
goods are stored at the
warehouse, have not been
put into production or
consumption, or have been
used for production,
consumption without the
corresponding on-spot
import procedures, to
determine relevant taxes
and penalties.
In case the importer is
determined as non-existed
or has ceased operations,
went into dessolution or
bankrupt: the Customs
Division where import
procedures are expected
to be carried out shall
cooperate with the export
Customs Division to
prepare documents and
escalate to related agencies
© 2019 Deloitte Vietnam Tax Advisory Co., Ltd.
18
such as the Department of
Anti-Smuggling and
Investigation or the Police
or other relevant agencies
to handle in accordance
with the regulations to
handle non-compliances to
customs procedures, and
send a report of the list of
enterprises (together with
records) to the Department
of Customs Management
Supervision.
The review will be conducted
before 1 July 2019.
Addressing concerns about
implementation of Circular
No. 21/2017/TT-BCT
On 23 April 2019, the General
Department of Customs issued
Official Letter No. 2389/TCHQ-GSQL
answering certain questionnaires
on the implementation of Circular
No. 21/2017/TT-BCT (“Circular 21”)
on national technical standards on
content of formaldehyde and
certain aromatic amines derived
from Azo colorants in textile products.
Accordingly, for the List of textile
products in Appendix 1 of Circular
21, the enterprises shall make
announcement of the conformity
before the products are circulated
in the Vietnam market, but is not
For reference only, not to be distributed, or sold
required to present the specialized post-customs clearance
inspection results during customs inspection at the customs
clearance for the goods. authorities.

Post-customs clearance For the notification of suspicions

inspection in case there are on customs valuation in the
electronic declarations, to
suspects about the value of
mitigate the situation where
goods subject to tax rate of exporters and importers do
0% or tax exemption not receive the notification of
suspections on customs
On 16 April 2019, the General valuation and request for
Department of Customs issued inspection and consultation of
Official Letter No. 2190/TCHQ-TXNK the customs declarations, then
guiding on inspection, consultation in addition to notifying the
and determination of customs customs declarants through
dutiable value. Some main orders on the system, customs
contents are summarized as officers shall prepare a Notification
follows: of suspicions based on Form
No. 02A/TB-NVTG/TXNK (in paper)
Accordingly, in case the as prescribed under Circular
customs declarations are No. 38/2018/TT-BTC and deliver
subject to inspection by the to the declarers.
system due to risk of customs
dutiable value while the goods
are subject to import tax rate
of 0% or tax exemption,
however customs authorities
raise suspicions on the
declared customs value, a
review of declared customs
information and highlight of
suspects shall be conducted,
however consultation on
dutiable value shall not be
carried out. Nevertheless risk
monitoring and assessment
should be strengthened for

For reference only, not to be distributed, or sold © 2019 Deloitte Vietnam Tax Advisory Co., Ltd.
19
Notification of processing overdue for the deadline of
contracts signed before 5 “30-day” due to falling in weekends
and holidays during the
June 2018 implementation of customs clearance
procedures.
On 16 April 2019, the General
Department of Customs issued
Accordingly, as guided in Official
Official Letter No. 1179/GSQL-GQ2
Letter No. 4943/TCHQ-GSQL, the
regarding the implementation of
term “30 days” from the date of
finalization reports in relation to
registration of the customs
processed goods, goods
declarations refers to calendardays.
manufactured for exports, and
In case the deadline of “30 days”
export processing goods.
falls in weekends and holidays
during customs clearance procedures,
Accordingly, for process contracts
the enterprises should follow
signed before 5 June 2018 (the
guidance in Clause 1, Article 4,
effective date of Circular No.
Circular No. 38/2015/TT-BTC.
39/2018/TT-BTC) and having been
Specifically, the enterprise shall
implemented after this date, the
submit in advance a notification via
enterprise shall be required to
the e-customs data processing
notify the contracts/ appendix of
system or in writing (fax is acceptable)
contracts with respect to customs
to the customs authorities during
declarations after 5 June 2018 in
working hours. Upon receipt of the
accordance with Article 56, Circular
notification, the Customs authorities
No. 38/2015/TT-BTC, and as
are responsible for responding to
amended and supplemented under
the customs declarant through the
Clause 36, Article 1, Circular
System or in writing about the
No. 39/2018/TT-BTC.
arrangement of customs clearance
procedures during weekends and
Supplementary submission holidays and non-working hours.
of C/O within the “30 days”,
inclusive of weekends and
holidays
On 8 April 2019, the General
Department of Customs issued
Official Letter No. 2030/TCHQ-GSQL
regarding the supplementary
submission of C/O that has been
© 2019 Deloitte Vietnam Tax Advisory Co., Ltd. For reference only, not to be distributed, or sold
20
Handling of import no frauds are detected, the incorrect
declarations of processing type code is not abused, then the
incorrect declarations would be
raw materials with incorrect acceptable to use for subsequent
export type procedures on finalization reports
as prescribed.
On 4 April 2019, the General
Department of Customs issued
Classification of consumable
Official Letter No. 1929/TCHQ-GSQL
guiding incorrect declaration of materials in line with HS code
code for export type.
On 4 April 2019, the General
Department of Customs issued
Accordingly, with respect to import
Official Letter No. 1072/GSQL-GQ2
declarations for export processing
providing guidance on actual material
raw materials incorrectly declared
consumption of EPEs.
under the code E31 – importing raw
materials for export production,
Accordingly, pursuant to Clause 2,
rather than E21 – importing raw
Article 60 of Circular No.
materials for processing for foreign 38/2015/TT-BTC which is amended
traders, the Customs Division shall and supplemented by Clause 39,
verify information in the declarationsArticle 1 of Circular No. 39/2018/
agains the contracts, customs TT-BTC, in order to classify consumable
documents on import of raw materials between code A12 – import
materials and exports of products, for trading and production, and
accounting books, accounting code E11 – import by EPEs from
vouchers, warehousing bills,
overseas, and E15 – import by EPEs
ex-warehousing bills and inventories from domestic, enterprises shall be
of raw materials and finished responsible for management and
products, etc. to determine whether monitoring of raw materials,
the imported goods stated in the imported materials, exported
enterprises’ declarations withgoods from the time of importing
incorrect type code are actually and production until the time when
used for processing of exported goods are exported or changed its
goods or not. purpose, for the handling of wasted
materials, defective products, raw
In case the inspection results are materials , surplus materials,
satisfactory, confirming that the machinery, equipment, or for the
requirements for management of use and savings of imported raw
the processing types are appropriate, materials to be processed in the

For reference only, not to be distributed, or sold © 2019 Deloitte Vietnam Tax Advisory Co., Ltd.
21
production, in the accounting
systems in line with the accounting
standards issued by the Ministry of
Finance. Therefore, enterprises are
responsible for classifying and
monitoring imported raw materials
in accordance with regulations to
ensure the use of goods in consistent
with the declaration.
Enterprises should review its
purposes of use and the actual
production process to classify and
adopt the appropriate type with
reference to customs, accounting
regulations.
activities but are not converted
into exported goods;
If the following items are not
eligible to be recognized as
fixed assets, they are recognized
as tools and instruments,
including: scraffolds, boards,
molds, tools and jigs used
exclusively for construction
production, hammer, pliers,
wrenches; facilities for
management activities, office
supplies; clothes and shoes for
specialised work.

Customs declaration and

finalization report for
consumable materials and
tools

On 27 May 2019, the General

Department of Customs issued
Official Letter No. 3304/TCHQ-GSQL
providing guidance on customs
declaration and finalization reports
for "Consumables materials" and
"Tools."

Accordingly, the Official Letter

provides definitions of consumable
materials and tools as below:

Consumable materials are

materials used directly in
processing or manufacturing

© 2019 Deloitte Vietnam Tax Advisory Co., Ltd. For reference only, not to be distributed, or sold
22
The HS code of consumable With respect to the finalization
materials used in the import report of Consumable materials /
declarations should be as follows: Tools:

HS code for consumable Enterprises are required to

materials imported for prepare a finalization report
processing activities is E21; for for consumable materials.
production of exported goods Consumable materials without
E31. For EPEs, consumable consumption standards
materials imported from (norms), should be clearly
abroad and supplied from noted as "KXDĐM" with
domestic should be declared input – output – inventory report;
with types E11 and E15,
respectively; Enterprises are not required to
establish the material
The General Department of consumption standards and
Customs requires local customs submit finalization report for
divisions to announce this Tools. Particularly for EPEs,
guideline to manufacturing / Tools shall only be used for
processing enterprises (including internal purposes. The disposal
EPEs) for their consistent and of Tools must comply with
accurate declarations. Article 79, Circular No.
38/2015/TT-BTC which is
amended and supplemented
by Clause 55, Article 1 of Circular
No. 39/2019/TT-BTC.

For reference only, not to be distributed, or sold © 2019 Deloitte Vietnam Tax Advisory Co., Ltd.
23
Others
Latency period for change of
land use form is not entitled
to exemption
On 19 April 2019, the General
Department of Taxation issued
Official Letter No. 1527/TCT-CS
providing guidance on land rental
policy.
According to Decree
No. 135/2016/ND-CP, investment
projects with land leased by the State
before 1 July 2014 and application
for tax exemption submitted after 1
January 2017, would be assessed
for land rental exemption or reduction
for the remaining period from the
submission time.
In addition, the current regulations
do not specifically provide on land
rental exemption in case of late
submission of application documents
due to the procedures of converting
from land allotment to land rental.
Therefore, the General Department
of Taxation does not have sufficient
legal basis to approve the land
rental exemption for such latency
period.
On 7 May 2019, the Ministry of
Planning and Investment submitted
Official Letter No. 2933/BKHDT-DTNN
to the Government Office on the
establishment of FDI company in
the field of manufacturing medical
equipment.
Accordingly, Vietnam's commitments
in WTO would only be applicable to
provision of services, and not to
manufacturing activities. Simultaneously,
there is no prohibitions or
restrictions under Vietnam laws on
foreign investors in manufacturing
industry.
As this is a field subject to the
specialized management by the
Ministry of Health, investors are
recommended to seek further
guidance from the Ministry of
Health.

Establishment of Foreign
Direct Investment (“FDI”)
company in the field of medical
equipment manufacturing
© 2019 Deloitte Vietnam Tax Advisory Co., Ltd. For reference only, not to be distributed, or sold
24
Contacts
Thomas McClelland Bui Ngoc Tuan Bui Tuan Minh
National Tax Leader Tax Partner Tax Partner
Tel: +84 28 3910 0751 Tel: +84 24 7105 0021 Tel: +84 24 7105 0022
tmcclelland@deloitte.com tbui@deloitte.com mbui@deloitte.com

Phan Vu Hoang Dinh Mai Hanh Suresh G Kumar

Tax Partner Tax Partner Tax Partner
Tel: +84 28 3910 0751 Tel: +84 24 7105 0050 Tel: +84 28 3910 0751
hoangphan@deloitte.com handinh@deloitte.com ksuresh@deloitte.com

Vo Hiep Van An Vu Thi Thu Nga

Tax Partner Tax Partner
Tel: +84 28 3910 0751 Tel: +84 24 7105 0023
avo@deloitte.com ngavu@deloitte.com

Hanoi Ho Chi Minh City

15th Floor, Vinaconex Tower, 18th Floor, Times Square Building,
34 Lang Ha Street, Dong Da District, 57-69F Dong Khoi Street, District 1,
Hanoi, Vietnam Ho Chi Minh City, Vietnam
Tel: +84 24 7105 0000 Tel: +84 28 3910 0751
Fax: +84 24 6288 5678 Fax: +84 28 3910 0750

Website: www.deloitte.com/vn
Email: deloittevietnam@deloitte.com

For reference only, not to be distributed, or sold © 2019 Deloitte Vietnam Tax Advisory Co., Ltd.
25
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