pwc vietnam newsbrief · the proposal is expected to be submitted for the national assembly's...
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www.pwc.com/vnPwC Vietnam NewsBrief
At a glance...The proposed changes primarily focus on simplifying tax administration and increasing tax inspections. Some changes are also proposed to achieve consistency with changes in other regulations.
29 November 2017
The Government has issued a draft law to replace the current Law on Tax Administration
The proposal is expected to be submitted for the National Assembly's consideration at the 1st and 2nd sittings in 2018 and the 1st meeting in 2019. The draft tax admin law is expected to become effective on 1 January 2020 or 1 July 2020.
Below are some key notable points in the draft law:
• Specialised industries:
Detailed guidance for tax management for some specialised industries such as e-commerce, hydro-electricity, telecommunications, airlines, oil and gas industries. This includes:
Changes in relation to e-commerce:
− Payments for cross-border transactions are required to be processed through a domestic channel (i.e. National Payment Corporation of Vietnam – “NAPAS”). The tax authorities thereby aim to manage revenue from such transactions to tax foreign e-commerce enterprises.
− The foreign e-commerce enterprise will be required to establish a representative office in Vietnam.
• Cooperation between the Vietnamese tax authorities and international tax authorities:
Increase the activities of tax authorities in international co-operation, i.e. co-operate in information exchange and technical sharing, tax collection in line with international agreements where Vietnam is a member.
• Social insurance:
Reduce time for tax and social insurance (“SI”) declarations/audits by tax authorities taking responsibility to collect tax and SI together (i.e. only one consolidated tax and SI return).
• Electronic management:
More focus on applying electronic methods.
Speed up electronic transactions of individuals and make the admin procedures more convenient by requiring relevant authorities to co-ordinate with tax management agencies in building/ sharing a mutual database for tax management.
• E-invoicing:
Implement regulations on requirement for using e-invoices/ e-documents. It is not clear how these regulations will interact with the planned new decree on invoicing. See also our recent Newsbrief dated 20 September 2017 in relation to e-invoicing.
• Tax declaration procedures:
Changing the tax declaration procedures, including inter alia a change in the form of financial statements to integrate the CIT final return into the financial statements.
• Tax inspection and tax disputes:
Allow taxpayers to amend a tax declaration in case the scope of a tax inspection does not cover the particular type of tax/period for which the declaration needs to be amended.
Align tax regulations with the Law on Disputes and protect the dispute rights of taxpayers, including rights of dispute and legal proceedings, information provision during the dispute procedures, and consulting with other relevant authorities during the handling of disputes.
Enhance tax inspection functions, in particular applying tax risk management methods and provide guidance on timelines for tax inspection (notably, the duration of a tax inspection can be up to 360 working days).
• Tax collection and tax debt written off:
Amend and supplement the provisions on write off of tax liabilities in various cases.
Simplify tax enforcement procedures in order to speed up collection of tax debts from taxpayers.
Update provisions on tax payment to match with the Law on Disputes and Customs regulations to ensure tax payment deadlines are consistently interpreted by taxpayers and the tax departments to reduce late payment interest.
• Tax violations:
Introduce various new provisions in relation to tax violations.
• Tax refund:
Regulations on tax refund, including cases entitled to tax refund, electronic method to submit tax refund dossiers and responsibility of the tax authorities in handling tax refund claims.
• Related party transactions:
Provide guidance on tax management for enterprises having related party transactions, including: declaration requirements, related party pricing, and submission of Country by Country report of the parent company. It is however not clear how these regulations will interact with the transfer pricing decree which became effective earlier this year.
• Tax code registration procedures for individuals:
Simplify admin procedures for individuals by using an individual identification instead of current tax code.
This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. For further information, please reach out to us:
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