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MINISTRY OF FINANCE
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SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
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No.
17526/BTC-TCT
RE:
Implementation of some contents of the Law on Amendments to tax laws
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Hanoi, December 01, 2014
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To:
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On November
26, 2014, the Law on Amendments to tax laws, which takes effect on January 01,
2015 is passed by the 13th National Assembly of Socialist Republic of Vietnam
on November 26, 2014 during the 8th session.
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1. Important amendments that need to preparation within
December 2014 and in order to be put into operation from January 01, 2015
1.1. Changes in personal income tax (PIT) incurred by sole
traders
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- From
January 01, 2015, according to the Law on Amendments to tax laws, sole traders
shall pay PIT directly on their incomes from the following activities:
+
Distribution, supply of goods: 0.5%;
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Asset
lease, insurance brokerage, lottery brokerage, multi-level marketing brokerage:
5%;
+
Manufacturing, transport, services associated with goods, construction
inclusive of building materials: 1.5%.
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1.2. Other changes in PIT
a) From
January 01, 2015, PIT on the following incomes are exempt:
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- Incomes
from provision of goods/services directly serving offshore fishing earned by
individuals being ship owners, individuals having the right to use ships, and
incomes of crewmembers on ships.
b) With
regard to incomes of individuals from securities transfer
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c) With
regard to incomes of individuals from real estate transfer
From
January 01, 2015, 2% tax shall be imposed on the value of each real estate
transfer instead of applying the 02 previous methods.
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- Building
of ships serving offshore fishing is not subject to VAT.
- Three
groups of goods including fertilizers, animal feeds, specialized machinery and
equipment serving agricultural production, which were previously subject to 5%
VAT, are now no longer subject to VAT.
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- Natural
water used for agriculture, forestry, aquaculture, and salt production are now
no longer subject to severance tax.
2. Regulations on tax administration applied sole traders
to be carried out within December 2014 in order to be put into operation from
January 01, 2015
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According to the Law on Tax administration, in December
2014, the People’s Committees of districts, Sub-departments of taxation shall
instruct every business households and sole traders to implement important
contents of the Law on PIT; print, hand out fliers, and instruct business
households and sole traders to declare their revenue, which is the basis to
determine the flat tax in 2015. Particularly:
a) Tax incurred by business households and sole traders:
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- Determination of tax:
Monthly tax = (revenue subject to PIT in 01 month x PIT
rate) + (flat revenue subject to VAT x VAT rate).
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Business households and sole traders shall declare their
revenue in order to determine flat tax in 2015 using form 01/THKH enclosed
herewith.
Provincial Departments of Taxation, the People’s Committees
of districts shall instruct Sub-department of taxation to cooperate with
economics departments of communes to carry out on-site inspections to verify
the revenues in each commune, each trade, especially those who provides food
and drink services, transport services, trading, etc. in order to determine the
correct taxable revenues of business households and sole traders, ensuring:
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+ Ensure
achievement of budget revenue targets 2015 set by the People’s Council of
provinces and districts.
+ The
revenue is congruous with the scale, scope of business, sufficient to cover
investment costs and operating costs (rent for premises or the equivalent,
costs of materials, electricity and water supply, cost prices of goods being
sold; labor costs, and wages of employees, etc.)
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According
to tax declarations submitted by business households and sole traders, survey
result, minutes of meeting with the Tax Advisory Council, feedbacks on flat tax
and revenues posted, and requests of Provincial Departments of Taxation,
Sub-departments of taxation shall make and approve Tax registers before January
15, 2015. According to the approved Tax registered, Sub-departments of taxation
and Provincial Departments of Taxation shall post information about taxpayers
paying flat tax on the websites of tax authorities before January 30, 2015.
c)
Sub-departments of taxation shall examine the business households and sole
traders paying flat tax using previous methods and request them to apply for
company registration if they hire 10 employees or more as prescribed by Company
law. If the requirements for company establishment are not satisfied, business
households and sole traders paying flat tax shall declare tax using form
01/THKH.
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a) Tax on lease of assets by households and individuals
coming into force from January 01, 2015.
- If an
individual has a lease contract which is effective for many years and has
declared, paid tax according to previous regulations, the tax declared and paid
shall not be adjusted.
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Every
lessor shall declare tax only once on each lease contract, and pay tax directly
according to the payment term on the contract to State Treasury or a commercial
bank authorized by the State to collect government budget revenues as
instructed by General Department of Taxation.
b) Tax
administration regulations of Provincial Departments of Taxation and
Sub-departments of taxation applied to lease of assets.
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- According
to land prices imposed by the People’s Committees of provinces, construction
prices, house rents, average rent for real estate, vehicles, and other assets,
Provincial Departments of Taxation and Sub-departments of taxation shall
develop a database of rents for real estate and assets in each province and
district, sorted by street and type of asset (car, ship, etc.). The database is
the basis for tax administration, determination of risks, and consultation on
tax inspection with regard to lessor.
Above are
some regulations that need implementing within December 2014 in order to be put
into operation from January 01, 2015. The Ministry of Finance hereby requests
the People’s Committees of provinces to instruct Provincial Departments of
Taxation, the People’s Committees of districts, and relevant agencies in
promptly implementing the Law on Amendments to tax laws. The Ministry of
Finance requests Directors of Provincial Departments of Taxation and
Sub-departments of taxation to provide training for their officials, organize
propagation, and instruct every taxpayer to implement important contents of the
Law on Amendments to tax laws.
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