7 July, 2016
The National Assembly has issued Law no. 106/2016/QH13 on 6 April 2016 which will comes effect from 1 July 2016 with the following notable updates:
Value Added Tax (“VAT”)
- Additional goods and services that are not subject to VAT:
- Care services for elderly and disabled people
- Exported goods that are processed from natural resources or minerals with total value of natural resources or minerals plus energy costs constituting 51% and above of the product price • Amendments, supplements to regulations on VAT refunds:
- The enterprises declaring and paying VAT under the credit method may can carry forward the input VAT that has not been credited in this month or quarter, to the next period.
The input VAT that has not been credited shall not be entitled to VAT refund but can be carried forward to the next period, in the following cases:
- An investment project that has not fully contributed its charter capital as registered; that engages in a conditional business sector but has not met the qualifying the corresponding conditions as prescribed by the Law on Investment or the fulfillment of such conditions is not maintained throughout its operation;
- Natural resource extraction projects or mineral extraction projects that are granted licenses from 1 July 2016 or manufacturing projects where the total value of natural resources or minerals plus energy costs constitutes more than 51% of the product price.
- Exported goods but not carrying-out the export procedures within a customs controlled area as prescribed by the Law on Customs.
Inspection after tax refund shall apply to manufacturers of exported goods that do not violate Law on taxation or customs for two consecutive years; and taxpayers that is not considered as high-risk in accordance with the Law on Tax Administration.
Special Consumption Tax (“SCT”)
Amendments on SCT rate for imported motor vehicles with less than 9 seats:: From 1 July 2016, motor vehicle having a cylinder capacity not exceeding 1500cm3 shall be subjected to SCT of 40% (the current SCT rate is 45%); and the SCT rate of 55% will be imposed on motor vehicle having a cylinder capacity exceeding 2500cm3 but not exceeding 3000cm3 (the current SCT rate is 50%).
Tax Administration
Tax exemption to households and individuals with annual tax liability on non-agricultural land not exceeding VND50,000. The taxpayer shall pay late payment interest on the unpaid tax at 0.03% per day (the current rate is 0.05% per day).
