Foreign Investment Protection Measures
Some foreign invested enterprises (“FIEs“) have recently raised concerns regarding the impact of the Global Minimum Tax (“GMT“) policy on Vietnam’s investment environment. According to the FIEs, implementing the GMT policy would result in the elimination or limitation of tax incentives granted to FIEs, in the same way as what retroactive tax policies did to the business expansion efforts of FIEs in the past. To address these concerns, the General Department of Taxation confirmed that a decree relating to the GMT policy for the establishment of an investment support fund to stabilise invesment environment, attract strategic foreign investors and multinational groups, and support domestic enterprises has been drafted for public opinion.
Application of VAT Rate to Goods
The Ministry of Finance has issued Circular No. 25/2024/TT-BTC dated 23 April 2024 (“Circular 25“) abolishing Circular No. 83/2014/TT-BTC guiding the VAT rate application to goods dated 26 June 2014. Circular 25 takes effect on 8 June 2024.
Amendments to VAT Regulations – Update
The Vietnam government has issued Resolution No. 49 dated 17 April 2024 regarding the draft new Law on value-added tax (“VAT“). Some notable points set out in the resolution are set out below:
- Goods and services that are VAT exempt: The Ministry of Finance (“MoF“) will review the current list of goods and services that are VAT exempt and supplement this list if necessary.
- Export services that are subject to 0% VAT: MoF to refer to other countries’ VAT regulations for purposes of establishing the criteria and classification rules to determine the export services that are subject to 0% VAT.
- VAT refund: MoF will establish the detailed rules of VAT refund in instances of (i) change of enterprise ownership; (ii) enterprise conversion; (iii) mergers and acquisitions (M&A); (iv) separation; and (v) dissolution of enterprise.
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