Topics that concern investors and businesses
In order to repatriate profits, enterprises must meet some of the following conditions:
- The company must fulfill its financial obligations to the Vietnamese state in accordance with the law;
- The company must submit fully audited financial statements;
- The company must fully submit the annual tax finalization declaration;
Investors are not allowed to remit profits abroad in the case in the financial statements of enterprises in which foreign investors invest in the year in which profits are generated and still have accumulated losses after deducting losses as prescribed by the law on corporate income tax. That is, the company must have a profit after fulfilling its financial obligations as prescribed, after deducting the loss transfer as prescribed, but there is still a profit, it can be remitted to the country.
If a company makes a profit, after fulfilling its financial obligations to the Vietnamese State in accordance with the law, the profit may be repatriated to the country. Foreigners must pay PIT from capital investment activities in Vietnam at the tax rate of 5% calculated on profits received.
PIT from the transfer of contributed capital is regulated for 2 separate subjects:
- Resident individual;
- Non-resident individuals;
For resident individuals, the personal income tax from the transfer of contributed capital is calculated by taking the income from the transfer of contributed capital x the tax rate of 20%.
For non-resident individuals, personal income tax from the transfer of contributed capital is calculated by taking the total amount of money that non-resident individuals receive from the transfer of capital in Vietnamese organizations and individuals. ×) with a tax rate of 0.1%, regardless of whether the transfer is made in Vietnam or abroad.
Declare personal income tax for the transfer of contributed capital according to each time it is generated, regardless of whether or not income is generated.
The deadline for tax declaration is the 10th (tenth) day from the effective date of the capital transfer contract.
Currently, the export tax rate of 0% applies to most items, except for restricted export items such as natural resources, minerals, and precious metals. Exported goods include goods exported to foreign countries, including export consignment; goods sold into non-tariff zones; forward processed goods; locally exported goods.
Enterprises are entitled to re-declare previously discarded invoices before the tax authority announces the decision on tax inspection and inspection at the enterprise.
According to current regulations, if an enterprise is subject to tax refund before inspection, the time to process the dossier is 06 working days, if the enterprise is subject to inspection before tax refund, then the time to process the dossier is 40 working days from the date of receipt of complete tax refund dossiers. VAT refund will be paid by the state agency through the enterprise’s bank account.
The salary as the basis for insurance payment is determined as follows:
From January 1, 2018 all wages, allowances and other benefits that employees are given in accordance with the labor law.
The salary for participation in the insurance must not be lower than the regional minimum salary prescribed by the state at the time of participation. If skilled workers have been trained, add 7%.
From January 1, 2018, the minimum wage for each region will be applied as follows:
- Minimum salary region 1: 3,980,000 VND/month
- Regional minimum salary 2: 3,530,000 VND/month
- Minimum salary zone 3: 3,090,000 VND/month
- Regional minimum salary 4: 2,760,000 VND/month
Region 1 includes the districts and districts of Hanoi City, Ho Chi Minh City, Hai Phong City, Thu Dau Mot City and the districts of Binh Duong, Bien Hoa City and the districts of Dong Nai. Regions 2 to 4 as detailed in Decree 153/2016/ND-CP.
Example: An enterprise has an investment project in Thu Dau Mot, Binh Duong province. How much does the enterprise have to pay to participate in compulsory insurance according to regulations for 1 trained worker?
Thu Dau Mot, Binh Duong province belongs to Region 1. The minimum salary as the basis for participating in compulsory insurances in Region 1 is currently:
3,980,000 VND x (1+7%) = 4,258,600 VND.
The minimum amount an enterprise must pay social insurance, health insurance and unemployment insurance premium for 01 employee in Region 1 is:
21.5% x 4,258,600 vnd = 915,599 vnd
According to current regulations, enterprises are required to participate in the following types of insurance: Social insurance (social insurance), health insurance (HI) and unemployment insurance (UI) for employees. In which, enterprises (employers) bear 22% with the rate of 18% of social insurance, 3% of health insurance, 1% of unemployment insurance, employees bear 8.5% with the rate of 8% of social insurance, respectively. 1.5% health insurance, 1% unemployment insurance calculated on the salary for participation in social insurance prescribed by the state.
Regarding this content, we would like to share as follows, the issue of CIT incentives is one of the issues that investors are interested in because it directly affects the interests of investors, while in terms of management. For many years, this problem has been difficult because the legal regulations are not really clear and easy to understand to be applied.
So to give a correct and complete answer, we need a lot of information to check and compare, however, if an enterprise has a new investment project since 2016 and is located in an industrial park then the project is entitled to enjoy corporate income tax exemption for 2 years and a 50% reduction of corporate income tax for the next 4 years.
In this content, investors want to know if your case is eligible for CIT exemption or reduction, if so, how to apply, please investors find companies specializing in the field of tax consulting, auditing for advice for each specific case.
The inspection of tax finalization at enterprises depends on many factors, the first is the inspection plan of the tax authorities, the second depends on the declared data of the unit, whether it is transparent and clear enough or not. and many other factors.
But normally, every 2 years or 3 years, the tax office will conduct a tax finalization check at the enterprise.
The time limit for tax inspection is 5 days from the date of publication of the inspection decision, if it is an inspection decision, and if it is an inspection decision, the time is longer, up to 30 days from the date of publication of the payment decision. check.
| Submission deadline | Deadline for submission | Businesses declare VAT quarterly | Businesses declare VAT monthly |
|---|---|---|---|
| Monthly | 20th of every month |
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| Quarterly | The 30th day of the first month of the following quarter. Specifically:
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| Yearly | March 30th |
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There are many types of taxes that an FDI company must pay, depending on which tax law governs it, however most companies are subject to the following taxes:
Value Added Tax (VAT)
Quarterly VAT declaration applies to enterprises with total revenue of sales and service provision of the preceding year of VND 50 billion or less; vice versa, >50 billion is subject to monthly VAT declaration;
After full 12 months of production and business, from the next calendar year, they will base on the turnover of the preceding calendar year to make a declaration. VAT monthly or quarterly;
The deadline for payment is the 20th day of the following month if VAT is declared monthly, and no later than the 30th day of the first month of the following quarter if VAT is declared quarterly.
Personal Income Tax (PIT)
Enterprises that declare VAT quarterly shall declare PIT quarterly;
Enterprises that declare VAT on a monthly basis will consider two cases:
- If the payable PIT amount is >50 million in the month, the monthly declaration shall be made;
- If the payable PIT amount is <50 million in the month in which the payable PIT amount is incurred, it shall be declared quarterly;
The deadline for payment is the 20th day of the following month if declaring PIT monthly, and no later than the 30th day of the first month of the following quarter if declaring PIT quarterly.
Corporate Income Tax (CIT)
Enterprises do not need to submit temporary declarations on a monthly or quarterly basis, but only rely on financial statements and estimate CIT expenses for temporary payment and finalization at the end of the year.
The deadline for submitting the CIT finalization report is the 90th day from the end of the fiscal year.
Business License Tax
For newly established enterprises, the deadline for payment is the last day of the month of starting production and business activities;
If it is newly established but has not yet started production and business, the deadline for submission is within 30 days from the date of receipt of the business registration certificate;
For businesses that have been operating, the deadline for paying license tax is January 30 every year.
Personal income tax in Vietnam is calculated based on whether the taxpayer is an individual residing or not residing in Vietnam and based on the nature of the income.
For example, if it is income from wages and salaries, there are 2 cases, if it is a resident, it is calculated on the progressive tax schedule, the lowest is 5%, the highest is 35%, if If you are a non-resident individual, you will be charged a specific tax rate of 20%. Therefore, investors need to study carefully in the personal income tax section at section 7, page 14 of this handbook to look up.
The current corporate income tax rate of Vietnam is 20%.
Common tax rates of VAT are 0%, 5%, 10%
Normally, depending on the field of business activities, investors will apply different taxes, however, for foreign investors in Binh Duong in particular and Vietnam in general, most investors will subject to the following taxes:
- Import Tax
- V.A.T tax
- Corporate income tax
- Personal income tax
- Contractor Tax
- Business license tax
- Environmental Protection Tax
According to current regulations, if a business hires a company to provide accounting services that are not qualified to practice accounting, your business will be fined from VND 5,000,000 to VND 10,000,000.
According to current regulations, enterprises can organize their own accounting apparatus or hire an accounting service company to perform accounting work. However, the company providing accounting services must be a company licensed to practice accounting according to the regulations of the Ministry of Finance. Currently, there are many companies that provide accounting services but are not qualified to practice accounting. Investors can check the capacity of companies that are allowed to provide accounting services on the website of the Ministry of Finance. finance at the link mof.gov.vn.
According to current regulations, people working as chief accountants must have at least professional accounting qualifications, have an accounting intermediate degree or higher, and have a certificate of training for chief accountants. If the appointment of chief accountant does not meet the conditions, the enterprise will be fined from VND 10,000,000 to VND 20,000,000 according to current regulations.
According to current regulations, before an invoice is put into use, an enterprise must make a notice of invoice issuance and send it to the tax agency at least 05 working days before the enterprise starts using the invoice. If the enterprise has not made the notice of invoice issuance to the tax authority, but the enterprise uses the invoice, the enterprise will be fined from VND 6,000,000 to VND 18,000,000.
Invoices are shown in Vietnamese characters. For export invoices or other invoices that need to include foreign words, the foreign words are placed on the right side in parentheses () or right below the Vietnamese words and the size is smaller than the Vietnamese font size.
Most newly established FDI enterprises will fall into the subject of being ordered to print VAT invoices. The procedures for ordering VAT invoices are as follows:
- Make an application for the use of printed VAT invoices to the tax authorities;
- fter 05 working days, if the tax authority does not give a written opinion, the enterprise is allowed to use printed VAT invoices;
- The tax authority will visit the taxpayer’s office address to verify the location;
- Find a printer: The printer must have certain conditions, investors can check the printer’s conditions on the website of the provincial tax department;
- Prepare invoices for printing orders;
- Liquidation of the printing contract: After the customer receives the VAT invoice from the printer, he must carry out the procedures for liquidating the printing contract with the printer according to regulations, investors should note this point or else will be fined;
- Procedures for notification of invoice issuance to tax authorities before use: Within 05 days before using VAT invoices, enterprises must make invoice issuance notices and send them to tax authorities.
According to the current regulations, enterprises must notify the management agency on business registration (Provincial Department of Planning and Investment for FDI enterprises) of information related to enterprise information, even if there are additional information changes. Investors should pay attention to this point to promptly notify the business registration authority.
After obtaining the investment certificate, the investor needs to carry out tax registration procedures with the tax authority directly within 10 working days from the receipt date of the investment certificate. Basic information in registration documents: Business name, address, business lines, financial year, legal representative information. This information is required to be registered with the tax authority according to regulations. The tax administration agency that directly manages foreign-invested enterprises (FDI) is the Provincial Tax Department.
We would like to quote documents from Vietnam Bank for Foreign Trade (VCB) need:
- Certificate of establishment of the company in a foreign country: The original is required for consular legalization, if it is not in English, a Vietnamese translation must be enclosed with the original consular legalization;
- In case the Certificate of Establishment does not specify the legal representative (the head of the company), the profile of the head must be provided: Original consular legalization request, if not in English, must have a Vietnamese translation together with the consular legalized original;
- assport + Visa: Requires to bring the original for comparison at the Bank if directly present in Vietnam or if not in Vietnam, consular legalization is required;
- Fill out some sample forms at the request of VCB’s management;
According to the State Bank’s current regulations, before being granted an investment certificate, foreign investors are allowed to transfer investment capital into Vietnam to meet the legal expenses for the investment period under the written agreement of the related parties and through their foreign currency payment accounts opened at authorized banks. That is, the investor can open a “temporary” account at a commercial bank, then transfer the investment capital to serve the costs of the investment preparation stage, after the investor is granted a license. With an investment certificate, the investor must open a capital account in a foreign currency, then the “temporary” account will be closed.
Investors should not transfer money directly from individual accounts or organizations abroad to pay for large investment expenses such as land rental costs, project implementation costs, etc. to organizations in Vietnam.
This content is very important, investors should pay attention to comply with regulations on management of direct investment capital in Vietnam.
Depending on the type of business that the investor establishes, it will decide what the profile includes, here we would like to answer the business establishment profile for the type of LLC with 2 members or more.
Dossier of application for establishment includes:
- Business registration application form;
- Members list;
- Company rules;
- Valid copies of the following documents:
- Valid passport in case the founder is an individual;
- Establishment decision or Enterprise registration certificate if it is an organization;
- Valid passport of the authorized representative and the corresponding power of attorney;
- Declaration of applicant information
Processing time: 03 days from the date of receipt of valid application
Settlement result: Certificate of business registration
To simplify the answer, we would like to answer the investment registration procedure for projects not subject to investment policy decision as follows:
Application documents include:
- A written request for implementation of an investment project;
- Copy of passport for individual investors; a copy of the Certificate of Establishment or other equivalent document certifying the legal status of the investor being an organization;
- Investment project proposal includes the following contents:
- Investor implementing the project
- Investment objective
- Investment scale
- Investment capital and capital mobilization plan
- Location
- Duration
- Investment progress
- Labor demand
- Proposing investment incentives, impact assessment
- Socio-economic effects of the project
- Copy of one of the following documents:
- Financial statements for the last 2 years of investors
- Commitment to financial support of the parent company
- Commitment to financial support from a financial institution
- Guarantee of investor’s financial capacity
- Documents explaining the financial capacity of investors
- Proposing land use demand for projects requesting land allocation, land lease or permission to change land use purpose by the State; If the project does not request the State to allocate or lease land or permit the change of land use purpose, a copy of the location lease agreement or other document certifying that the investor has the right to use the site for implementation of the project must be submitted to implement the investment project;
- An explanation of technology use for projects using technologies on the List of technologies restricted from transfer in accordance with the law on technology transfer (Point b, Clause 1, Article 32 of the Investment Law 2014) includes: contents:
- Technology name, technology origin, technological process diagram
- Main technical parameters, using status of main machines, equipment and technological lines
Time to process dossiers as prescribed: 15 days from the date of receipt of valid dossiers
Result of settlement: Investment certificate
After completing the procedures for signing a land lease contract, the next step is for the investor to carry out the procedures for registering the investment project with the Management Board of the Industrial Park where the project is implemented and to register the establishment of an enterprise with the Provincial Department of Planning and Investment. The result of this step is the Investment Certificate and the Business Registration Certificate.
After being approved by the state management agencies on the policy for project implementation at a location outside the industrial park, the next step is to carry out the procedures for signing a land lease contract with the Department of Planning and Investment. environmental resources for project implementation.
Investors can conduct investment projects inside or outside the industrial park. However, if it is outside the industrial park, the requirements are more difficult than in the industrial park, because the investor must obtain the approval of the investment policy of the state management agency for the project at the proposed location. declare.
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