If the depreciated costs of the server placed outside Vietnam fully meet the conditions specified in Article 4 of Circular No. 96/2015/TT-BTC, they shall be subtracted upon calculation of enterprise income tax (EIT).
With regard to costs for hiring the performance of services relating to the server system outside Vietnam, if they meet the conditions in Article 4 of Circular No. 96/2015/TT-BTC, they shall be also accounted into deductible expenses.
However, if the company does not have enough legitimate documents proving that the server placed outside Vietnam belongs to its ownership, the Company is not allowed to make depreciation account with regard to this server system.
Accordingly, project of expansion investment shall be also entitled to exemption from import duty on goods imported to form fixed assets.
However, the current Law on import and export duties does not regulate duty exemption policy applicable to goods imported for replacement, renewal of technologies of projects eligible for investment incentives.
According to Clause 1 Article 14 of Circular No. 219/2013/TT-BTC, point a Clause 2.2 Article 4 of Circular No. 96/2015/TT-BTC, for fixed assets being housing, enterprises are only allowed to make cost accounting, deduct tax with regard to “recreation rooms” and “houses for workers”.
Accordingly, if the enterprise buys the apartment for foreign experts who do not sign labor contract to stay or for its branches’ employees to rest during meetings, expenses of buying such apartment shall not be included in deductible expenses and input VAT shall not be deducted.
1. Specialized vehicles used in technological line directly serving manufacturing activities of investment projects.
2. Specialized vehicles used for petroleum activities.
3. Vehicles in the technological line directly serving shipbuilding activities.
4. Specialized machinery, equipment, parts and supplies serving scientific research and technological development.
5. Specialized machinery, equipment, parts and supplies serving development of technology incubation and science and technology enterprise incubation.
6. Specialized machinery, equipment, parts and supplies serving technological innovation.
In addition, this Circular also promulgates List of scientific documents serving scientific research, technological development, science and technology enterprise incubation and technological innovation to be considered for duty exemption (Article 9).
Accordingly, with regard to specialized vehicles used in technological line directly serving manufacturing activities of investment projects, criteria for identification of import duty exemption basically are not changed. However, this Circular enlarges scope of duty exemption towards movable equipment having a particular structure to perform some certain functions in addition to the transport function.
This Circular takes effect from June 1st, 2018 and replaces Circular No. 01/2014/TT-BKHCN dated February 18th, 2014.
Accordingly, when a company uses its supplies, equipment to contribute capital for establishing an enterprise, it is not required to make invoices as well as declare and pay VAT.
The dossier of capital contribution only requires these documents: a written record of the capital contribution, written record of the valuation of the assets enclosed with a dossier set on the origin of the assets.
Accordingly, with regard to a project provided with investment incentives, Clause 3 Article 14 of Decree No. 134/2016/ND-CP only regulates on import duty exemption policy applicable to machinery, equipment imported to form fixed assets serving manufacturing activities of the project; it is not exempt from import duty on equipment serving recreational and entertaining activities.
Therefore, in the case an enterprise imports equipment for a project located in an area provided with investment incentives for serving recreational and entertaining activities rather than serving the manufacture purpose, it shall not be exempt from import duty.
Accordingly, in order to determine whether the activity of transfer of the "Project on investment in construction of a hi-tech garment and textile factory” is exempt from VAT or not, enterprises have to base on Article 45 of the Investment Law No. 67/2014/QH13 and Clause 4 Article 5 of Circular No. 219/2013/TT-BTC.
If the transferred project is within the investment phase not yet put into operation, meets the conditions on transfer of investment projects and the transferee continues performing the project’s objective which is for the purpose of manufacturing and trade of VATable goods and services, VAT may be exempt.
Accordingly, if an enterprise itself constructs housing in order to free provide for its employees working in industrial zones, the benefits of housing, electricity and water supply and other associated services (if any) shall not be subject to the PIT withholding.
In the case an enterprise buys a flat in order for foreign experts to stay during their working period in Vietnam, if in labor contracts indicate that the enterprise takes responsibility to allocate accommodations for the foreign experts and such foreign experts’ salaries are exclusive of housing cost, such flat shall be made the depreciation account and the depreciated cost shall be included in reasonable expenses.
Accordingly, highly risky property due to natural disasters, fires and other force majeure events shall be managed through insurance or other instruments (Clause 2 Article 6).
Regarding form of use of public property, this Law supplements the form of provision of fixed funding for the use of public property which shall apply to official-duty houses, cars for transporting officials, cars serving general business of state authorities and other property in accordance with policies on management and use of each type of public property (Article 33).
Cases in which public property shall be withdrawn: A workplace has not been operated continuously for over 12 months; Property is used for improper purposes or lent; Property is used for commercial purposes, for lease or for joint venture purposes illegally (Article 41).
In addition, this new Law also supplements regulations on use of public property that the State assigns enterprises to manage. Accordingly, with regard to property that the State assigns enterprises to manage without capital contribution, the enterprises are banned from using the assigned property to ensure fulfillment of civil obligations, contribute capital or transfer ownership to another entity (Article 99).
This Law takes effect from January 1st, 2018 and replaces the Law on management and use of public property No. 09/2008/QH12 dated June 3rd, 2008.