At ANT Lawyers, our tax consultants keep track of changes of Vietnam tax regulations to provide latest updates and best services to our Client. There have been significant supplements and adjustments on Vietnam Tax Law that has been promulgated and to be effective from Jan 1st, 2014. The aim of changes is to overcome the drawbacks of the current VAT act and the effect of the Law amending and supplementing a number of articles of the Law on Corporate Income Tax. On Jun 19th, 2013, the National Assembly passed Law No. 31/2013/QH13, amending and supplementing a number of articles of the Law on VAT.
1. Supplement additional provisions of Article 5 of the Law on VAT about objects are not subject to VAT: a) personal insurance, agricultural insurance; b) insurance on vessels, equipment and other necessary tools for direct fishing; c) loan services of taxpayer whom are not credit institutions, debt traders, foreign currency traders; d) collateral of debt sold by state organization that has 100% of the state-owned authorized capital established by the Government to deal with bad debt of Vietnam credit institutions.
2. Tax rate: a) supplement list of goods and services for export qualified for 0 % tax rate; b) leasing, renting, selling social houses shall be subject to tax rate of 5%. This supplement takes effect on 01/07/2013; c) tax rate of 10% of VAT shall be cut by 50% for leasing, renting and selling commercial houses with area floor of less than 70 m2 and their selling price is lower than 15 million VND per sqm. This changes of Tax laws will play an important role in reducing storage of supply in the real estate field as well as supporting low-income people who are in need of accommodation.
3. On the VAT registration threshold and the tax calculation method: a) supplement regulations that businesses have revenues below 1 billion / year to pay VAT by direct methods, unless there is a voluntary registration to apply this method (paragraph 5 of Article 1 of the Law); b) supplement provisions on VAT based on revenue percentage for i) distribution, delivery the goods: 1%; ii) production, transportation, services associated with goods, building materials including the supply of materials: 3%; iii) services, construction not including the supply of materials: 5%; iv) other business activity: 2%.