The National Assembly of Vietnam has approved the law number 71/2014/QH13 amending and supplementing certain articles of Law on taxes dated 26 November 2014. The law will take effect from January 1st, 2015.

1. VIETNAM AMENDS LAW ON TAXES
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Vietnam Amends Law on Taxes
The National Assembly of Vietnam has approved the law number 71/2014/QH13 amending and
supplementing certain articles of Law on taxes dated 26 November 2014. The law will take effect
from January 1st
, 2015.
According with said law, there are some changes as below:
A. Corporation Income Tax (“CIT”)
1. Vocational educaton expense will be treated as taxable expenses;
2. Removing the cap of 15% for advertisng and promotion costs in taxable expenses;
3. Tax rate of 15% will apply for the business operating in following industries:
a. Farming, livestock production;
b. Processing in Agricultures and Fisheries (not located in social or geographical
difficulties or extremly economic conditions, it’s not apply tax incentives in
previous);
4. Taxe rate of 10% for 15 years (tax examption for 4 years and 50% tax deduction for the
following 9 years) will apply for below investment projects:
a. New investment projects that make products in the list of industrial supporting
priotized for development which might meet one of below conditions:
i. Industial products supporting for high technology sector according to the
Law on high technologies;
ii. Industrial products supporting for the sectors of textile garment; leather-
footwear; electronic – IT, manufacturing – automobiles assembly; mechanics
that until January 1st
, 2015 are not produced domestically, or having been
produced domestically but meet the technical standards of EU or
equivalents;
The list of industrial supporting products priotized for development shall be
regulated by the Government.
b. Investments projects in manufacturing sector (excluding the products are subject of
special sale tax , or mining projects) have the investment capital scale of at least
12,000 billions, with the disbursement time of no later than 5 years and using
technologies subject to the evaluation according to the Law on high technologies,
Law on science and technologies.

2. VIETNAM AMENDS LAW ON TAXES
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5. Supplimenting the principle for application of CIT incentives, accordingly the corporate
have investment projects which are entitled of CIT inventives according to CIT regulation at
licensing time. In case CIT regulation change and coporate meet the incentive condition
according to the amended or new regulations, the corporates are allowed to take opinions
between enjoying incentives according to anyone of said regulations.
B. Personal Income Tax (“PIT”)
1. Changes in the percentage of personal income tax on gross turnover
The individuals will pay their private business turnover with the tax rate as below:
Business activities Tax rate on
turnover
- Goods distribution 0.5%
- Manufacturing, transportatio,
construction cover material cost, services
including provide goods
1.5%
- Services, construction without material
cost
2%
- Assets leasing, insurance agents, loteries
agents, multi-level sale agents
5%
- Other business activities 1%
2. The incomes are subjects of tax exemption
- Income from salaries and wages of the crew members who work in Vietnam for foreign
carrier or Vietnam carriers conducting international transport;
- The income of the individual is the ship owner, individuals have the right to use the ship
from the provision of goods and services directly serve for fishing in offshore and income of
the crew members working on the ship;
- Removing wining prizes from casino from taxable subjects of persional Income Tax;
- Annual turnover of private busniess of VND100 million or below is subjects of tax
exemption;
3. Tax on the transfer of securities
Tax rate of 0.1% of turnover will apply for the transfer of sercurities activities instead of
implementing 2 (two) tax calculation methods in previous.
4. Tax on the transfer of real estatte
Tax rate of 2% of turnover will apply for the transfer of real estate activities instead of implementing
2 (two) tax calculation methods in previous.

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C. Value Added Tax (“VAT”)
1. The offshore fishing will not be subject of Value Added Tax;
2. Moving 3 group of products which were subject of VAT rate of 5% to products will not
subjects of VAT. These group prducts include fertilizers; Animal feed, poultry and
livestock; Machinery and equipment used exclusively for agricultural production
D. Tax Administration
1. Removing regulation on the monthly and quaterly report of the list of VAT invoices using
(output and input VAT invoices);
2. Spot rate is used to convert the foreign currencies transaction for taxable revenue, taxable
expenses, taxable price and tax payment to the Government. It replaces for the average
inter-bank rate in previous.
3. Removing the 0.07% penalties per day for late submittion and payment exceeding 90 days.
The rate of 0.05% per day will be consistency applied for late submittion and payment.
For more information, please contacts
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consultation with professional advisors.
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