Tax solutions played an important role in supporting and facilitatingenterprises to overcome difficulties, become stabilised and improvebusinesses in 2013.
With the same targets for 2014, tax policywill continue to be studied, more aggressively reformed and supplementedto solve problems for enterprises, supporting economic growth. Analysisby the Vietnam Business Forum, the weekly magazine of the VietnamChamber of Commerce and Industry (VCCI).
Reducing costs, anti-tax fraudulence
Beingeffective from January 1, 2014, the amended Corporate Income Tax (CIT)Law has more regulations to create higher preferences for enterprises,attractions and investment incentives. For example, CIT is reduced to 22percent (from 25 percent), enterprises having total earning of under 20billion VND (950,000 USD) per year had a tax rate of 20 percent fromJuly 1, 2013. These factors help enterprises to be capitalised forre-investment. Besides, CIT reduction will improve competition capacityof Vietnam in attracting foreign direct investments (FDIs).
Apartfrom CIT reduction, the amended CIT also controls and adjustsadvertisement and promotion costs from 10 percent to 15 percent of totalcost, which is highly accepted by enterprises.
“FDIenterprises mostly benefit from these preferences. But, in thedevelopment of the market, if enterprises’ products are well known bycustomers, enterprises must have big promotions and large advertisementcampaigns,” said Mac Quoc Anh, Vice President and General Secretary ofthe Hanoi Association of Small and Medium Enterprises.
Beingrecognised as a breakthrough, the Law amending and supplementing ValueAdded Tax Law (VAT Law) also adds some products and services to un-taxedproducts and services. This amendment reduces costs for taxpayers.Furthermore, it helps reduce procedures, declarations and simplifies taxmanagement activities.
According to assessment of the GeneralDepartment of Taxation, the current number of 450,000 enterprises isexpected to increase in the near future. In order to restrict someenterprises using transparent policy in establishing enterprises totrade receipts, using invoices to discount or have tax refund, leadingto bad effects on the business environment, the law amending andsupplementing the Law of Value Added Tax adds regulations: Enterpriseswith revenues from 1 billion VND and above per year will be applied VATdiscount method, and ones with less than 1 billion VND will have to payVAT directly and use sale invoice since January 1, 2014, and are notallowed to use VAT invoices.
Still some unreasonable points
Besidesthese new regulations to support, solve difficulties and createfacilities for enterprises, some unreasonable points still exist andauthorities should continue to repair and make these regulations reallybe practical.
According to some enterprises, together with finalaccounts of enterprises CIT, annually the Ministry of Finance publishescirculars guiding retroactive for previous taxes which makedifficulties for enterprises, or problems relating to procedures of VATrefunds, excise tax, costs, etc.
“Authorities need to guide morespecifically to prevent tax fraud; and for some real cases, they alsoshould create facilities for enterprises,” said Nguyen Thi Cuc, head ofthe Council of Tax Advisors.
In 2014, the two new amended andsupplemented laws are implemented with favourable policies and taxincentives. Ngo Huu Loi, Director of Tax Policy Department, Ministry ofFinance, said that although some guides need repairing, the formerly andbeing effective tax policy are designed to reduce administrativeprocedures, costs for tax payers.
However, in order to activelydeal with challenges and take advantages of opportunities, enterprisesneed have appropriate business strategy, and take this currentexperience for more steady steps ensuring competitive capacity.
Underthe request of the Vietnam General Department of Taxation, taxdepartments need propagate and explain to enterprises and co-operativesmethods of applying VAT and guide them to solutions of sales invoiceorders to use from January 1st 2014.
For cases of using directmethods and not using VAT invoice, tax agencies must recheck enterprisesnot using discount methods, and if the inappropriate use of VATinvoices is discovered, they must have right solution methods followingregulations of laws.-VNA
With the same targets for 2014, tax policywill continue to be studied, more aggressively reformed and supplementedto solve problems for enterprises, supporting economic growth. Analysisby the Vietnam Business Forum, the weekly magazine of the VietnamChamber of Commerce and Industry (VCCI).
Reducing costs, anti-tax fraudulence
Beingeffective from January 1, 2014, the amended Corporate Income Tax (CIT)Law has more regulations to create higher preferences for enterprises,attractions and investment incentives. For example, CIT is reduced to 22percent (from 25 percent), enterprises having total earning of under 20billion VND (950,000 USD) per year had a tax rate of 20 percent fromJuly 1, 2013. These factors help enterprises to be capitalised forre-investment. Besides, CIT reduction will improve competition capacityof Vietnam in attracting foreign direct investments (FDIs).
Apartfrom CIT reduction, the amended CIT also controls and adjustsadvertisement and promotion costs from 10 percent to 15 percent of totalcost, which is highly accepted by enterprises.
“FDIenterprises mostly benefit from these preferences. But, in thedevelopment of the market, if enterprises’ products are well known bycustomers, enterprises must have big promotions and large advertisementcampaigns,” said Mac Quoc Anh, Vice President and General Secretary ofthe Hanoi Association of Small and Medium Enterprises.
Beingrecognised as a breakthrough, the Law amending and supplementing ValueAdded Tax Law (VAT Law) also adds some products and services to un-taxedproducts and services. This amendment reduces costs for taxpayers.Furthermore, it helps reduce procedures, declarations and simplifies taxmanagement activities.
According to assessment of the GeneralDepartment of Taxation, the current number of 450,000 enterprises isexpected to increase in the near future. In order to restrict someenterprises using transparent policy in establishing enterprises totrade receipts, using invoices to discount or have tax refund, leadingto bad effects on the business environment, the law amending andsupplementing the Law of Value Added Tax adds regulations: Enterpriseswith revenues from 1 billion VND and above per year will be applied VATdiscount method, and ones with less than 1 billion VND will have to payVAT directly and use sale invoice since January 1, 2014, and are notallowed to use VAT invoices.
Still some unreasonable points
Besidesthese new regulations to support, solve difficulties and createfacilities for enterprises, some unreasonable points still exist andauthorities should continue to repair and make these regulations reallybe practical.
According to some enterprises, together with finalaccounts of enterprises CIT, annually the Ministry of Finance publishescirculars guiding retroactive for previous taxes which makedifficulties for enterprises, or problems relating to procedures of VATrefunds, excise tax, costs, etc.
“Authorities need to guide morespecifically to prevent tax fraud; and for some real cases, they alsoshould create facilities for enterprises,” said Nguyen Thi Cuc, head ofthe Council of Tax Advisors.
In 2014, the two new amended andsupplemented laws are implemented with favourable policies and taxincentives. Ngo Huu Loi, Director of Tax Policy Department, Ministry ofFinance, said that although some guides need repairing, the formerly andbeing effective tax policy are designed to reduce administrativeprocedures, costs for tax payers.
However, in order to activelydeal with challenges and take advantages of opportunities, enterprisesneed have appropriate business strategy, and take this currentexperience for more steady steps ensuring competitive capacity.
Underthe request of the Vietnam General Department of Taxation, taxdepartments need propagate and explain to enterprises and co-operativesmethods of applying VAT and guide them to solutions of sales invoiceorders to use from January 1st 2014.
For cases of using directmethods and not using VAT invoice, tax agencies must recheck enterprisesnot using discount methods, and if the inappropriate use of VATinvoices is discovered, they must have right solution methods followingregulations of laws.-VNA
