Project Finance Advisor
Partner
The Tax Department has issued specific guidance on corporate income tax (CIT) related to capital transfer activities in Official Letter No. 159/CT-CS, dated March 14, 2025.
Specifically, a company sold its wholly owned single-member limited liability company (LLC) in the form of a capital transfer that included real estate assets. The company is currently facing difficulties in determining how the income from this transaction should be declared and what CIT rate should be applied.
The Tax Department emphasized the following principles for determining taxable income from capital transfers: If a company sells its wholly owned single-member LLC in the form of a capital transfer that includes real estate, the transaction must be declared and taxed as a real estate transfer rather than as a capital transfer. Accordingly, the applicable CIT rate for this type of transaction will be the same as that for real estate transfers, which is 20%.
Thus, based on the Tax Department’s guidance, businesses conducting capital transfers involving real estate assets within a single-member LLC must declare and pay CIT at the rate applicable to real estate transfers.
DISCLAIMER
Legal News from Aliat Legal is provided for general informational and reference purposes only and should not be considered a legal opinion nor relied upon in lieu of specific advice. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication. Please contact us for further details on which you have concern.
Main office: 27-31 D7 Street, An Khanh Ward, Thu Duc City, Ho Chi Minh City
Telephone: 19005555338 | Fax: [+84 28] 3519 4668
Email: contact@aliat.group
Website: www.aliat.group
On March 14, 2015, the Tax Department – Ministry of Finance issued an official letter addressing inquiries related to deductible expenses for corporate income tax (CIT) purposes. Specifically, the guidance pertains to the treatment of one-time lump-sum land rental payments and management fees for leased land that has not yet been utilized for production and business activities. The issue raised was whether land rental expenses for leased land that has not yet been put into use for business operations could be considered deductible when determining taxable income for CIT purposes.
According to the Tax Department, under current regulations, a business expense is deductible when calculating taxable income if it meets the following conditions: Firstly, the expense is actually incurred and relates to the company’s production and business activities; Secondly, the expense is supported by legitimate invoices and documentation as required by law; Thirdly, for expenses where an invoice is issued for a single purchase of goods or services valued at VND 20 million or more (including VAT), non-cash payment proof is required.
Based on this interpretation, the Tax Department holds that land rental expenses for leased land that has not yet been used for business activities do not satisfy the first condition above. Consequently, such expenses cannot be considered deductible at the time the leased land remains unused for production and business purposes. In other words, only when the leased land is put into use for business activities can the company recognize land rental expenses as deductible when calculating taxable income.
DISCLAIMER
Legal News from Aliat Legal is provided for general informational and reference purposes only and should not be considered a legal opinion nor relied upon in lieu of specific advice. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication. Please contact us for further details on which you have concern.
Main office: 27-31 D7 Street, An Khanh Ward, Thu Duc City, Ho Chi Minh City
Telephone: 19005555338 | Fax: [+84 28] 3519 4668
Email: contact@aliat.group
Website: www.aliat.group
Recently, the Ministry of Finance has announced and solicited public and business feedback on the draft Decree detailing the implementation of certain provisions of the Law on Value-Added Tax (“Draft“). The Draft introduces several noteworthy amendments, including the following:
Proposal to expand the scope of agricultural products exempt from value-added tax (“VAT”)
Under current regulations, one category exempt from VAT includes unprocessed or minimally processed products from cultivated plants, planted forests, livestock, aquaculture, and fishing. Minimally processed products are defined as those that have undergone minimally processing methods such as cleaning, drying, shelling, dehusking, cutting, salting, refrigeration, and other common preservation methods.
To support businesses in the agricultural sector, the Draft proposes expanding the definition of minimally processed agricultural products. Specifically, products that undergo the following processes will still be considered VAT-exempt: coarse milling, partial grinding, dehusking, polishing, husk removal, trimming, milling, polishing grains, glazing grains, separating into parts, deboning, chopping, skinning, crushing, flattening, airtight canning, sulfur dioxide preservation, chemical preservation to prevent decay, and soaking in sulfur solutions.
Proposal to clarify VAT calculation in specific cases
To minimize inconsistencies between businesses and tax authorities regarding VAT calculation, the Draft proposes additional provisions clarifying VAT calculations for specific scenarios.
According to the Draft, the taxable price for asset leasing services will be the rental price agreed upon in the lease contract. If the contract specifies a lump-sum payment for the entire lease term, the payment will be allocated to each taxable period accordingly.
For goods processing services, the VAT-taxable price will be the processing fee stipulated in the processing contract, including labor costs, fuel expenses, material costs, and other expenses incurred in processing the goods.
For construction and installation activities, the Draft provides two scenarios for determining VAT-taxable prices. If the construction contract includes materials, machinery, and equipment, the taxable price will consist of both the service fee and the value of the materials and equipment. If the contract does not include materials, machinery, and equipment, the taxable price will cover only the construction and installation service fee.
Proposal to require non-cash payments for invoices from VND 5 million for VAT deduction
Under current regulations, one of the conditions for VAT input tax deduction on purchases of goods and services exceeding VND 20 million is that businesses must provide proof of non-cash payment. However, the Draft proposes lowering this threshold to VND 5 million.
If this proposal is approved, purchases of goods and services with a single transaction value of VND 5 million or more (instead of the current VND 20 million) must have non-cash payment proof to qualify for VAT input tax deduction.
Clarification of non-cash payment documents
To ensure consistency in interpretation among tax authorities and businesses, the Draft also proposes additional regulations clarifying the definition of non-cash payment documents. These documents must be bank transaction records proving the transfer of funds from the buyer’s account to the seller’s account at a financial institution. Acceptable forms of non-cash payment include checks, payment orders, wire transfers, collection authorizations, bank cards, credit cards, mobile phone SIMs (e-wallets), and other approved payment methods.
If adopted, the provisions in the Draft will clarify various aspects of VAT regulations, ensuring greater transparency and accuracy in VAT declarations and payments for businesses.
DISCLAIMER
Legal News from Aliat Legal is provided for general informational and reference purposes only and should not be considered a legal opinion nor relied upon in lieu of specific advice. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication. Please contact us for further details on which you have concern.
Main office: 27-31 D7 Street, An Khanh Ward, Thu Duc City, Ho Chi Minh City
Telephone: 19005555338 | Fax: [+84 28] 3519 4668
Email: contact@aliat.group
Website: www.aliat.group
On March 20, 2025, the Government issued Decree No. 70/2025/ND-CP (“Decree 70”), amending and supplementing several provisions of Decree No. 123/2020/ND-CP on invoices and documents (“Decree 123”), with the aim of updating regulations concerning the time of issuance of invoices for certain types of business activities. The key updates in Decree 70 include the following:
Time of invoice issuance for export of goods and services
Decree 70 supplements the regulations regarding the time of issuance of invoices for the export of goods and provision of services to foreign organizations and individuals. Specifically as follows:
- For export of goods (including export processing), the seller is responsible for determining the time of issuing invoices, but the invoice must be issued no later than the next working day after the goods are cleared through customs in accordance with customs regulations.
- For export of services, the time of issuing invoices is when the service is completed, irrespective of whether payment has been received. If payment is made prior to or during the provision of the service, the invoice must be issued when payment is received, except for cases involving advance payments or deposits to secure services such as accounting, auditing, financial and tax consulting, valuation, technical surveys, design, supervision consulting, and investment project formulation.
Amending and supplementing regulations on time of invoice issuance in specific cases
Sale of goods and provision of services in large quantities or frequently recurring
In addition to the large-volume and frequently occurring goods and services already regulated under Decree 123, Decree 70 has introduced several new categories of goods and services, including railway transport support services, e-commerce services, banking services, securities services, online lottery services, and toll collection services between investors and toll service providers, as well as other cases as guided by the Minister of Finance.
Accordingly, the time of issuing invoices for these cases is the completion of data reconciliation between the parties, but no later than the 7th day of the month following the month in which the service was provided, or no later than 7 days after the end of the agreed period. The agreed period for determining the amount of goods and services provided is based on the agreement between the seller and the buyer.
Lending activities and foreign exchange agency activities, foreign exchange receipt and payment services
Decree 70 supplements regulations on the time of issuing invoices for lending activities. Specifically, the time of issuing invoices is determined based on the interest payment schedule in the loan agreement between the financial institution and the borrower.
In cases where interest is not collected by the due date and the financial institution tracks off-balance sheet under laws on credit, the invoice is issued when the interest payment is received. In cases of early interest payment under the loan agreement, the invoice is issued when the early interest payment is collected.
For foreign exchange agency activities, including the receipt and payment of foreign exchange services by credit institutions, the invoice must be issued at the time of the foreign exchange transaction or when the foreign exchange receipt and payment service is completed.
Supplementing applicable entities and content of electronic invoices generated from cash registers
Decree No. 123 did not provide regulations on the applicable entities for electronic invoices generated from cash registers, which caused difficulties for enterprises in using invoices. To address these challenges, Decree No. 70 specifically stipulates that entities eligible to use electronic invoices generated from cash registers include households businesses and individual businesses with an annual revenue of VND 1 billion or higher, as well as enterprises engaged in the sale of goods and provision of services, including sales of goods and services directed to consumers (shopping centers, supermarkets, retailing (excluding automobiles, motorcycles, motorbikes, and other motor vehicles), food and beverage services, restaurants, hotels, passenger transportation services, direct support services for road transport, artistic performances, entertainment, cinema operations, and other personal services in accordance with the Vietnamese Economic Industry Classification System) using electronic invoices generated from cash registers with data connectivity to the tax authority.
Additionally, Decree No. 70 also provides specific regulations on the content of such invoices to facilitate enterprises in issuing invoices. The required contents of electronic invoices generated from cash registers include: Name, address, and tax identification number of the seller; Name, address, tax identification number/personal identification number/phone number of the buyer, as required by regulations (if the buyer requests); Name of goods, services, unit price, quantity, and payment price. In cases where organizations or enterprises pay tax through deducting method, the invoice must clearly indicate the selling price excluding Value Added Tax, Value Added Tax rate, Value Added Tax price, and total payment including Value Added Tax; Time of invoicing; The tax authority’s code or electronic data enabling the buyer to retrieve and declare information from the electronic invoice generated from the cash register. The seller send the electronic invoice to the buyer electronically (via SMS, email, or other forms) or provide a link or QR code for the buyer to search and download the electronic invoice.
Overall, Decree 70/2025/ND-CP is a significant reform that contributes to improving the regulatory framework on invoices and documentation, facilitating businesses and tax authorities in fulfilling tax obligations and managing invoices.
DISCLAIMER
Legal News from Aliat Legal is provided for general informational and reference purposes only and should not be considered a legal opinion nor relied upon in lieu of specific advice. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication. Please contact us for further details on which you have concern.
Main office: 27-31 D7 Street, An Khanh Ward, Thu Duc City, Ho Chi Minh City
Telephone: 19005555338 | Fax: [+84 28] 3519 4668
Email: contact@aliat.group
Website: www.aliat.group
On April 9, 2025, the Ministry of Finance issued Official Letter No. 4525/BTC-PC to officially guide state management agencies and investors on how to determine areas eligible for investment incentives in the event of administrative boundary changes due to the reorganization and consolidation of administrative units. The Official Letter clarifies several important points as follows:
Continuation of current incentives for projects already granted investment registration certificates (“IRC”):
The Ministry of Finance affirms the principle that, regardless of administrative boundary changes, investors who have already been granted IRC will continue to enjoy the investment incentives related to the area as recorded in the IRC and the Investment Policy Approval Decision issued prior to the boundary change.
Determination of investment incentive areas for new projects:
For cases where investors register new investment projects after administrative boundaries have been reorganized compared to the list of incentive areas under Decree 31/2021/ND-CP but before the Government issues a new list of investment incentive areas, the Ministry of Finance provides the following guidance for determining investment incentive areas:
The investment incentive status of the newly established administrative unit will be determined based on classification of the majority of the former commune-level administrative units.
For example, if a new commune-level administrative unit is formed by merging several former communes, and the majority of those former communes were classified as areas with difficult socio-economic conditions, then the new commune-level unit will be classified as an area with difficult socio-economic conditions.
In cases where there is an equal number of former communes classified under different levels of investment incentive areas, the newly established administrative unit will be classified according to the area with more difficult socio-economic conditions in order to maximize investor benefits.
For instance, if a new commune-level administrative unit is formed from the merger of former communes, and the number of communes previously classified as areas with difficult socio-economic conditions is equal to the number classified as areas with especially difficult socio-economic conditions, then the newly established unit will be classified as an area with especially difficult socio-economic conditions.
Adjustment of the investment project after the change of administrative boundaries are non-mandatory
The Ministry of Finance emphasizes that investors are not obligated to carry out procedures to amend the IRC or the Investment Policy Approval Decision following administrative boundary changes. Any such amendments to update the new administrative boundaries are entirely at the investor’s discretion.
In short, Official Letter No. 4525/BTC-PC clarifies several important principles regarding the determination of investment incentive areas in the context of Vietnam’s ongoing nationwide administrative unit reorganization. Overall, the Ministry of Finance’s approach is to safeguard investors’ rights, ensuring that investors continue to enjoy the investment incentives previously granted prior to administrative boundary changes, and not requiring investors to amend investment project documents unless they wish to do so.
DISCLAIMER
Legal News from Aliat Legal is provided for general informational and reference purposes only and should not be considered a legal opinion nor relied upon in lieu of specific advice. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication. Please contact us for further details on which you have concern.
Main office: 27-31 D7 Street, An Khanh Ward, Thu Duc City, Ho Chi Minh City
Telephone: 19005555338 | Fax: [+84 28] 3519 4668
Email: contact@aliat.group
Website: www.aliat.group
In the area of business registration, the Ministry of Finance issued Official Letter No. 4370/BTC-DNTN on April 9, 2025, providing guidance on business registration procedures following administrative boundary changes.
According to the official letter, the Ministry of Finance clarified that business registration authorities are not allowed to require enterprises to change their address information when administrative boundaries are adjusted. Instead, the update of address information based on the new administrative boundaries will be carried out simultaneously with other information changes when the business requests such adjustments.
Therefore, after administrative boundaries change, businesses are still allowed to continue using their previously granted Business Registration Certificates, Branch/Representative Office/Business Location Registration Certificates, without needing to go through the procedure to update the address on those certificates.
DISCLAIMER
Legal News from Aliat Legal is provided for general informational and reference purposes only and should not be considered a legal opinion nor relied upon in lieu of specific advice. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication. Please contact us for further details on which you have concern.
Main office: 27-31 D7 Street, An Khanh Ward, Thu Duc City, Ho Chi Minh City
Telephone: 19005555338 | Fax: [+84 28] 3519 4668
Email: contact@aliat.group
Website: www.aliat.group
On April 2, 2025, the Government officially issued Decree No. 82/2025/NĐ-CP regarding the extension of deadlines for the payment of value-added tax (“VAT”), corporate income tax (“CIT”), personal income tax (“PIT”), and land rent in 2025 (“Decree 82/2025”). Some of the key points of Decree 82/2025 are as follows:
Eligible enitites for tax payment extension
According to the new regulations, the extension of deadlines for the above-mentioned taxes applies only to enterprises, organizations, households, household businesses, and individuals engaged in production and business activities in specific sectors such as agriculture, forestry, fisheries, food processing, garment manufacturing, construction, publishing, transportation, accommodation services, education, healthcare, arts, entertainment, sports, the production of prioritized supporting industry products, key mechanical products, and several other sectors. In addition, the new decree also applies to small and micro-sized enterprises for taxes arising during the applicable period, in accordance with regulations.
Extented deadline for VAT payment
According to Decree 82/2025, the deadline for payment of VAT incurred by enterprises and organizations for the tax periods of February and March 2025, as well as Quarter I of 2025, will be extended by 6 months. Meanwhile, a 5-month extension will apply to VAT amounts due for April, May, and June 2025, and Quarter II of 2025. However, it is important for businesses to note that this extension does not apply to VAT on imports.
Extented deadline for CIT payment
For provisional CIT payments for Quarter I and Quarter II of the 2025 tax period, eligible enterprises are granted an extension of 5 months from the original CIT payment deadline under regulations of tax laws.
Extented deadline for land rent payment
According to the new Decree, the extension for land rent payment in 2025 applies only to 50% of the land rent amount payable in 2025 for eligible subjects that are directly leased land by the State under a Decision or Contract issued by a competent state authority, in the form of annual land rent payments. Specifically, the extension period is 6 months from May 31, 2025.
Regarding the extension procedure
To obtain a tax payment extension, enterprises are only required to submit the necessary documents to their directly managing tax authority once for all taxes and land rent arising in the eligible tax periods, together with the tax declaration submission. If the extension request dossiers are not submitted at the same time as the tax declaration, they must be submitted no later than May 30, 2025.
In the context of the current economic challenges facing Vietnam, the issuance of Decree 82/2025 is expected to alleviate some of the difficulties and support business and production activities for individuals and enterprises of all sizes, thereby contributing to economic growth.
DISCLAIMER
Legal News from Aliat Legal is provided for general informational and reference purposes only and should not be considered a legal opinion nor relied upon in lieu of specific advice. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication. Please contact us for further details on which you have concern.
Main office: 27-31 D7 Street, An Khanh Ward, Thu Duc City, Ho Chi Minh City
Telephone: 19005555338 | Fax: [+84 28] 3519 4668
Email: contact@aliat.group
Website: www.aliat.group
In order to implement the Government’s directive under Resolution No. 233/NQ-CP dated December 10, 2024, on supporting individuals and businesses in developing production and business activities, the Government is currently drafting the Draft Decree regulating the reduction of land rental fees for 2025 (“Draft”).
Land rental reduction rate
The Draft proposes a 30% reduction in land rental fees, calculated based on the payable land rental amount for 2025. This reduction will not apply to any outstanding land rental fees from years prior to 2025 or to any late payment interest (if any).
If a land user is concurrently entitled to other land rental reductions and/or is entitled to deduct compensation and site clearance expenses from the payable land rental amount, the 30% reduction will be applied to the land rental amount payable after such other reductions and/or deductions in accordance with legal regulations.
Eligible entities to rent reductions
The Draft proposes that the land rental reduction will apply to lawful land users who are currently leasing land from the State based on a Land Lease Decision, a Land Lease Contract, or a Certificate of Land Use Rights and Ownership of Assets Attached to Land issued by a competent state authority, effective during 2025, under the form of annual land rental payment.
It is notable that the Draft proposes that the reduction will apply even to cases where the land user is not eligible for, or has exhausted the period of, other land rental exemptions or reductions, as well as to cases where the land user is already enjoying other forms of land rental reductions.
Application Dossier, Procedures, and Process
To be entitled to the 30% reduction in the payable land rental amount for 2025, the land user must submit the following documents:
- A written request for the 2025 land rental reduction (using the template attached to the Draft); and
- A certified copy of the Decision of land lease or Agreement of land lease or Certificate of land use rights, ownership of assets attached to the land.
Within 30 days from the receipt of a complete and valid application, the competent authority will determine the reduced land rental amount and issue a Decision on land rental reduction in accordance with the laws on land use fees, land rental fees, and tax administration.
With the goal of achieving an 8% economic growth rate in 2025 as set out in Resolution No. 233/NQ-CP, this Draft is expected to ease the financial burden and create more favorable conditions for individuals and businesses to improve their production and business activities, thereby fostering the intended economic growth momentum.
DISCLAIMER
Legal News from Aliat Legal is provided for general informational and reference purposes only and should not be considered a legal opinion nor relied upon in lieu of specific advice. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication. Please contact us for further details on which you have concern.
Main office: 27-31 D7 Street, An Khanh Ward, Thu Duc City, Ho Chi Minh City
Telephone: 19005555338 | Fax: [+84 28] 3519 4668
Email: contact@aliat.group
Website: www.aliat.group
Attorney at Law
Senior Associate
Head Quarters
ALIAT Building, 27-31 D7 Street,
An Khanh Ward, Ho Chi Minh City, Vietnam
Tel: [+84] 1900.5555.38
Email: contact@aliat.group
