In August 2017 the Ministry of Finance made proposals on amendments regarding future tax provisions. This proposal contains a wide range of important corrections (corporate income tax, personal income tax, value added tax, special consumption tax, etc.).
The objectives of these proposals are as follows.
1. Fiscal reconstruction
2. Responding to international tax practice practices
3. Clarification of tax regulations, reduction of practical tax
(Corporate income tax)
· Change in capital gain taxation
Previously, it was 20% of the gain on sale, but changed to 1% of the
sale amount
· Change of foreign policyholder's tax about On the spot trade
In the past, it was 1%, but changed to 0.5%
· Can offset the profit at the time of selling real estate and the loss
with other business (which does not receive tax incentive)
· Introduction of an under capital tax system
Ratio of debt to capital Manufacturing industry 5: 1, other 4: 1, bank
12: 1
· Clarification of preferential treatment system for recommended business
areas
High-tech industry, supporting industry, high value-added manufacturing
industry
· Change in corporate tax rate for small scale business
1. Annual sales is about 3 billion Vietnamese dong (approx. 15 million
yen) · · · 15%
2. With less than 200 employees on social insurance, annual sales from
3 billion Vietnamese Dong (about 15 million yen) to 50 billion Vietnamese
Dong (about 250 million yen)
However, excluding companies that have a shareholding / equity interest
ratio of the parent company of 25% or more.
(Personal income tax)
· In following case, personal income tax shall be 50%.
1. High technicians in the IT industry
2. Agriculture, agricultural workers who use high-tech or make recommended
high-tech products
· Tax rate applied income amount changed to the following
| Level Taxable amount (for 1 month) | Tax rate (%) | |
|---|---|---|
| １ | Under 10 million VND (about 50.000 yen) | 5 |
| ２ | From 10 million to under 30 million VND(about 50.000 to 150.000 yen ) | 10 |
| ３ | From 30 million to under 50 million VND(about 150.000 to 250.000 yen ) | 20 |
| ４ | From 50 million to under 80 million VND(about 250.000 to 400.000 yen ) | 28 |
| ５ | Over 80 million VND (about 40.000 yen) | 35 |
· Personal income tax by capital transaction changed from profit taxation
to 1% of sales amount regardless of resident or non-resident
· Income tax rate due to prize change to progressive taxation system
| Level | Taxable amount | Tax rate (%) |
|---|---|---|
| １ | Under 5 billion VND (about 25 million yen) | 10 |
| ２ | From 5 billion to under 10 billion VND (about 25 million to 50 million yen ) |
20 |
| ３ | Over 10 billion VND (about 50 million yen ) | 30 |
Changed from 2 million VND (about 10,000 yen) to 5 million VND (about 25,000 yen)
Personal income tax rate is 10%
· Two types of proposal methods of income tax declaration
1. Abolition of annual tax returns
Monthly declaration and implementation of year-end adjustment
2. Confirm declaration
However, unpaid amount or refund is unnecessary when it is 300,000 VND
(about 1,500 yen) or less.
(Value-added tax)
· Change of tax rate
5% targeted transactions’ rate increase to 6%
10% targeted transactions’ rate increase to 12%
· Decrease from 10% to 5% for some items such as education and medicine
· The remittance amount due to bank use, which is the requirement for deductibility
of VAT and corporate tax and deduction, changed from 20 million VND (about
100,000 yen) to 10 million VND (about 50,000 yen)
· If a company applying the VAT rate of 6% makes a refund, the purchase
VAT shall be required to be exceeded for consecutive 12 months or 4 consecutive
quarters.
(Special consumption tax)
· Taxed 10% special consumption tax on soft drinks
· Increase special consumption tax rate on tobacco