Legal update in December 2021 (Part 2)

Our Vietnam Legal Update # 191 will guide you through 04 legal issues:

I. Guidance on the classification of certain goods

The General Customs Department issued the official letter No. 5486 / TCHQ-TXNK of November 22, 2021 to guide the classification of fish oil products, diet foods / omega-3 vitamin supplements; diet foods / EPA-DHA supplement, etc. The content of the advice is as follows:

• The classification of goods is based on factors of composition, content, level of processing and production process.
• Whether or not the fish oil products are refined but not chemically modified, those products which usually have a characteristic fishy odor, have an unpleasant taste and have a color that changes from yellow to reddish brown, they belong to group 15.04.
• In the case of hydrogenated products containing conjugated, re-esterified, re-esterified or eledinized fish oil, whether or not refined, but unprocessed, these products belong to group 15.16.
• In case the fish oil products are hydrogenated or not but have been processed by emulsification, kneading, texture modification, etc. .
• In the case of the goods are mixtures of ethyl esters which are produced from fish oil by completely replacing the glycerin base with an ethyl base, the goods belong to group 21.06.
• The above items may contain added gelatin which acts as the shell of the capsule and added vitamin E as an antioxidant, provided that these additions do not alter the nature of the fish oil and the mixture. fish oil.

II. 30% reduction in the VAT rate

Hai Phong City Tax Department issued official letter No.3075 / CTHPH-TTHT of November 26, 2021 to guide the 30% reduction in the VAT rate with the following content:

• The goods and services eligible for the VAT reduction from November 01, 2021 to the end of December 31, 2021 include: Transport services (rail transport, river transport, air transport, other road transport); Food service; Travel agency, tour operator and assistance services relating to the promotion and organization of tours.
• The VAT reduction for the aforementioned goods and services is 30% of the VAT rate.
• For the case of VAT reduction, when establishing VAT invoices relating to goods and services subject to VAT reduction, the line of the VAT rate to be inserted with “the prescribed tax rate (5% or 10%) x 70% ”.

III. Modifies, supplements certain guidelines on VAT, IRP and tax management for commercial households and individuals

The Ministry of Finance published Circular No. 100/2021 / TT-BTC of November 15, 2021 to modify and complete several articles of Circular No. 40/2021 / TT-BTC which regulate VAT, IRP and management tax professional households, and individuals. Some notable contents are as follows:

• Amending regulation on two cases where organizations and individuals declare taxes and pay taxes on behalf of individuals (points dd and e, clause 1, article 8 of circular n ° 40/2021 / TT-BTC):
  • Organizations, including the owner of the e-commerce exchange, must file tax returns on behalf of individuals and pay taxes on behalf of individuals on the basis of an authorization;
  • Natural persons who declare tax on behalf of other natural persons are taxpayers on the basis of an authorization.
• Modification of the regulations on the methods of calculating the tax in specific cases: natural persons who carry out only real estate rental activities and whose rental period is not a full year, if the rental income are 100 million VND / year or less, are not subject to VAT and IRP. In the event that the tenant pays rental fees up front for many years, the income for determining whether an individual should pay taxes or not is the one-time payment amortized based on the calendar year.
• Additional regulation on the responsibilities of the tax service: in case the organization that is the owner of the e-commerce exchange does not declare tax, pay the tax on behalf of the natural persons having business on the e-commerce exchange on the basis of an authorization, the tax The Department will cooperate with E-commerce Exchange to share and provide information about these people.

IV. Expenses to support and compensate clients

Binh Duong Province Tax Department released Official Letter No. 11480 / CTHDU-TTHT dated November 29, 2021 with the following content:

• In the event that the company provides freight assistance for customers and financial assistance for distributors to bring goods to the construction site, and these amounts of assistance are accompanied by conditions (repair, warranty, promotion, advertising, etc.) set out in the contract in order to promote the consumption of the company’s products, upon receipt of the aid amount, the customer draws up a VAT invoice for the company and must declare and pay the VAT in accordance with the laws.
• For the amount of unconditional support, it is not compulsory to declare, calculate and pay VAT. When clients receive this amount of support, they must prepare receipts according to the laws. Businesses should rely on spending targets to complete payment receipts.
• In the event that the company has monetary compensation for damage caused to customers, this compensation amount is not subject to VAT declaration and calculation in accordance with the laws. When clients receive this amount of support, they must prepare receipts according to the laws. Businesses based on spending purposes to make payment receipts.