Tax & Accounting

Investing in Hanoi’s Hoa Lac High-tech Park

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By Alexander Chipman Koty

Established in 1998, Hanoi’s Hoa Lac High-tech Park (HHTP) was Vietnam’s first high-tech park and is currently the country’s largest. While Vietnam has over 190 industrial parks and plans to increase this number to 500 by 2020, HHTP is one of only three national-level high-tech parks, alongside Saigon High-tech Park and Danang High-tech Park. The HHTP was created with the intention to become Vietnam’s leading high-tech industry cluster for manufacturing, research and development, and innovation.

Due to start-up difficulties and incomplete infrastructure, the park initially struggled to attract high profile investors. However, Vietnam has rapidly industrialized since the park’s establishment, becoming a leading recipient of foreign direct investment and an increasingly prominent electronics manufacturer. As a result, the HHTP has become equipped with higher quality infrastructure, and is beginning to fulfill its promise as a tech hub. While Ho Chi Minh City has pulled ahead as Vietnam’s most popular area for investment, Hanoi can be particularly advantageous for operations with supply chains in China due to the city’s proximity to the border.

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Taxation of Export Processing Enterprises in Vietnam

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By Dezan Shira & Associates
Editor: Harry Handley

It is becoming easier to trade across borders from Vietnam, according to the World Bank’s Doing Business Guide. Due in large part to Vietnam’s proximity to China and the country’s access to the ASEAN free trade area, exports of goods added up to over US$170 billion in 2016. The government expects export sales to be one of the key drivers for economic growth in 2017, and is targeting a 6.7 percent increase in the value of exports this year.

The presence of a number of Export Processing Zones (EPZs), which offer tariff-free trade, and low cost labor make Vietnam an ideal location for Export Processing Enterprises (EPEs). Due to their location within EPZs, these businesses benefit from unique tax treatment, which has recently been amended and will be discussed below. Firstly, it is important to understand the definition of an EPE.

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Accounting and Bookkeeping in Vietnam – New Issue of Vietnam Briefing Magazine

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The latest issue of Vietnam Briefing magazine, titled “Accounting and Bookkeeping in Vietnam“, is out now and available to subscribers as a complimentary download in the Asia Briefing Publication Store.

In this issue:

  • Navigating VAS: A Guide to Vietnamese Accounting Standards
  • VAS and the IAASB: Understanding Key Differences
  • Expert Advice: Optimizing Bookkeeping in Foreign Investment Projects

Managing accounting and bookkeeping in Vietnam can prove to be a time consuming and constantly changing area of compliance, even for those well-versed in investment within the country. Shifting regulations, changing interpretations of existing legislation, and convergence with international norms all coalesce to form a compliance environment with significant costs.

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Introduction to Personal Income Tax in Vietnam

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By: Dezan Shira & Associates

Editor’s Note: This article was first published on October 13, 2013, and has been updated as of November 18, 2016

Vietnam’s National Assembly issued the Law on Personal Income Tax (PIT) on November 21, 2007, which came into effect on January 1, 2009 and was subsequently amended in 2012 and 2014. The law in its current form applies to individuals earning income, including those doing business who were previously included under corporate income tax.

According to the PIT Law, PIT is levied on the worldwide income of Vietnam residents and on Vietnam-sourced income of non-residents, irrespective of where the income is paid. The tax calculation and finalization procedure for Vietnamese locals and expatriates is the same, but different for residents and non-residents.

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Vietnam Set to Update Transfer Pricing Thresholds from 2017

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By: Dezan Shira & Associates

Vietnam’s Ministry of Finance released a draft circular on October 11th which, if passed, is set to become the largest change to transfer pricing (TP) regulation since the implementation of Circular 66/2010/TT-BTC in 2010 – which the draft updates. Touching on conditionality of TP exemption and thresholds for defining related entities, the draft has significant implications for a variety of enterprises operating within Vietnam. Currently receiving public feedback, the circular is widely expected to become effective at the top 2017. Those operating or considering establishment within Vietnam should therefore review the draft and any subsequent changes closely. The brief below outlines key changes proposed by the draft and highlights the increasing risk of non-compliance with TP regulation in Vietnam.

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Vietnam to Introduce Environmental Incentives From September 23

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By: Dezan Shira & Associates

Vietnam is set to extend export tax relief to a number of goods including products and machinery used in the treatment of waste, as well as goods registered under Vietnam’s emerging Green Label certification. Outlined by the Ministry of Finance (MOF) under Circular 128/2016/TT-BTC, incentives are set to come into effect as of September 23rd, 2016. 

Current Export Tariffs

Vietnam currently applies export tariffs on a variety of products leaving its boarders. The main targets of these taxes are products used in the extractives industry or other exports that are deemed to have a significant impact on Vietnam. Depending on the impact that a given industry or export is deemed to have, taxes can range from 0-45 percent. 

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Vietnam’s Tax Outlook in 2016 and Beyond

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Vietnam DebtBy Kurt Nguyen

Faced with conflicting pressure to upgrade infrasture and boost investment, the Vietnamese government finds itself in a precarious financial position in 2016. The TPP and EVFTA are still a way out, and there is little doubt that adjustment of taxes or spending will likely occur before investment inflows bolster government coffers. From an investment standpoint, the way in which the interim is handled is set to have substantial ramifications for taxation throughout the country and set a precedent regarding future revenue generation.  

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Vietnam Outlines Customs and Tax Plans to Enhance Competitiveness

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vietnam_futureBy: Dezan Shira & Associates
Editor: Eugenia Lotova

In response to growing concerns over lagging competitiveness, Vietnamese authorities have begun the process of revamping numerous aspects of their investment environment. The most recent reform is Decision No. 1134/QD-BTC, issued by Vietnam’s Ministry of Finance on 23 May 2016. This document details Vietnam’s national strategy to implement Resolution No. 19/NQ-CP and No. 19-2016/NQ-CP, which are earlier versions of the government’s plan to update the way business is conducted and thereby improve the status of the Vietnamese market in relation to its regional competition by 2020.

The resolution heavily focuses on simplifying the customs and tax code, switching to electronic databases, and identifying the logistics of the one-stop mechanism. If successfully carried out, these proposals will drastically decrease the cost and time involved in doing business in Vietnam.

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Remitting Profits from Vietnam – New Publication From Vietnam Briefing

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VB 2016 2Remitting Profits from Vietnam, the latest publication from Vietnam Briefing and Dezan Shira & Associates, is out now and available for purchase through the Asia Briefing Bookstore.

Remitting profits from Vietnam can prove a complex and time consuming process for even the most seasoned investors. Shifting regulations and scarce information on remittance procedures results in a constantly changing compliance landscape that mandates continued attention. For those with current operations within the country or considering Vietnam as a destination for future investment, monitoring of regulatory bodies and review of pertinent legislation is a critical component of entry and operational due diligence.

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Tax Alert: Vietnam Amends Laws on Tax Administration, Special Consumption Tax, and VAT

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Vietnam Tax AlertBy: Dezan Shira & Associates

On April 6th, Vietnam’s National Assembly approved amendments to a number of tax policies relevant to those with operations throughout the country. Changes cover a wide variety of tax policies and should be followed closely to ensure compliance.

Specific policies that have seen amendment include Value Added Taxation (VAT), Special Consumption Tax (SCT), and Tax Administration. The general package of amendments is slated to become effective July 1st, while the rollout of specific instruments will be carried out over the course of the year.

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