Vietnam Regulatory Brief: Casino Ban Upheld, Dumping Duties on Plywood, and Uber Tax Requirements
Uber Required to Pay Tax
Vietnam’s Ministry of Finance (MoF) issued a new rule making it mandatory for Uber to pay taxes in the country. Uber will be required to pay taxes as a foreign establishment, which earns income in Vietnam without resident offices. The tax amount will be based on revenue multiplied with the tax rate, which is 3 percent for value added tax (VAT) and 2 percent for corporate income tax (CIT). The MoF has asked Uber to ask either its subsidiary or a third party to pay the relevant taxes. Drivers that have signed contracts with Uber will be required to pay tax on their income.
Uber drivers will be taxed at 3 percent for VAT and 1.5 percent for individual income tax. Uber entered Vietnam in June 2014 and has been able to avoid paying taxes till now. Its rival Grab is registered and has already been paying taxes.
Dumping Tax Levied on Vietnamese Plywood
Vietnam’s plywood products will be subject to an anti-dumping tax imposed by Turkey at a rate of US$ 240 per cubic meter. The developments come after the Turkish Ministry of Economy (TMoE) launched an anti-dumping investigation into plywood imported from some countries, including Vietnam. Only two Vietnamese businesses won’t have the anti-dumping tax imposed on them, having furnished all the relevant information and proving that the exported timber products were manufactured by them.
The investigation goes back to May 2015 into specific HS coded products that were imported since 2010. Turkey is also planning to impose anti-dumping duties on polyester textured yarn from Vietnam. A final decision is expected in early October.
Ban on Locals to Enter Casinos to Remain
Vietnam’s Ministry of Finance (MoF), in its latest draft decree, has barred locals from entering the country’s casinos. The MoF, which completed the draft in August, acknowledged the economic benefits of allowing locals to gamble, but remained hesitant on amending the rules. Only foreigners and Vietnamese with foreign passports are allowed to enter casinos. Analysts were hopeful that the ban on locals would be lifted as a request was submitted earlier this year. The hope was that the new government would consider making changes.
Reports indicate that 60 percent of the country’s population is under 35, and locals who do want to gamble, go to Hong Kong, Macau, and Cambodia. Studies show that locals spend around US$ 250 million every year in Cambodia’s casinos. The development is also a blow to international casino operators that are looking to invest in Vietnam. Analysts have stated that this may be detrimental to foreign investment in the sector. Las Vegas Sands has shown keen interest in the country but is likely to re-think its plans, considering that the government has not made any changes to the gambling law. Foreign investors require a minimum of US$ 4 billion in capital to run a casino, and are subject to 10 percent value added tax, 35 percent gross gaming revenue tax, and a 20 percent corporate income tax. The latest developments, however, bode well for casinos in neighboring countries, such as as Cambodia and Laos.
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