Vietnam Amends CIT and VAT Through Decree 91

Posted by Reading Time: 4 minutes

HANOI – Vietnam has issued amendments to certain provisions related to the country’s corporate income tax (CIT) and value-added tax (VAT). The changes have been laid out in Decree 91/2014/ND-CP and will become effective on October 15, 2014.

Professional Service_CB icons_2015RELATED: Dezan Shira & Associates’ International Tax Planning Services

With respect to CIT, a number of important changes have been laid out in the Decree. For example, for certain expenses, companies will be able to deduct up to a maximum of one month’s average salary of an employee. These expenses include the following:

  • The fully-documented spending by each employee on funerals and weddings
  • Travel on public holidays
  • Support for additional education

Additionally, profits arising from scientific research and technology developments will now be exempt from CIT for a maximum of three years.  Also, profits from the sale of products manufactured by new-technology machinery and equipment will have a tax break for a maximum period of five years.

Changes have also been made to CIT administration. From now on, taxpayers who temporarily stop trading must submit the relevant documents to their business registration office; they do not have to also inform the DGT.

RELATED: Vietnam Expands the Scope of the Foreign Contractor Tax

Furthermore, official returns for CIT will no longer be required on a quarterly basis. However, it is important to note that quarterly payments are still required – these are based on the results of business operations in the previous year, or estimates for the current year. If the annual CIT payable on final assessment at the end of any year is 20 percent or more than the total tax paid during the year’s four quarters, late interest will be payable by the taxpayer.

The main changes with regards to VAT include the following. If borrowers sell guaranteed assets based on the authorization of lenders to repay guaranteed loans, then this is not subject to VAT.  Additionally, taxpayers with a total revenue of at least VND50bn (USD2.35m) in the previous year will now be required to submit quarterly declarations.

Vietnam’s Finance Minister, Dinh Tien Dung, explained that Decree 91 would “contribute to reducing the number of hours to be spent by taxpayers on tax compliance works by 88.36 hours/year, including reduction of 41.36 hours for VAT and 47 hours for CIT.”

Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email or visit

Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.

Related Reading

VB_2014_3_issue_cover250_350_1 (1) smallerVietnam: A Guide to HR in Asia’s Next Growth Market
In this issue of Vietnam Briefing, we attempt to clarify human resources (HR) and payroll processes in Vietnam. We first take you through the current trends affecting the HR landscape and then we delve into the process of hiring and paying your employees. We next look at what specific obligations an employer has to their employees. Additionally, we guide you through the often complex system of visas, work permits, and temporary residence cards. Finally, we highlight the benefits of outsourcing your payroll to a “pan-Asia” vendor.

Tax, Accounting, and Audit in Vietnam 2014-2015
The first edition of Tax, Accounting, and Audit in Vietnam, published in 2014, offers a comprehensive overview of the major taxes foreign investors are likely to encounter when establishing or operating a business in Vietnam, as well as other tax-relevant obligations. This concise, detailed, yet pragmatic guide is ideal for CFOs, compliance officers and heads of accounting who need to be able to navigate the complex tax and accounting landscape in Vietnam in order to effectively manage and strategically plan their Vietnam operations.

An Introduction to Doing Business in Vietnam 2014 (Second Edition)
An Introduction to Doing Business in Vietnam 2014 (Second Edition) provides readers with an overview of the fundamentals of investing and conducting business in Vietnam. Compiled by Dezan Shira & Associates, a specialist foreign direct investment practice, this guide explains the basics of company establishment, annual compliance, taxation, human resources, payroll, and social insurance in the country.