New VAT policy and CIT deductions in 2022 in Vietnam

CAT VAT vietnam news laws 2022

On the 11 January 2022, the Vietnamese Government has adopted the Resolution No. 43/2022/QH15, about VAT policy and CIT deductions in Vietnam,  with the objectives to:

  • Rapidly recover and develop production and sale activities, promote growths, prioritize key sectors, and strive to achieve objectives of the period 2021 – 2025, which are 1) average GDP growth of 6,5 – 7% per year, 2) reduce the public debt, 3) reduce the unemployment rate below 4%;

  • Reduce costs, assist cash flow, create optimal conditions for enterprises, economic organizations;

  • Guarantee social security and livelihood of the general public, especially workers, disadvantaged people, victims of the epidemic.

In order to attain those objectives, this Resolution, effective since the 1st of February 2022, has implemented a reduction to the VAT (Value-Added Tax) as well as a measure for CIT (Corporate Income Tax) deductions for the year 2022.

1. Reduction of the VAT

The Resolution No. 43/2022/QH15 has implemented a reduction of 2% in 2022 for goods and services previously subject to 10% VAT (so now 8%), except for the following goods and services: telecommunication, financial activities, banking activities, securities, insurance, trading of real estate, metal, precast metal products, mining products (excluding coal mining), coke mining, refined oil, chemical products, goods and services subject to special consumption tax (SCT).

vat reduction vietnam

 

2. CIT deductions

The Resolution No. 43/2022/QH15 is now also allowing donations and sponsors made by enterprises and organizations for COVID-19 epidemic control operation in Vietnam to be included in deductible expenses when calculating taxable corporate income for the tax period of 2022. To benefit from this deduction, concerned businesses must submit relevant documents as well as obtain written confirmation from the Vietnamese authorities.

Should you need more details on this new VAT policy and the CIT deductions, do not hesitate to contact us. 

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