Tax
A recent official letter of the tax authority related to businesses seems to only solve a technical problem about interest costs for BOT enterprises. However, if we look more broadly, this case reflects an important policy question that is being asked not only in Vietnam but also in many countries around the world: how to effectively combat transfer pricing without inadvertently creating an additional compliance burden on businesses that do not have transfer pricing purposes?
If in the past, the tax authorities of each country mainly only saw the activities of enterprises taking place within their territory, today, through international information exchange mechanisms, tax authorities are increasingly able to access the overall picture of revenue profits and tax obligations of multinational corporations on a global scale.
In order to help customers and business households quickly update, correctly understand and accurately apply the latest legal regulations, HM&P is pleased to launch the publication "TAX OBLIGATIONS APPLICABLE TO BUSINESS HOUSEHOLDS AND INDIVIDUAL BUSINESS OPERATORS". Through an intuitive, concise Q&A format that follows practical situations, the publication will solve from the most basic problems to the most complex problems encountered in the process of enforcing tax obligations.
Many businesses used to think that "collecting and paying" was just a simple accounting operation. The money collected by the business and then transferred back to a third party is of course not revenue. However, the practice of tax management shows that the story is not so simple.
A tax guidance document that has just been issued can make an impact that is much greater than the technical scope of tax policy. Official Letter No. 3896/CT-CS dated 11-6-2026 of the Department of Taxation has officially affirmed that foreign-invested enterprises (FDI), if they meet the conditions of small and medium-sized enterprises, are still exempt from corporate income tax (CIT) for three years from the date of issuance of the first Enterprise Registration Certificate as domestic enterprises .
After more than 5 years of implementing Decree 132/2020/ND-CP on tax administration for enterprises with related-party transactions (Decree 132), the Ministry of Finance is submitting to the Government a new draft decree to replace the entire current decree[1]. On the surface, this can be seen as a technical move to synchronize with the Law on Tax Administration 2025 and the Law on Corporate Income Tax 2025. However, when delving into the content of the draft, it can be seen that the changes this time reflect a larger trend: Vietnam is gradually shifting from the traditional related-party transaction control model to a data-based tax risk management model, and at the same time taking a deeper approach to standards to prevent base erosion and profit shifting ( BEPS) of the OECD.
There is not much legal content that makes businesses both familiar and prone to errors such as the time of issuing value-added invoices (VAT). Most businesses understand that selling goods or providing services must be invoiced. However, determining exactly "when to issue an invoice" is a completely different story.
Currently, e-invoices are considered one of the biggest successes of the digital transformation process in the field of taxation in Vietnam. The e-invoice system not only helps management agencies improve the efficiency of supervision and prevent budget revenue loss, but also helps businesses save costs, reduce administrative procedures and increase transparency in business activities.
The strong development of the digital economy, e-commerce, cashless payments and cross-border business models is posing unprecedented challenges to tax administration. Meanwhile, the requirements to improve the investment environment, protect property rights and ensure people's privacy are increasingly raised. This makes modern tax management no longer just a problem of collecting correctly and sufficiently for the state budget, but has become part of the strategy to improve national competitiveness.
The household business sector is becoming the focus of policy adjustment in the process of improving the tax law system in Vietnam. This region has a large number of subjects, a wide distribution, making a significant contribution to the circulation of goods and services, but at the same time also poses many challenges in tax management. Recent changes, including the adjustment of the taxable revenue threshold to about 1 billion VND/year and the absence of the traditional flat tax mechanism, indicate a shift towards a more transparent management model, based on data and self-declaration obligations of taxpayers.
The Corporate Income Tax (CIT) and Personal Income Tax (PIT) regimes apply to corporate restructuring activities in Vietnam, including mergers, consolidations, splits, and transformations. Tax issues in M&A transactions are a significant challenge for businesses, whether they are in the position of seller or buyer.
The transaction of "transfer of factories in industrial parks" in most cases is considered by the tax authority as income from real estate transfer, even if the contract records "only transfer of factories" – land-attached assets without recording the transaction as the transfer of houses/works attached to land or assets attached to land. This shows that this transaction is still not understood and agreed in the way of implementation between invisible related parties, which has created risks for businesses in the transfer process.
-
-
.png)
+84 28 7308 0839.png)
hmplaw.vn
