PwC
Updates on e-invoicing & important developments of law on
tax administrationThursday, September 26 2019
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● PwC Vietnam established offices in Hanoi and HCMC in 1994.
● We also have a separate affiliated law firm in Vietnam, licensed the Vietnam’s Ministry of Justice, enabling us to offer comprehensive legal and advisory services.
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PwC is the world’s largest professional services
organisation. Drawing on the knowledge and skills of
more than 250,000 people in 158 countries, we build
relationships by providing services based on quality
and integrity.
ABOUT US
PwC
Our Hall of Frame
Vietnam Transfer Pricing Firm of the Year
(2016)
International Tax Review
Tax Controversy Leaders
(2013 – 2018)
International Tax Review
Best Vietnamese Business Tax Advisors
(2016)
Acquisition International
No.1 Professional Services Brand
(2018)
Brand Finance Global 500
IFLR1000 Recommended Law Firm(2016 )International Financial Law Review
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No. 1 Globally as Alternative Legal Brand(2018)Acritas
Audit Firm Of The Year - Vietnam(2016)Acquisition International
Certificate of Merit for Contribution to the
Independent Auditing Profession
(2016)
Prime Minister of Vietnam
ABOUT US
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MS. PHUNG THI NGOC ANHDirectorCorporate Tax – PwC Vietnam
ABOUT US
Ngoc Anh has more than 15 years experience in professional tax advisory in Vietnam and the US.
Ngoc Anh holds a Bachelor’s degree in International Business, Foreign Trade University of Vietnam and is a Member of the UK Association of Chartered Certified Accountants (ACCA) and Member of the Vietnam Tax Consulting Association.
Her professional experience has been focused on advising clients on inbound investments into Vietnam, operational tax compliance and advisory services, M&A and structuring services, effective cross-border transactions and structures, and tax controversy services.
Ngoc Anh has served a wide range of clients including multinational companies and local companies in sectors such as automotive, energy & resources, FMCG, F&B, manufacturing, trading and distribution, agricultural businesses, financial services and real estate.
PwC
ABOUT US
Baker McKenzie is the largest international law firm in Vietnam and
consistently rated among the best. We assist with the whole spectrum of
corporate and commercial transactions, bringing nearly three decades of
market experience to every deal aspect. We have helped facilitate meaningful
legal reform and have shaped policy by participating in the drafting process of
the Securities Law, Investment Law, Intellectual Property Law, Law on Credit
Institutions, Commercial Law, Competition Law, Land Law, Labor Code, tax
laws and several other pieces of legislation. At the same time, we help clients
proactively manage emerging opportunities and risks.
Our in-depth local knowledge - coupled with far-reaching resources in 47
countries - enables us to create effective and innovative solutions tailored to
your business strategies. Drawing on integrated capabilities across practices
and borders, we execute deals efficiently and with greater legal insight.
Mr. Thanh Vinh Nguyen
Partner of Baker McKenzie
Thanh Vinh Nguyen is a Partner in the Baker McKenzie Ho
Chi Minh City office, where he leads the Tax and Customs
practice group in Vietnam. Mr. Nguyen's practice areas
include tax and customs, trade and general commercial
matters. Mr. Nguyen practiced tax advisory work for two
international accounting firms for eight years and worked
in the compliance function of an international insurance
company. An expert in tax planning and law, Mr. Nguyen
has assisted clients with advice and structuring work as
well as contentious appeals with the tax authorities. Mr.
Nguyen is an award winning practitioner, recently
recognized by the International Tax Review in the
categories of: Indirect Tax Leader (2017) and Tax
Controversy Leader (2017) as well as being ranked as a
Leading Lawyer for Taxation in Legal 500 Asia
Pacific (2017).
Mr. Nguyen holds a Bachelor of Arts degree in English
from the University of Ho Chi Minh City and an LL.B from
the University of Law of Ho Chi Minh City.
PwC
Morning BriefingSeptember 26, 2019
AGENDA
8:30am
Registration & Refreshment
9:00am
Welcome remarks
9:10am
Presentation, followed by Q&A
10:30am
Event Ends
PwC
Guidance
Effectiveness
Form
New Law vs Decree 119/2018
Guidance on e-invoicing under the new law aligns with the guidance
under the new decree on e-invoicing (i.e. Decree 119/2018).
The provisions on e-invoice will take effect from 1 July 2022
However, Decree 119/2018 requires all taxpayers to apply e-invoices from
1 November 2020. This slippage in the implementation of e-invoicing and
further developments in this respect need to be closely monitored.
Draft decree amending Decree 119/2018 will be submitted to the
Government in January (or February) 2020.
With or Without code of tax authorities
Some other specific taxpayers can use e-invoices without code of
tax authorities if certain conditions should be met.
E - invoice
Implementation of e-invoicing
PwC
Practical issues that enterprises are facing regarding E-invoicing
Transition to e-invoice - manage the implementation and deployment of e-invoice system, e.g. technology infrastructure.
Receiving and storing e-invoices (e.g. e-format vs. paper converted e-invoice)
Date of 'making e-invoice' is different from the date of 'electronically signing e-invoice‘. How to deal with?
Long description: is billing attachment acceptable?
How secure the data will be if it is kept in the server of the e-invoice solution provider?
If the buyer's e-signature is required on the e-invoice? If yes, what if the buyer do not have e-signature?
How to avoid duplicate claims in certain sectors, e.g. insurance?
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PwC
Draft Circular guiding Decree 119/2018/ND-CP
• Using e-invoices with verification codes is required for enterprises classified as high tax risk, including enterprises which have in the past been penalized for tax evasion.
• Regarding the timing of e-invoice issuance, the draft circular stipulates that for e-invoices without verification codes, the timing of e-invoice issuance will be the time the seller electronically signs the e-invoices, which contradicts recent guidance in some rulings which specify the date of the invoice
• How to handle cases where invoices are wrongly issued after being granted a verification code, and guidance on the issuance of amended e-invoices for trade discounts.
• The transfer of e-invoice data to the tax authorities, including guidance on the timing and type of data transfer. In addition, sellers also need to upload invoices to their websites.
• Credit institutions, banks, and payment intermediaries need to report banking transactions to the tax authorities if required
PwC
Final Draft Circular guiding Decree 119/2018/ND-CP
• The MoF has recently conducted a meeting on the final draft version of the Circular guiding the implementation of e-invoices, after gathering all comments on the draft version of the Circular. The official Circular is expected to be released soon.
• Compared with the current draft version, some changes have been made, including the below:
E-signature of the buyer is specifically mentioned as not a compulsory item on e-invoices.
More details on the required format of e-invoices (i.e. xml. would be required).
More guidance on transfer of data (invoices with verification or non-verification codes) to the GDT portal.
Specify cases which are considered as high risk enterprises whereby e-invoices with verification code are specified.
Shorten the period that the enterprise is required to use e-invoices with verification code from 2 years to only 1 year.
All detailed guidance on using electronic stamp are removed
PwC
New Law
Penalties and
interest
Transfer pricing
E-Commerce
taxTax
dispute
Procedure and timeline
for tax declaration
and payment
▪ Law No. 38/2019/QH14 adopted on 13 June
2019 (“New Law”)
▪ The New Law comes into force from 1 July 2020
▪ Provisions on e-invoice will come into force from
1 July 2022
New Law on Tax Administration
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Due date for Current Law New Law
Quarterly tax declaration and payment 30th day following the last day of each quarter
the last day of the first month of the subsequent quarter.
Annual finalization declarationwithin 90 days following the last day of a fiscal year
the last day of the third month of the subsequent fiscal year (excluding PIT finalization declaration of individuals directly conducting their PIT finalization)
PIT finalization declaration of individuals directly finalizing PIT
within 90 days following the last day of a tax year
the last day of the fourth month of the subsequent tax year
New Law on Tax Administration
PwC
Tax authorities will have to pay interest of 0.03%/day if:
✓ taxpayers so request in case a decision handling administrative appeal or a court award provides that the tax, penalty or interest payable by taxpayers is less than the amount previously assessed by the tax authorities.
✓ tax authorities delay in issuing tax refund decisions due to the tax authorities' fault.
Tax authority Taxpayers
Interest
Interest
Tax authorities will also have to pay interest on tax redundantly paid by taxpayers
PwC
Taxpayers will not be subject to administrative penalty and
late payment interest if they have already complied with
guidelines and decisions of the tax authorities or other
competent authorities in relation to their tax liabilities.
However, this would imply that taxpayers still need to pay
tax additionally assessed by the tax authorities even if the
assessment is not in line with the previous guidance of the
tax authorities.
Recognition of the validity of tax rulings
PwC
Longer duration of tax audit
Duration of a tax audit is increased from 5 working days to 10 working days. Specifically, under the New Law, a tax audit conducted at taxpayers' site must not exceed 10 working days with one time of extension of another 10 working days.
PwC
Taxpayers who are subject to coercive measures
for tax collection will be provisionally suspended
from exiting Vietnam.
Delay in exiting Vietnam in case of outstanding tax liabilities
PwC
New rules on e-commerce tax
• New rules provided under the New Law on Tax Administration(Applicable from 1 July 2020)
Tax collection
Commercial Banks
Vietnamese Contracting
Party
Offshore Supplier
(no PE)• Main players:
✓ Vietnamese end-users✓ Local banks✓ Offshore suppliers having no PE
PwC
New rule on e-commerce tax – Grey areas
• Tax registration and payment applies to foreign companies without a permanent establishment conducting e-commerce, business on digital platform or providing other services to customers in Vietnam
✓ It seems to apply to all services provided on a cross-border basis
• Whether foreign service providers having a PE must directly conduct tax registration, filing and payment or it is an option?
• Whether the withholding regime continues to be applicable
✓ “By default” withholding obligation of local customers being business entities?
• In which circumstance a particular entity (bank, foreign service provider without PE or customer) is responsible for tax declaration and payment
✓ No double or triple taxation?
✓ Tax base on agent commission or whole proceeds?
• Which entity will conduct the procedure of claiming tax treaty protection?
• Role of third-party payment processors?
✓ Banks are still liable for withholding tax?
PwC
New rule on e-commerce tax – Coming guidelines
Government and the Ministry of Finance will issue a decree and circular respectively to provide implementing guidelines to the law.
Comments can be contributed during drafting process.
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