• Service: Tax, Global Indirect Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 5/29/2014

Vietnam - VAT for on-the-spot import/export; export processing zone deadline 

May 29:  Guidance from Vietnam’s tax department addresses when value added tax (VAT) applies for “on-the-spot” import and export.

The guidance—Official Letter No. 951/TCT-CS (24 March 2014)—provides that when a foreign contractor provides goods in the form of “on-the-spot” import and export and generates income in Vietnam from a contract between the foreign contractor and the on-the-spot import enterprise, the VAT liabilities of the foreign contractor will be determined as follows:

  • If the VAT on the goods was paid at the import stage, the foreign contractor is not required to pay VAT on the value of the goods.
  • If the value of the goods and services are separately listed in the contract, the VAT will apply proportionately to each value. If the value of the goods and services are not separately stated in the contract, the VAT ratio applies for the entire value of the contract.

Import and export duties and 275-day period for raw material imports

Another official letter provides that certain entities—including those located in industrial zones or export process zones—that manufacture products for export can be subject to application of the 275-day deadline on raw materials imported for the production of goods for export.

Read a May 2014 report [PDF 371 KB] prepared by the KPMG member firm in Vietnam: Technical Update (May 2014)

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