Destroyed goods not deductible for CIT calculation purposes

1. Our company operates in the logistics field. Some of our customers are overseas based companies that rent our bonded warehouse for goods storage. Are such foreign companies subject to withholding taxes in Vietnam and are we bound to such withholding taxes if the tax is triggered?

Under current regulations, if the overseas companies rent the bonded warehouse just for purposes of goods transit (i.e. to export the goods to other countries), such companies are not subject to withholding tax in Vietnam.

However, if the foreign companies sell goods in Vietnam via the bonded warehouse to Vietnamese customers, withholding tax would be imposed and the Vietnam customers are responsible for tax withholding, declaration and payment on behalf of the overseas companies.

2. Our company has terminated labor contracts with a number of employees. As an exit process, we need to retain the salary of the last month of those employees to make sure all labor obligations are fulfilled and would settle such salaries after the labor contract termination date. What is the PIT rate we should apply on such final payments?

According to current PIT regulations, payments to individuals having no labor contracts amounting from VND2 million and more should be subject to the flat PIT rate of 10%. In your company’s case, as the labor contracts between the company and those individuals have been terminated, payments are considered as made to non-employees and thus subject to the flat rate of 10% PIT.

3. Our company is a manufacturer of products for export. At the customers’ inspection, there have been a number of defective goods due to our own fault. Considering high costs of goods return, we decided to destroy such goods overseas. Could the cost of such destroyed goods be deductible for CIT calculation purposes?

According to the CIT regulations, defective goods is not listed as a force majeure event. Thus, the destroyed goods value due to defective status is not deductible for CIT purposes.

4. Our company sold the goods and issued e-invoices to a customer in July 2022. In September, we found a mistake in the selling prices and thus need to issue an amended invoice to increase the price. How should we declare VAT for such an amended invoice?

Under current VAT regulations, the amended e-invoices need to be declared in the month where the mistake incurred. In your company’s case, the VAT return of July 2022 should be supplemented to include the amended e-invoice issued in September 2022.

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