1. Our company is a wholesale supplier of electronic products in Vietnam. As part of our marketing campaign, we offer the trade discount or sale bonus to a number of business individuals within our supply chain. Do we have to withhold any taxes upon the grant of such promotion programs?
Under current regulations, the company must withhold, declare and pay taxes on behalf of business individuals upon the grant of such trade discount or sale bonus. The applicable PIT rate is at 1% VAT and 0.5% PIT. Please note that in case the company bears such PIT and VAT costs for business individuals, the VAT portion will not be creditable for VAT purposes and tax costs will not be deductible for CIT either.
2. In accordance with our internal labor policy, it was mutually agreed that the employees would have 12 days of annual leave. Sometimes, due to urgent production orders, we agreed with the employees so that the employees would go to work on their pre-scheduled/approved annual leave days. How should we pay salary to the employees for the work days during the pre-scheduled/approved annual leave?
According to recent guidance from the Ministry of Labor, Invalid and Social Affairs, in case employees, upon mutual agreement with the employer, have to work on their pre-scheduled/approved annual leave days, such days will be considered overtime and the employer is required to pay the employee at least 300% of the normal daily wage.
3. Our company is an industrial park developer who engages in the factory rental activities. Could our service be qualified for 8% VAT rate as regulated under Decree 15/2022/ND-CP?
In accordance with applicable regulations, factory leasing should be classified as “housing rental and non-residential land use right” (sector code 681410, which belongs to the real estate trading sector) and thus is not qualified for the 8% VAT rate as regulated under Decree 15/2022/ND-CP.