Personal income tax for extra hour salary

1. Due to business demands, our company implemented overtime at work, in certain cases exceeding 200 hours per year. Can related salaries be exempted from PIT?

Under the provision of the Labor Code, the number of overtime working hours should not exceed 200 hours per employee per year with certain exceptions subject to advance notification of labor management authorities. In case your company is not qualified to organize overtime of more than 200 hours per employee per year, related salaries should not be eligible for PIT exemption.

2. Our company sponsored some medical equipment for hospitals during the Covid-19 pandemic. Following VAT regulations, we issued output VAT at a 10% rate upon delivery and recorded uncollectable output VAT into our operating expenses. Could we claim CIT deduction for expenses related to output VAT?

Current CIT regulations do not have a provision allowing taxpayers to claim CIT deduction for uncollectable output VAT. Therefore, tax authorities may reject CIT deduction for related expenses.

3. We run a joint stock company that entered operation in 2019. At present, we have accumulated input VAT of VND12 billion ($517,500). Our company will soon be converted into a limited liability company. Is there any chance for us to claim a VAT refund pertainting to accumulated input VAT upon business transformation?

In accordance with current VAT regulations, if a company registers to declare VAT by credit method, it will be granted a VAT refund for any accumulated input VAT upon business model transformation, conversion, combination, merger, separation, dissolution, corruption, termination of operation.

Since the conversion from a joint stock company to a limited liability company is considered business model transformation according to the provisions of the Law on Enterprises, the company should be entitled to the VAT refund if satisfying prescribed dossier conditions.

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