What you can and can’t do: KPMG answers tax queries

By KPMG
Wed, September 13, 2023 | 8:23 am GMT+7

“Importation” of uniforms from a domestic supplier for use in an export processing zone will incur import duties and VAT, say KPMG consultants.

1. Our company is an export and processing enterprise. We plan to purchase uniforms from a domestic supplier for our employees to wear during the manufacturing process at our factory located in an export processing zone. Do we have to pay VAT and import duty on uniforms bought from the domestic supplier?

According to guidance from General Department of Customs, on the ground that the uniform is consumable goods that are used by the employees on daily basis and may be rotated in and out of the export processing zone regularly, there is no adequate basis to conclude that the uniform is used solely within the export processing zone. Therefore, upon importation of the uniform from a domestic supplier, your company must pay import duty and import VAT.

2. We are a 2018 established manufacturing company located at the An Phat Industrial Park in Hai Duong province. Based on regulations upon establishment, we are eligible to a CIT incentive package comprising of 2 years of exemption and subsequent 4 years of 50% reduction, which is applicable to new investment projects in an industrial park not located within a grade I urban area. On May 17, 2019, Hai Duong was recognized as a grade I urban area under Decision 580/QD-TTg issued by the Prime Minister. Due to the change in administrative boundary classification, can we still enjoy the aforementioned CIT incentive package?

According to guidance from the General Department of Taxation, because your company was established in 2018 and originally located at An Phat Industrial Park before the upgrading of Hai Duong province as a grade 1 urban area, the CIT incentive for your company should be assessed based on the prevailing CIT regulation as at your establishment date. In the other words, your company should still be eligible to enjoy the original CIT incentive package.

3. We have a question on non-cash payment condition. In 2020, we settled VND30 million ($1,250) by cash to a supplier for a goods purchase transaction. In 2021, we identified the above improper cash payment transaction and decided that the supplier would return us VND30 million via bank transfer to correct the cash payment transaction. After that, we settled another payment to the supplier via bank transfer to comply with non-cash payment requirement. Can we claim CIT deduction on the expense of goods purchased in 2020 after the correction in 2021?

According to guidance from the General Department of Taxation in a similar case, because the buyer settled payment by cash in 2020, which was completed and fully recorded in the accounting book of 2020, the correction by returning the cash and replacing it by a non-cash payment in 2021 cannot change the accounting record of the 2020 transaction. In other words, despite the correction in 2021, your company cannot claim CIT deduction on the goods purchase due to the violation of non-cash payment condition.

Comments (0)
  • Read More
Vietnamese conglomerate Bamboo Capital posts 36-fold profit growth in Q3

Vietnamese conglomerate Bamboo Capital posts 36-fold profit growth in Q3

Ho Chi Minh City-based Bamboo Capital Group recorded an after-tax profit of VND331.2 billion ($13.1 million) in the third quarter of 2024, an astounding 36-fold expansion year-on-year.

Bamboo Capital - Sat, November 2, 2024 | 9:41 am GMT+7

ThaiBev to bag $54 mln from Sabeco’s upcoming dividend payout

ThaiBev to bag $54 mln from Sabeco’s upcoming dividend payout

Vietnam Beverage, wholly owned by Thai Beverage (ThaiBev) will rake in VND1,374 billion ($54.26 million) worth of dividend from Ho Chi Minh City-based top brewer Sabeco.

Companies - Sat, November 2, 2024 | 9:13 am GMT+7

Steel heavyweight Hoa Phat pours over $2 bln into central Vietnam complex

Steel heavyweight Hoa Phat pours over $2 bln into central Vietnam complex

Leading Vietnamese steelmaker Hoa Phat had invested more than VND52.5 trillion ($2.08 billion) in its Dung Quat Iron and Steel Integrated Complex (Dung Quat 2) in the central province of Quang Ngai as of Q3/2024.

Industries - Sat, November 2, 2024 | 8:00 am GMT+7

Vietnam becomes Australia’s fastest-growing inbound market

Vietnam becomes Australia’s fastest-growing inbound market

The number of Vietnamese tourists to Australia has grown significantly after the Covid-19 pandemic, with nearly 178,000 reported in the 12 months to August 2024, according to a Friday press release by the Australian Minister for Trade and Tourism’s Office.

Southeast Asia - Fri, November 1, 2024 | 10:02 pm GMT+7

Study finds shift in Thai consumers’ spending patterns

Study finds shift in Thai consumers’ spending patterns

Consumers in Thailand are shifting their spending focus to experiences and investments, according to the latest ASEAN Consumer Sentiment Study (ACSS) by United Overseas Bank (UOB).

Southeast Asia - Fri, November 1, 2024 | 10:00 pm GMT+7

Energy security, digitalization key to Indonesia's economic growth

Energy security, digitalization key to Indonesia's economic growth

The Indonesian government is prioritizing long-term economic growth through energy security, digitalization, and natural resource industrialization, according to Deputy Minister of Finance Thomas Djiwandono.

Southeast Asia - Fri, November 1, 2024 | 9:58 pm GMT+7

Vietnam PM's Middle East tour creates breakthroughs in economic, trade, investment cooperation: FM

Vietnam PM's Middle East tour creates breakthroughs in economic, trade, investment cooperation: FM

Prime Minister Pham Minh Chinh’s freshly ended six-day trip to the UAE, Saudi Arabia and Qatar has produced important outcomes, demonstrating the growing relations between Vietnam and the three Middle-East countries, Deputy Prime Minister and Foreign Minister Bui Thanh Son told the Vietnam News Agency.

Politics - Fri, November 1, 2024 | 9:25 pm GMT+7

Vietnam, Qatar look to tap potential for energy, oil & gas collaboration

Vietnam, Qatar look to tap potential for energy, oil & gas collaboration

Vietnam and Qatar have recognized the significant potential for further collaboration in multiple sectors such as energy, oil and gas, especially LNG, agriculture, Halal industry, and banking.

Politics - Fri, November 1, 2024 | 9:02 pm GMT+7

Thailand bans export of raw palm oil until December

Thailand bans export of raw palm oil until December

Thailand's Department of Internal Trade has temporarily banned the export of raw palm oil due to reduced production caused by drought and plant diseases.

Southeast Asia - Fri, November 1, 2024 | 8:31 pm GMT+7

Envision Energy to build $420 mln wind power plant in Vietnam from June 2025

Envision Energy to build $420 mln wind power plant in Vietnam from June 2025

Envision Energy Singapore Pte Ltd, under China-based Envision Energy, aims to kick off construction of the 300-MW Envision Nam Po wind power plant in Vietnam’s northern mountainous province of Dien Bien in June 2025.

Energy - Fri, November 1, 2024 | 8:30 pm GMT+7

Indonesia to ban plastic waste imports from 2025

Indonesia to ban plastic waste imports from 2025

The Indonesian government will start imposing a ban on the import of plastic waste from the beginning of next year, according to Minister of Environment Hanif Faisol Nurrofiq.

Southeast Asia - Fri, November 1, 2024 | 8:29 pm GMT+7

Islamic economy makes up 48% of Indonesia’s GDP

Islamic economy makes up 48% of Indonesia’s GDP

The contribution of Islamic business activities to Indonesia’s GDP has been estimated at 48%, local authorities reported at the 11th Indonesia Sharia Economic Festival (ISEF).

Southeast Asia - Fri, November 1, 2024 | 8:28 pm GMT+7

Restructured construction giant Tracodi gets set to execute ambitious plans

Restructured construction giant Tracodi gets set to execute ambitious plans

After changing its name and restructuring as a group, Tracodi Construction Holdings JSC (HoSE: TCD), a member of Bamboo Capital Group (HoSE: BCG), has completed a leadership shake-up and is poised to achieve rapid growth.

Bamboo Capital - Fri, November 1, 2024 | 4:43 pm GMT+7

Philippines requests companies to pay for plastic waste treatment

Philippines requests companies to pay for plastic waste treatment

The Philippines expects its "Extended Producer Responsibility" (EPR) that came into force last year will help it curb plastic waste

Southeast Asia - Fri, November 1, 2024 | 4:30 pm GMT+7

Indonesia warns of rising online terrorism

Indonesia warns of rising online terrorism

Indonesia's National Counter-Terrorism Agency (BNPT) has warned of a shift in terrorism tactics, moving from public attacks to online platforms that target vulnerable groups, particularly women and children.

Southeast Asia - Fri, November 1, 2024 | 4:29 pm GMT+7

Singapore establishes global fintech network

Singapore establishes global fintech network

The Monetary Authority of Singapore (MAS) on Wednesday announced that it has established a “Global Finance & Technology Network” (GFTN) to propel Singapore’s reputation as a premier global fintech hub into its next phase and enhance global connectivity.

Southeast Asia - Fri, November 1, 2024 | 4:28 pm GMT+7