Value Added Tax (“VAT”) 
 
Notification to apply VAT calculation methods for enterprises that are newly established from 1 January 2014 
On 17 March 2014, The General Department of Taxation (“GDT”) issued Official Letter (“OL”) No. 858/TCT-KK providing guidance on the notification to apply VAT calculation methods for enterprises that are newly established from 1 January 2014 as follows:
•Enterprises established and operating pursuant to the Law on Enterprises from 1 January 2014 are required to lodge a notification to apply the VAT calculation methods in Form No. 06/GTGT (“Form 06”) attached to Circular 156/2013/ TT-BTC dated 6 November 2013 of the Ministry of Finance (“MoF”) to the tax department directly managing them after receiving Enterprise Registration Certificates.
•For newly established enterprises from 1 January 2014 which satisfy the conditions to voluntarily apply the credit method:
•If the enterprises have not lodged Form 06 to register for the credit method and have not announced the issuance of invoices yet, the enterprises should lodge Form 06 for voluntary application of the credit method;
•If the enterprises have not lodged Form 06 to register for the credit method but have already purchased sales invoices from the tax authority, the enterprises will continue to apply the direct method for 2014 and re-determine the tax calculation method for 2015 and 2016 based on the 2014 revenue.
VAT refund 
OL No. 569/TCT-CS dated 26 February 2014 of the GDT allows a VAT refund for an investment project of an enterprise implemented in a different province or city from its headquarters when the input VAT on purchases for the project reaches the refundable limit and the project is still under construction, not commenced operations nor registered for business, tax code or branch. The enterprise is required to prepare a separate VAT refund dossier for this project.
Corporate Income Tax (“CIT”) 
 
Assets not qualified as Fixed Assets (“FA”) under Circular No. 45/2013/TT-BTC 
According to OL No. 661/TCT-CS dated 5 March 2014 of the GDT, if the FA which is depreciated in accordance with Circular No. 203/2009/TT-BTC dated 20 October 2009 of the MoF does not qualify for the conditions for a historical cost basis of the FA in accordance with Article 3 of Circular No. 45/2013/TT-BTC dated 24 May 2013 of the MoF (“Circular 45”), then the residual value of this asset will be allocated to business expenses. The allocation period cannot exceed three years from the effective date of Circular 45 (i.e 10 June 2013).
Upgrading or improving costs for FAs which are leased/borrowed houses 
OL No.677/TCT-CS dated 6 March 2014 of the GDT specifies that the upgrading or improving costs for FAs, that are leased/borrowed houses, may not be creditable for VAT purposes and the enterprise is not allowed to record such expenses for CIT purposes for that period.
Personal Income Tax (“PIT”)
Application of Double Taxation Avoidance Agreement (“DTA”) 
According to OL No. 518/TCT-HTQT dated 21 February 2014 of the GDT, if an individual submits the notification to apply tax exemption or reduction in accordance with the DTA after the statutory deadline but the proposed period does not exceed three years, then the individual may still be considered for application of the DTA. The late submission of such notification will be subject to a penalty for breach of procedures for the tax declaration and exemption but not for tax evasion.