Income tax exemptions to rise
Income tax exemptions to rise
The National Assembly passed the revised Law on Personal Income Taxation on November 22.
Under the new provisions, the personal exemption per taxpayer shall increase to VND9 million (US$429) per month or VND 108 million ($5,143) per year, a substantial increase from the current VND4 million ($190) per month or VND48 million ($2,286) per year. The exemption for each dependent will rise from the current VND1.6 million ($76) per month to VND3.6 million ($171) per month.
The revised law also adjusts tax rates based on the consumer price index (CPI). Accordingly, if inflation rises by more than 20 per cent from the date the law takes effect on July 1, 2013, the Government may ask the Standing Committee of the National Assembly to further increase exemption levels.
The new law also removes some kinds of income from the category of taxable wages and salaries, including remunerations of all kinds; sums earned for participation in business associations, boards of directors, control boards, management boards and other organisations; monetary or non-monetary benefits received by taxpayers; and bonuses and rewards.
Foreigners to be able to join co-operatives
The National Assembly passed an amended Law on Co-operatives on November 20. Unlike the 2003 version of the law, the new law allows foreigners who legally reside in Viet Nam and are age 18 or older and have fully civil capacity to become members of co-operatives.
Under the law, a co-operative is defined as a collective economic organisation with legal status, jointly owned and voluntarily formed by at least seven members who co-operate in production and other business operations to meet the common demand of the members on a basis of individual control, responsibility, equality and democracy in co-operative management.
To become a member of a co-operative, the foreigner must (i) need to co-operate with members to use the products and services of the co-operative; (ii) voluntarily join and approve the charter of the co-operative; (iii) contribute capital to the co-operatives but not exceeding 20 per cent of the co-operative's charter capital; and (iv) comply with conditions of the charter.
The law also provides for termination of member status by death, absence, or restriction or loss of civil capacity, such as through imprisonment; voluntarily leaving the co-operative; expulsion from the co-operative; failure to contribute capital as committed; and in other cases. The power to terminate member status will belong to the board of management or general members meeting in each case.
The new law takes effect next July 1.
New rules on taxation of imported goods
The President promulgated the revised Law on Tax Administration on November 20. The law requires enterprises importing raw materials for production to: (1) produce the goods to be exported in Viet Nam; (2) be engaged in import-export operations for at least two consecutive years from the date of registration of customs declarations without committing acts of trade or tax fraud and without owing overdue taxes or fines; (3) comply with laws on accounting and records; and (4) make payments through the banking system in accordance with Vietnamese law. If an enterprise fails to meet these requirements, it must provide a guarantee of tax payments from a credit institution.
Taxes on good temporarily imported for re-export must be paid in advance under the new law, unless taxes are guaranteed by a credit institution. Taxes on other goods must be paid before customs clearance or before the goods are released.
The new law, which also contains provisions on periodic tax payments, takes effect next July 1.
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