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Vietnam on Track to Tax Time Target - Vietnam Briefing

HANOI – The Department Deputy Head, Hoang Thi Lan Anh, of Vietnam’s General Department of Taxation Reform has confirmed the government’s commitment to reduce the time spent paying taxes and social insurance in Vietnam to the ASEAN average of 171 hours by the end of 2015.

The Department is following its commitments to Resolution 19/NQ-CP of March 2014, which compels the tax authorities to streamline their filing and payment procedures.

The World Bank’s Doing Business project found from 2014 data that tax payment procedures were found to take up to 872 hours for enterprises in Vietnam, which have to pay taxes up to 32 times per year. The biggest contributors to time spent were the 12 annual employer paid social security contributions, taking a total of 335 hours to pay. These were followed by 12 annual VAT payments, taking 320 hours, and five annual corporate income tax payments, taking 217 hours. The project ranked Vietnam 173rd of 189 jurisdictions for ease of paying taxes, only four places above Brazil, where paying taxes took on average 2,600 hours per year, and far below fourth place Hong Kong and fifth place Singapore, where it took on average 78 and 82 hours respectively.

RELATED: Dezan Shira Tax and Compliance

Joana Nasr, of the World Bank Paying Taxes team and co-author of a report into paying taxes in 2015, recommended that regulations be simplified regarding corporate income tax, compulsory insurance, and value-added tax declarations, and that tax declaration and payment be digitized further.

Deputy Head Cao Anh Tuan has said the revisions to the regulations have so far reduced the overall payment time by 370 hours. In order to reach the target of 171 hours laid out in Resolution 19, tax payment time will eventually be cut by 415.5 hours to 121.5 hours, and social insurance by 285.5 hours to 49.5 hours.

RELATED: Navigating Personal Income Tax in Vietnam

In 2015, Vietnam is making a number of changes to its tax regulations. These reforms include changes to how personal income tax (PIT) is calculated. The new regulations state that those involved in property and stock transfers will pay PIT on the transfer value only. Head of the General Department of Taxation’s Personal Income Tax Management Division, Nguyen Thi Hanh, has explained that the changes, brought in due to reporting failures in the previous system, will result in a PIT amounting to two percent of the transfer value of a property deal, and 0.1 percent of a stock transfer. The new regulations oblige trading households with an annual revenue over VND100m (US$4,680) to pay PIT, from 0.5 to five percent.


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