InTouch Australia Malaysia

Asia Pacific VAT/GST Alert
InTouch
with indirect tax news
Issue 04/13
Australia
• GST Reform Measures – Government
Announcements
• GST rulings
• GST Cases Update - GST adjustments for
the recipient of a supply of a going concern
China
• Inclusion of postal services and railway
transportation in the B2V Pilot Programme
India
•
•
•
•
Notifications/Circulars for VAT
VAT case laws
Notifications/Circulars for Service Tax
Service Tax case law
Indonesia
• Increase in the delivery threshold of small
entrepreneurs
• Introducing the Electronic Value Added Tax Invoice
Japan
• 2014 Ruling Party’s Tax Reform Outline
Malaysia
• Proposed implementation of GST
New Zealand
• New GST registration rules for nonresidents from 1 April 2014
Welcome to issue 04/13 of InTouch*
which covers developments in VAT/GST
in Asia Pacific during the period October
2013 to December 2013.
Please feel free to reach out to any of the
PwC contacts on the back of this issue.
Singapore
• Documentation to support input tax claims
for entertainment expenses
• GST treatment of sale of virtual currencies
South Korea
• Expanding scope of self-supply for small
non-business vehicle related expenses
• Non-deductible input VAT for VAT exempt
transaction
• Proxy payment of VAT in a comprehensive
business transfer
• Eased filing requirement for real estate
lease service providers
Taiwan
• Eligibility for overpaid VAT to be refunded
before verification by tax authorities
Thailand
• Deferment of date on which additional
information will be required to be
included on tax invoices, debit notes,
credit notes, output and input VAT reports
Vietnam
• New decree on VAT
• Reverting to the old rules for VAT zerorating of exported services
• Removal of the 6-month time limit to
claim creditable input VAT
• Clarification of notification requirement
for free of charge goods
• VAT deduction method
• New rules on claiming VAT refunds
Australia
GST Reform Measures – Government
Announcements
• In November and December 2013 the new
Federal Government announced its plans
on a number of GST measures and reforms
announced by the previous Government,
which were not yet legislated. • The following announcements made by the
previous Government will not proceed:
– Changes to the GST grouping
membership rules
– Changes to the “change of use” and
other adjustment provisions
– A review of the voucher provisions in the
GST law
– A review of the provisions of the GST
law relating to multi-party transactions
– A review of the provisions of the GST
law relating to partnerships and bare
trusts
– Reviewing the low value import
thresholds for customs duty and GST
purposes
• The following announcements will proceed
(but with no firm timetable announced):
– Measures to restrict GST refunds
– Amendments to the “connected with
Australia” rules
– Replacing the GST-free concessions
for the supply of going concerns
and farmland with a reverse charge
mechanism
GST Rulings
• GSTD 2013/4: This ruling sets out the
Commissioner’s view that consideration
provided by an endorsed charity, a giftdeductible entity or a government school
for acquiring assets that diminish in value
over time can be taken into account in
determining whether a supply is GST-free
pursuant, to the extent the consideration
provided reasonably relates to that supply.
• GSTD 2014/1: This ruling sets out the
Commissioner’s view that a taxpayer can
only object to a private ruling that the
Commissioner makes, if the Commissioner
has not made an assessment of the
taxpayer’s net amount for the tax period
in which it took into account an amount of
incorrect GST.
For tax periods starting on or after 1 July
2012, the Commissioner is treated as having
made an assessment of a taxpayer’s net
amount when the taxpayer lodges a GST
return. For tax periods commencing on or
after 1 July 2012, there would generally be
no objection rights.
• GSTR 2013/D2: This draft ruling
(released in October 2013) sets out
the Commissioner’s view on the GST
consequences of supplies made by an
operator of a ‘moveable home estate’ (for
example a gated community or retirement
village). The draft ruling was withdrawn
(after receiving feedback), and the ATO has
confirmed that it will not change the GST
treatment of moveable home estates, which
will continue to be treated as commercial
residential premises with the same GST
rules as for long-term accommodation.
• PS LA 2013/6: This practice statement sets
out the Commissioner’s policy in relation to
the collection of debts arising from indirect
tax laws (which include GST, fuel tax,
luxury car tax and wine equalisation tax)
from GST groups and GST joint ventures. In
particular, the Practice Statement concerns
the use of indirect tax sharing agreements,
and also considers the collection of debts
arising from indirect tax laws from other
entities that are not GST groups or GST
joint ventures.
China
GST Cases Update
GST adjustments for the recipient of a
supply of a going concern
The Commissioner has applied for special leave
to appeal to the High Court against the Full
Federal Court’s decision in MBI Properties Pty
Limited v Commissioner of Taxation [2013] CAFC 112. The Full Federal Court held that the
taxpayer was not required to make an increasing
adjustment under Division 135 of the GST Act
as a result of its acquisition of units in a serviced
apartment complex which were subject to leases
to a management company, and made findings in
relation to the nature of leases for GST purposes.
In the meantime, the Australian Taxation Office
(ATO) has also issued an Interim Decision Impact
Statement (DIS) in relation to the Full Federal
Court’s decision. According to the interim DIS,
pending the outcome of the Commissioner’s
application for special leave to appeal to the
High Court of Australia, the ATO will continue
to administer the law in accordance with the
existing rulings. Taxpayers who lodge returns on
that basis will be protected from having to pay
any underpaid tax, penalty or interest, should the
views expressed in those rulings be found to be
incorrect.
For more information, please contact:
Peter Konidaris
[email protected]
+61 3 8603 1168
Inclusion of postal services and
railway transportation in the B2V Pilot
Programme
• Exemption from VAT of the services of
international freight forwarding under certain
conditions; and
China’s Ministry of Finance and the State
Administration of Taxation issued Caishui
Circular [2013] 106 (“Circular 106”), which
replaces the current Circular [2013] 37 as
the key Circular governing the Business
Tax to Value-Added Tax (the “B2V”) Pilot
Programme.
• Deduction of the principal amount of the
leased asset purchased from the lessee (in
addition to the interests incurred) when
determining the value of the VAT sales of
qualifying lessors in a financing sale and lease
back model.
The Circular enters into force on 1 January 2014.
The key changes introduced in Circular 106
include:
• Inclusion of postal services and railway
transportation in the B2V Pilot Programme
at the VAT rate of 11%;
• Inclusion of courier services as a form of
Auxiliary Logistics Services subject to VAT
at 6%;
• Deduction of freight payments for
international transportation made to
carriers when determining the value of
the VAT sales of international freight
forwarders;
For more information, please contact:
Alan Wu
[email protected]
+86 10 6533 2889
India
Indirect Taxes
Notifications/Circulars for VAT
Andhra Pradesh – The mandatory usage
of e-way bills has been deferred till further
orders to be issued in this regard.
Haryana – Effective 6 December, 2013,
the sale of goods to the Government at
concessional rate of tax against certificate
VAT-C3 has been discontinued.
Uttar Pradesh – Effective 26 September
2013, the input tax credit retention rate in
case of stock transfers made outside the State
has been reduced from 4% to 2%. Effective 8 October 2013, in respect of sales
made by registered dealers to specified
entities, such entity is required to deduct
tax at source at the rate of 4% at the time of
making payment to the registered dealer. Tamil Nadu – Effective 11 November 2013,
a dealer is liable to reverse input tax credit
by 3% in respect of goods sold on inter-State
basis against form C. Further, the rate of
input tax credit reversals in respect of stock
transfers made outside the State has been
increased from 3% to 5%.
Punjab – A one-time amnesty scheme in the
name of “Voluntary Disclosure Scheme” has
been introduced for select categories of defaults
made under the Punjab VAT Act, 2005 and the
Central Sales Tax Act, 1956 subject to prescribed
conditions and restrictions under the scheme.
VAT Case Laws
• The larger bench of Supreme Court, in
Larsen & Toubro Ltd v State of Karnataka
(2013-VIL-03-SC-LB), held that the contract
for sale of flats where the consideration is
to be received in installments linked to the
construction is a species of works contract.
Accordingly, the State Government has the
constitutional right to levy VAT on such sale
of flats in the State. • The Supreme Court, in State of UP and Ors
v Jaiprakash Associates Ltd (2013-46-PHT357-SC), held that any Notification issued
by the State Government which results in
discrimination between goods imported
from other States and similar goods
manufactured/produced within the State
and therefore hinders the free movement
of goods from one State to another, violates
articles 301 and 304(a) of the Constitution
of India. • The Calcutta High Court, in Tata Motors
Finance Ltd v Assistant Commissioner of Sales
Tax (2013-VIL-85-Cal), held that a bank or an
NBFC falls within the ambit of the definition
of a ‘dealer’. Consequently, the bank or the
NBFC would be liable to pay VAT in respect of
disposal of vehicles for recovery of loan.
• The Calcutta High Court, in Cipla Ltd v
Commissioner, Commercial Tax (2013-NTNVol 53-208), held that declaration in form
F covering transactions of stock transfer for
more than one month could not be rejected
by the authorities on the ground that CST
laws required dealers to issue form F for
transactions of stock transfer only for a period
of one calendar month.
• The Rajasthan High Court, in Assistant
Commercial Tax Officer v Electrolux
Kelvinator Ltd (2013-NTN-Vol 53-210),
held that optional service charges recovered
from buyers who intend to avail the benefit
of extended warranty period, would not be
included in the sale price. The Court observed
that the definition of sale price clearly
envisages that only that amount which was
paid or payable to a dealer as consideration
for sale of goods (including the same charged
for anything done by the dealer in respect of
goods at the time of, or before, the delivery
of goods) would be included in the sale
price. The optional service charges had been
recovered for future acts and not for goods
delivered, and thus could not be included in
the sale price.
Indonesia
Notifications/Circulars for Service Tax
Case Laws
Increase in the delivery threshold of
small entrepreneurs
• The Central government has exempted the
services provided in relation to serving of
food and beverages by factory canteen having
the facility of air-conditioning or central airheating from the levy of service tax.
• The Allahabad High Court, in K Anand
Caterers v Union of India (2013-TIOL-741HC-ALL-ST), held that during the pendency
of petitioner’s application under the Service
Tax Voluntary Compliance Encouragement
Scheme, 2013 (STVCES), recovery
proceedings under section 87 cannot be
initiated.
The Minister of Finance (MoF) increased the
delivery threshold of small entrepreneurs for
VAT purposes from IDR 600 million per annum
to IDR 4.8 billion (approximately USD 400K)
per annum. The increase has been effective
since 1 January 2014. • The CBEC has clarified the applicability
of service tax on services provided by a
restaurant in relation to serving of food
and beverages in specific situations such
as common kitchen being used for airconditioned as well as non-air conditioned
restaurant, sale of Maximum Retail Price
(“MRP”) based goods, etc.
• Effective from 1 January, 2014 the
mandatory e-payment threshold limit of
service tax has been reduced from INR 1 million to INR 0.1 million.
• The Punjab and Haryana High Court, in
Barnala Builders & Property Consultant v
DCCEST (2013-TIOL-1016-HC-P&HST),
held that the order passed by the designated
authority, rejecting the application under
the Service Tax Voluntary Compliance
Encouragement Scheme, 2013 (STVCES),
could be appealed under section 86 of the
Finance Act, 1994.
For more information, please contact:
Vivek Mishra
[email protected]
+91 124 330 6518
Anita Rastogi
[email protected]
+91 124 330 6531
If the threshold is exceeded, a small
entrepreneur must register to be a VAT-able
entrepreneur and is required to carry out VAT
obligations, including collecting VAT on the
deliveries of taxable goods/ services.
Introducing the Electronic Value Added
Tax Invoice
The MoF has recently introduced an electronic
Value Added Tax (VAT) invoice through
Regulation No.151/PMK.011/2013 (PMK-151)
dated 11 November 2013 regarding procedures
of VAT invoice preparation, amendment or
replacement.
The electronic-based VAT invoice (e-VAT
invoice) is intended to make it easier for
VAT-able Entrepreneur to collect VAT on the
delivery of taxable goods/services by making
the best use of information technology. An
e-VAT invoice is mandatory for certain PKPs
that fulfill requirements to be set out by
the Indonesian tax office (DGT) in a new
regulation. The new DGT regulation will cover:
Japan
1. Criteria for mandatory use of e-VAT invoice;
2. Electronic signatures; and
3. Procedures to request information with
regards to damaged or missing e-VAT invoice.
A decision letter will be issued by the DGT for
each VAT-able Entrepreneur that fulfils the
requirements.
Mandatory VAT-able Entrepreneurs have to use
e-VAT invoice for their local delivery of taxable
goods and/ or services, as well as for the delivery
of assets that are not intended for sale. If the
VAT-able Entrepreneurs do not comply with this
requirement (PMK-151), they will be deemed not
to have issued a VAT invoice, and will be subject
to administrative sanction of 2% from the VAT
imposition base.
A paper-based VAT invoice is still applicable
for the VAT-able Entrepreneurs excluded from
the DGT’s criteria and on export-oriented
transactions (i.e. export of VAT-able tangible/
intangible goods and export of VAT-able services).
For more information, please contact
Abdullah Azis
[email protected]
+62 21 52890601
2014 Ruling Party’s Tax Reform Outline
In the 2014 Ruling Party’s Tax Reform Outline
dated 12 December 2013, the ruling coalition
(Liberal Democratic Party and New Komeito)
announced the Japanese Consumption Tax
(“JCT”) reform plan and a plan to introduce
reduced rates for daily necessities (such as
food) in connection with the JCT when the JCT
rate is 10%. The reform plan is subject to further discussion
until 31 December 2014.
Also, during a Cabinet Decision dated
24 December 2013, the ruling coalition
announced the following JCT reform plan
which is expected to pass through the Diet
around end of March 2014.
1) Change of business classification under Simplified Taxation System
Currently, business enterprises with taxable
sales during the “base period” (generally the
year beginning two years before the tax year
concerned) of 50 million yen or less can take
a deemed input JCT credit at the rates shown
below on taxable sales, instead of a credit
based on the actual input JCT and taxable sales
ratio, if they choose to do so.
Once the Simplified Taxation System is chosen,
it cannot be changed for a period of two years.
The rates of deemed input JCT credit on
taxable sales for the different classification of
businesses prior to 1 April 2015 are as follows:
• Wholesalers: 90%
• Retailers: 80%
• Manufacturing, construction, mining,
farming, forestry, fishing: 70%
• Services, transportation, communication,
real estate: 50%
• Others: 60%
The business classification above will be
amended for the tax year beginning on or after
1 April 2015 as follows:
• Wholesalers: 90%
• Retailers: 80%
• Manufacturing, construction, mining,
farming, forestry, fishing: 70%
• Services, transportation, communication,
financial, insurance: 50%
• Real estate: 40%
• Others: 60%
2) Change of taxable sales ratio calculation
for transfer of Monetary Claim
Currently, where the taxable sales ratio is less
than 95% or when a taxable enterprise has
taxable supplies during the current period
exceeding 500 million yen, the input JCT credit
will generally be reduced by multiplying the
taxable sales ratio. Malaysia
Where a Monetary Claim (excluding account
receivables from the supply of goods
or services) is transferred, 100% of the
transferred amount of such Monetary Claim
is added to the denominator of the taxable
sales ratio as non-taxable sales and thus, the
input JCT credit is diluted.
a) The total cost of goods exceeds 5,000 yen
(per shop on the same day).
b) The goods are packaged in a manner
designated by the relevant authorities.
c) The buyer prepares a written oath to verify
that the buyer carries the goods out of Japan
within 30 days from the purchase date.
Proposed implementation of GST
For transfers made on or after 1 April
2014, only 5% of the transferred amount of
such Monetary Claim will be added to the
denominator of the taxable sales ratio as nontaxable sales (like a transfer of shares).
4) Increase in JCT rate
The amended GST Bill and GST Regulations
have not been released but it is expected that
the law will be passed sometime in the first
quarter of 2014 during the first Parliament
sitting.
3) JCT exemption on consumables for
foreign tourists
At present, JCT is exempted on the purchase
of designated goods (excluding consumables)
from certain designated shops in Japan by
non-residents. The goods must be purchased
for the private use of the buyer and the total
cost of the goods purchased must exceed
10,000 yen (per shop on the same day) for
the exception to apply.
Due to the 2014 tax reform, non-residents
will be able to enjoy a JCT exemption on
consumables made on or after 1 October
2014 on items such as food, drinks, tobacco,
medicine and cosmetics. JCT is exempted
up to 500,000 yen (per shop on the same
day) for goods purchased in and taken out of
Japan, if all of the below conditions are met:
The JCT rate will be increased in two steps to 8%
from 1 April 2014 and 10% from 1 October 2015.
For more information, please contact:
Masanori Kato
[email protected]
+81 3 5251 2536
Kotaku Kimu
[email protected]
+81 3 5251 2713
The Government of Malaysia has announced in
the 2014 Budget that GST will be implemented
on 1 April 2015 to replace the existing sales tax
and service tax. The threshold for mandatory
registration is RM500,000. Meanwhile, the public can view and provide
feedback on the draft Industry and Specific
GST guides, which can be found on the official
GST portal of the Royal Malaysian Customs
(http://gst.customs.gov.my/).
For more information, please contact:
Wan Heng Choon
[email protected]
+60 3 2173 1488
New Zealand
New GST registration rules for nonresidents from 1 April 2014
Summary of the new rules
Currently, only those non-residents who
make taxable supplies in New Zealand are
able to register for GST and claim GST on
their costs. From 1 April 2014, non-residents
who do not make taxable supplies in New
Zealand will also be able to register for GST
under a special regime.
In order to register under the new regime, the
non-resident must:
• Not be carrying on or intending to carry
on a taxable activity in New Zealand,
and not become or intend to become a
member of a group of companies carrying
on a taxable activity in New Zealand;
• Be registered for consumption tax in the
country they are resident, or if there is
no applicable consumption tax have a
level of taxable activity (NZ $60,000 per
annum) that would render them liable to
be registered if they were carrying out that
activity in New Zealand; and
• Be likely to incur at least $500 of input
tax for the first taxable period after
registration; and
• Not perform services that will likely be
received by a person in New Zealand who is
not GST-registered.
If the non-resident subsequently begins making
taxable supplies in New Zealand, they will be
deemed to have registered under the existing
general GST registration rules.
Inland Revenue will be obliged to refund the GST
within 90 working days of the return being filed.
What does this mean?
This important change means:
• Non-residents will be able to recover GST on
costs incurred in New Zealand; and
• Non-residents will no longer have to enter into
special agreements with resident businesses to
ensure they can get into the GST net. This has
proven to be problematic in the past.
Inland Revenue has provided two classic
situations where non-residents will be able to
recover GST:
1) Costs relating to a training course taken by
employees in New Zealand, and
2) Costs of running a management conference
in New Zealand. Other scenarios where the
new rules could apply include feasibility
studies, set up costs, transaction and advisory
costs, advertising, marketing, and many other
categories of business costs.
For more information, please contact:
Eugen Trombitas
[email protected]
+64 9 355 8686
Gary O’Neill
[email protected]
+64 9 355 8432
Ian Rowe
[email protected]
+64 4 462 7274
Singapore
Documentation to support input tax
claims for entertainment expenses
GST treatment on sale of virtual
currencies
The Inland Revenue Authority of Singapore
(“IRAS”) is allowing input tax claims on
entertainment expenses without the need
for the business to maintain a valid tax
invoice addressed to the business. The IRAS has issued guidelines on the GST
treatment on the sale of virtual currencies
(e.g. Bitcoins). The supply of virtual currency
is treated as a supply of services which does
not qualify for GST exemption.
Specifically, a simplified invoice is sufficient
to support the input tax claim as long as
there are alternative documentary payment
evidence and information on entertainment
details (e.g. name of person entertained,
purpose of entertainment) to support the
input tax claims. The concession is only
applicable to food and drinks.
Businesses using virtual currencies to pay for
goods or services will be treated as having
conducted a barter trade. In other words,
there are two supplies made – one by the
supplier who supplies the goods and services,
and another by the business who use virtual
currencies to pay the supplier.
The new rule will take effect from 1 February 2014.
Consequent to the above, GST will need to
be charged on each supply if the respective
supplier is GST-registered. The IRAS has
indicated that it will regard the payment to a
supplier belonging outside Singapore using
virtual currency as a zero-rated supply made
by the payer.
In addition, GST is not chargeable on the
use of virtual currencies to buy virtual goods
or services within the gaming world, until
the time when the virtual currencies are
exchanged for real monies, goods or services.
For more information, please contact:
Koh Soo How
[email protected]
+65 6236 3600
Weijie Lin
[email protected]
+65 6236 7481
South Korea
Expanding Scope of Self-supply for
Small Non-business Vehicle Related
Expenses
In the case where a company that engages in
transportation and other specified business
manufactures or purchases small vehicles
and goods needed for the maintenance,
but does not use them directly for its own
business purposes, such transactions shall
be regarded as a “self-supply”. A “selfsupply” is treated as a taxable event under
the VAT Law. The scope of self-supply has been expanded
under the amended VAT Law to include
companies engaged in all other businesses
than the specified one in such cases.
This amendment will take effect for tax
returns filed on or after 1 January 2014.
Non-deductible Input VAT for VATexempt Transaction
Under the current VAT system, input VAT
that is assessed inappropriately upon the
supply of VAT-exempt goods or services
could be deducted by the purchaser if the
supplier has paid the assessed VAT to the
respective tax authorities. The amended
VAT law, however, shall no longer permit
input VAT deductions in the foregoing case.
In principle, the input VAT deduction shall
not be allowed in any case of supplying VATexempt goods or services (except in the event
of a comprehensive business transfer) from
1 January 2014, irrespective of whether the
supplier has paid the VAT or not. However, the input VAT deduction could be
allowed to the supply of VAT-exempt goods or
services made prior to 31 December 2013.
Proxy Payment of VAT in a
Comprehensive Business Transfer
To avoid disputes as to whether certain
business transfers should be characterised as a
VAT-exempt comprehensive business transfer
transaction, a transferee in a business transfer
shall be allowed to account for and pay the VAT
on behalf of the transferor.
If a transferee has filed the output VAT along
with payment as of the transaction date, the
transferee is allowed to deduct the input VAT in
the VAT return. These changes will be applied to business
transfer taking place on or after 1 January 2014.
Eased Filing Requirement for Real
Estate Lease Service Providers
The amended VAT Law has relieved a filing
burden of real estate lease service providers
by eliminating the requirement that they must
submit cash sales statements in addition to
their real estate lease service fee details in
filing their VAT returns.
These changes will be applied to VAT return
filing on or after 1 January 2014.
For more information, please contact:
Dong-Keon (D.K.) Lee
[email protected]
+82 2 709 0561
Taiwan
Thailand
Eligibility for overpaid VAT to be
refunded before verification by the
competent tax authority
• the business entity is liable for unsettled
penalties imposed on VAT related
violations; or
A business entity which has de-registered due
to merger, business transfer, dissolution or
cessation of business may apply for refund
of the overpaid VAT before verification by
the competent tax authority if a certification
report has been issued by a Certified Public
Accountant, which states that the overpaid
VAT position is adequate. • the business entity has been identified as
having abnormal overpaid VAT position
based on the analysis performed by the
competent tax authority on the VAT returns
filed and relevant information obtained.
In other words, the report should either state
that no adjustment is required or relevant
adjustments have been made and the business
entity has voluntarily made up the tax
shortfall and completed amended VAT filings,
if required.
However, a business entity cannot apply
“refund first, verification to follow” scheme
on overpaid VAT under any of the following
circumstances:
• the business entity failed to file its
dissolution and liquidation income tax
returns;
• the business entity is still undergoing tax
audit by the competent tax authority;
For more information, please contact:
Lily Hsu
[email protected]
+886 2 27296666 Ext. 26207
Li-Li Chou
[email protected]
+886 2 27296666 Ext. 23684
Deferment of date on which
additional information will be
required to be included on tax
invoices, debit notes, credit notes,
output and input VAT reports
In the previous issue of InTouch, it was
mentioned that there will be a requirement
to include additional information on full
format tax invoices, debit notes, credit notes
as well as various VAT reports.
The requirements are basically to include
the tax ID number of the customer and a
notation as to whether both the seller and
customer are using a head office or a branch
for the transaction.
The effective date for the implementation of
these requirements has been deferred from
1 January 2014 to 1 January 2015.
For more information, please contact:
Somboon Weerawutiwong
[email protected]
Tel: +662 344 1000 Ext. 1247
Vietnam
New decree on VAT
Decree 209 guiding the implementation of the
amended VAT law has just been issued, and is
effective from 1 January 2014. Some notable
changes include:
Reverting to the old rules for VAT zero
rating of exported services
Exported services will now be zero-rated if the
services are consumed outside of Vietnam. This will make the zero rating of exported
services more difficult in many cases, as the tax
authorities can be expected to take the view
that most services sold to a customer overseas
will be consumed in Vietnam if they are
performed in and relate to Vietnam
Companies should review their VAT treatment
of exported services which they provide to
ensure that any zero rating still has a clear
technical basis.
Removal of the 6-month time limit to
claim creditable input VAT
Taxpayers can now make additional VAT
declarations any time before the tax authorities
do a tax audit.
Clarification of notification requirement
for free of charge goods (FOC)
The taxable price of goods/services used for
promotional purposes is zero if the promotional
programs are notified or registered with the
provincial department of industry and trade in
accordance with the commercial regulations.
If promotional programs are not properly
notified/registered, the taxable price of these
goods/services is their market value.
VAT deduction method
Taxpayers with VATable revenue of less than
VND 1 billion per annum are required to pay
VAT under the “direct method” (where VAT is
paid based on a company’s “value added”) unless
they specifically register to pay VAT under the
“deduction method” (where VAT is paid under
the conventional credit method).
For foreign contractors proving goods and
service to the oil and gas sector, the VAT
deduction method will apply even if they bear
foreign contractor tax under the withholding
method. The impact is, if they still go with
withholding method, the output VAT is now
applied at the standard rate (instead of the
deemed rate) and no input VAT can be claimed.
For taxpayers that have both VATable and
non-VATable supplies, the input VAT on fixed
assets during an initial construction period is
temporarily creditable based on the forecast ratio
of (future) taxable revenue to total revenue.
New rules on claiming VAT refunds
A VAT refund can be claimed if a taxpayer has
accumulated input VAT credits for at least one
year. For new projects during construction period,
the threshold to claim a VAT refund is increased
from VND200 million to VND300 million.
For more information, please contact:
Richard J Irwin
(84) (8) 3 823 0796
[email protected]
Contacts
Australia
Peter Konidaris, Partner
Email: [email protected]
Tel: +61 3 8603 1168
Japan
Masanori Kato, Partner
Email: [email protected]
Tel: +81 3 5251 2536
Philippines
Malou P. Lim, Partner
Email: [email protected]
Tel: +63 2 459 2016
Thailand
Somboon Weerawutiwong, Partner
Email: [email protected]
Tel : +662 344 1000 Ext. 1247
Cambodia
Heng Thy, Partner
Email: [email protected]
Tel: +855 23 218 086
Kotaku Kimu, Director
Email: [email protected]
Tel: +81 3 5251 2713
Singapore
Koh Soo How, Partner
Email: [email protected]
Tel: +65 6236 3600
Vietnam
Richard J. Irwin, Partner
Email: [email protected]
Tel: +84 8 3823 0796
Laos
Thavorn Rujivanarom, Partner
Email: [email protected]
Tel: +662 344 1444
Lin Weijie, Manager
Email: [email protected]
Tel: +65 6236 7481
David Fitzgerald, Partner
Email: [email protected]
Tel: +84 8 3824 0116
Malaysia
Wan Heng Choon, Senior Executive Director
Email: [email protected]
Tel: +60 3 2173 1488
South Korea
Dong-Keon (D.K.) Lee, Partner
Email:[email protected]
Tel: +82 2 709 0561
New Zealand
Eugen Trombitas, Partner
Email: [email protected]
Tel: +64 9 355 8686
Sri Lanka
Hiranthi Ratnayake, Director
Email: [email protected]
Tel: +94 11 4719838
Gary O’Neill, Director
Email: [email protected]
Tel: +64 9 355 8432
Taiwan
Lily Hsu, Partner
Email: [email protected]
Tel: +886 2 2729 6666 Ext. 26207
Ian Rowe, Director
Email: [email protected]
Tel: +64 4 462 7274
China
Alan Wu, Partner
Email: [email protected]
Tel: +86 10 6533 2889
India
Vivek Mishra, Executive Director
Email: [email protected]
Tel: +91 124 330 6518
Anita Rastogi, Associate Director
Email: [email protected]
Tel: +91 124 330 6531
Indonesia
Ali Widodo, Partner
Email: [email protected]
Tel: +62 21 52890623
Abdullah Azis, Associate Director
Email: [email protected]
Tel: +62 21 5289 0601
For a comprehensive guide to global
VAT/GST information from over
70 countries worldwide, please
visit GlobalVATOnline at www.
globalvatonline.com. GlobalVATOnline
can keep you up to date on all VAT
issues and developments as they unfold.
Disclaimer. Clients receiving this Alert should take no action without first contacting their usual PwC Indirect Tax Advisor.
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