Ex1:

CPTC JSC is a Vietnamese joint stock company operating in diversified industries. The
company also invests in various projects and companies in Vietnam.
 
In the year 2021, CPTC JSC had an operating tax loss of VND15,000 million before the
following income from investment activities:
 
Amount (VND million) From Information
20,000 TL Dividends received from investment in shares of
JSC TL JSC, a joint stock company.
 
15,000 in cash KTM Dividends received from investment in shares of
(Plus 1 million shares as JSC KTM JSC, a company listed on the Vietnam Stock
script dividends, with a Exchange. In the year 2021, KTM JSC distributed
market value of VND22,000 dividends in cash and in shares.
per share at distribution)  
5,000 NKT Distribution of profits after tax from NKT Co.
Co CPTC JSC owns 100% capital of NKT Co. NKT Co
is entitled to a tax exemption in the year 2021.
 
16,000 HEX Distribution of profits after tax from HEX Co.
Co CPTC JSC owns 100% capital of HEX Co. HEX Co’s
profits were subject to the 10% corporate
income tax (CIT) rate in the year 2021 as it was
entitled to a 50% tax reduction.
 
 
In addition, CPTC JSC also received VND50,000 million for its share of profits before
tax from a Business Co-operation Contract (BCC) to operate a project with SCT Co, a
Vietnamese company. The two parties agree to share profits after deducting
common project expenses. Each party then bears its own expenses and pays its own
CIT. CPTC JSC’s own expenses for the project in the year 2021 totalled VND10,000
million. The project is not entitled to any tax incentives.
(a) Explain the corporate income tax (CIT) treatment of ALL distributions of profits
received AFTER tax by CPTC JSC, including the case where the investees are entitled
to CIT incentives.

(b) Calculate the amount of corporate income tax (CIT) liability for CPTC JSC in the
fiscal year ended 31 December 2021.
 
Note: You are required to list all the income items in the question and categorise
each of them appropriately into taxable and exempt items, or briefly explain the
treatment of each item of income in your calculation/workings.

Ex2:
Ms Huong is 29 years old and is a citizen of Singapore with no dependants. She works
for TX Co, a company headquartered in Singapore that has a representative office in
Vietnam. In the year 2020, Ms Huong occasionally visited Vietnam (her first visit was
from 1 July 2020). She was officially assigned to work in Vietnam from 1 January 2021
to 31 December 2021 to support the representative office to establish a new
company in Vietnam.
 
Her presence in Vietnam from 1 July 2020 onwards was as follows:
 
- From 1 July 2020 to 31 December 2020: 50 days
- From 1 January 2021 to 30 June 2021: 130 days
- From 1 July 2021 to 31 December 2021: 135
days
 
In the year 2020, her annual gross total employment income was USD150,000. In
addition, she received a cash allowance of USD300 per day for each day she stayed in
Vietnam to cover her accommodation and meal costs.
 
In the year 2021, she received a gross monthly salary of USD18,000. TX Co also
rented her an apartment at a cost of USD3,000 per month. She is not subject to
social and health insurance in Vietnam.
 
Ms Huong also invests in various companies in Vietnam and owns 5% of the shares of
TKV Co, a limited liability company in Vietnam, which she originally purchased for
VND1,500 million. In November 2020, she sold half of her shareholding of TKV Co for
VND1,000 million, and in August 2021, she sold the remaining shares for VND3,000
million.

(a) Determine Ms Huong’s residency status in Vietnam for the years 2020 and 2021.

(b) Calculate the personal income tax liability (in VND million, rounded to 2
decimals) of Ms Huong from her employment and investment income in the years
2020 and 2021.

Ex3:
NTF Co is a company established in Vietnam providing solutions to facilitate the eKYC
(electronic Know-Your-Clients) procedures for finance companies in Vietnam.
 
In the year 2021, NTF Co entered a contract with TMC Co, a company based in India,
whereby TMC Co provides special software algorithms, databases, knowhow and
technical services to enable NTF Co’s eKYC to operate. NTF Co pays TMC Co 8% of the
net service revenue made from eKYC as a license fee, as well as an annual fixed fee of
USD240,000 for technical support services.
 
TMC Co also provides online initial training for NTF Co’s staff to deploy and customize
the algorithm for a fee of USD50,000 in the year 2021.
 
In the year 2021, NTF Co earned revenue of VND70,000 million from eKYC services to
customers in Vietnam. NTF Co therefore settled the corresponding license fee to
TMC Co within the calendar year of 2021.
 
NTF Co is also considering selling similar eKYC packages to finance companies in
other countries in Asia.
 
All payments are net of foreign contractor tax in Vietnam, where relevant. In a recent
ruling, tax authorities confirmed that online training similar to NTF Co’s case would
be treated as an attached service.

(a) Briefly explain and recommend solutions (where appropriate), as to whether or

not the license fee and technical services paid by NTF Co to TMC Co would be
subject to foreign contractor tax in Vietnam, where NTF Co provides eKYC packages
to:
 
- Vietnamese finance companies; and
- foreign finance companies

(b) Calculate the amount of foreign contractor tax (to the nearest USD) which NTF
Co is required to declare and pay in relation to ALL of its payments to TMC Co in the
year 2021.

Ex4:
VGF Co operates a golf course in Dong Nai province. VGF Co recorded a total of
VND44,000 million in membership fees for the year ended 30 September 2021. The
revenue is inclusive of special sales tax (SST) at 20% and value added tax (VAT) at
10%.
 
On 1 November 2021, VGF Co purchased a four-seater car with a quoted price of
VND1,980 million (inclusive of VAT at 10%). The seller granted VGF Co a discount of
5% off the quoted price. They also provide a coupon for a price reduction of VND200
million available on future purchases with them by VGF Co.
 
The following scenario relates to requirement (b) only.
 
CST Co is a Vietnamese company providing consulting services for Vietnamese
investors looking for opportunities to invest overseas. In March 2021, CST Co entered
into a service contract with VGF Co to provide a feasibility study and research for a
potential investment project by VGF Co in Indonesia.
 
The contract value is VND6,000 million, inclusive of value added tax (VAT). There is
no specific allocation in the contract for the apportionment of revenue relating to
services performed in Indonesia and Vietnam. However, CST Co does have
documents to prove that the costs relating to services performed in Indonesia and
Vietnam were VND3,000 million and VND2,000 million, respectively.

(a)(i) Calculate the amounts of taxable revenue for value added tax (VAT) purposes,
the output VAT and special sales tax (SST) payable, and net revenue (exclusive of
SST and VAT) which VGF Co should declare and recognise for the year ended 30
September 2021 in respect of the membership fee income.
 
(ii) Calculate the amount of creditable input value added tax (VAT) which VGF Co
can claim from the purchase of the car.

(b) Calculate the amounts of taxable revenue for value added tax (VAT) purposes
and output VAT arising on CST Co from the above contract.

Ex5:
KVL JSC is a Vietnamese joint stock company operating in the field of manufacturing
home devices. KVL JSC has a subsidiary in Singapore acting as a trading hub of the
company’s products in Asia.
 
KVL JSC’s audited financial statements for the year ended 31 December 2021 show a
loss of VND18,000 million. Whilst estimating its corporate income tax liability for the
year, KVL JSC noted the below issues:
 
(1 In the year 2020, KVL JSC obtained a loan from a commercial bank in Vietnam to
) finance a new investment involving the set-up of a new company in Indonesia. In
  the year 2021, the interest incurred on this loan amounted to VND2,800 million.
 
(2 In the year 2021, KVL JSC received an amount of USD5.5 million, being the share
) of profit after tax from the subsidiary in Singapore. The profits have been subject
  to a Singapore income tax rate of 17%. The net amount received by KVL JSC has
  been included as investment income in the accounting loss mentioned above.
 
(3 On 1 April 2021, KVL JSC rented out one of its idle premises in Da Nang City for a
) period of three years. KVL JSC received the full rental payment for the whole
  three-year period of VND16,500 million (inclusive of 10% value added tax (VAT))
  on the signing of the rental agreement on 1 April 2021. For accounting purposes,
  KVL JSC recognises the rental income over the three years of the rental period
  (and reflected this in the audited financial statements), but for tax purposes it
  elected to treat the whole amount as taxable in the fiscal year 2021.
(4 On 1 May 2021, KVL JSC paid an amount of VND3,960 million (inclusive of 10%
) VAT) to an investment bank in Vietnam for the issuing costs of a four-year bond.
  For accounting purposes, KVL JSC amortised the issuing costs of the bond over
  four years (the amortisation cost for the fiscal year 2021 was included in the
  accounting loss mentioned above).
 
KVL JSC has a number of idle real estate premises in key cities in Vietnam, and it is
considering selling some of its real estate to generate funds for investment to expand
its overseas operations.
 
Note:
All the amounts are exclusive of VAT unless stated otherwise.

(a) Calculate the corporate income tax liability in (VND millions) and loss carry
forward to be declared by KVL JSC for the year ended 30 December 2021.
 
Note: Your computation should start with the accounting loss figure of VND18,000
million, and should list all items referred to in the question, showing their correct
treatment and indicating by the use of zero (0) any item which does not require
adjustment.  

(b) Briefly explain the treatment required under corporate income tax (CIT)
regulations with regard to:
 
- the sale of real estate, including the ability to offset gains/losses from real estate
sales against other activities; and
- income from overseas investment projects, including the case where the
  Vietnamese company investing abroad repatriates the profits into Vietnam
without reporting this on its CIT declaration.

Ex6:

You should assume that today’s date is 31 December 2021.

 
Mr Giang, a 35-year-old Vietnamese citizen, is one of the co-founders of GMOL, a
company that develops virtual reality applications. Mr Giang holds 70% of the capital
contribution of GMOL, amounting to VND7,000 million. He is the chief executive
officer (CEO) of GMOL and actively participates in its day-to-day management
activities. He is also a freelance consultant and provides support for the development
of cybersecurity solutions for various companies in Vietnam.
                                                               
Mr Giang registered four qualified dependants in 2021: his 65-year-old mother, and
three children all aged below 17. In the year 2021, he has the following sources of
income:
 
(1 Salary (as CEO of GMOL): VND250 million per month.
)
(2 Bonus: VND500 million.
)
(3 In February 2021, with his significant efforts to develop GMOL’s online
) community, GMOL decided to award Mr Giang with an ownership certificate to a
  piece of “virtual” land in a well-known application developed by GMOL. At the
  time of the award, the land had no value as there was no “market” and no offer
  for the land. Following the award, the application became more popular, and
  subsequently a market was created for the “virtual” land meaning its market
  value grew quickly. On 31 December 2021 there were various offers for the
  “land” from buyers who are users of the GMOL application, and it can be easily
  monetized/sold at the value of VND300 million. Mr Giang is undecided whether
to sell the land.
(4 Freelance consultant income for cybersecurity solutions: VND1,800 million for
) the year.
(5 Award from the Ministry of Information and Telecommunication for the
) Innovative Digital Transformation solution: VND15 million.
 
 
All income from GMOL is gross of personal income tax (PIT). His freelance income is
net of 10% PIT withheld at source by customers.
 
On 15 December 2021, Mr Giang and his co-founder decided to sell 20% of the
capital contribution of GMOL for VND70,500 million to NVOX Co, a Vietnamese
company specializing in marketing digital products. Each co-founder sold 10% of their
shares.
(a) Calculate (to the nearest VND million rounded to 1 decimal) Mr Giang’s taxable
income and total annual personal income tax liability from:
 
- employment and freelance work; and
- sale of capital contribution
 
Note: You should list all potential income items referred to in the question, showing
their correct treatment and indicating by the use of zero (0) any item which does not
impact the calculation.  

(b) Briefly describe the potential personal income tax implications for Mr Giang
should he decide to sell the virtual land, and how the income would be treated at
the time of award and at the year-end of 31 December 2021, taking into account
the significant increase in market value.