Vietnamese exports now exempt from VAT
Friday January 29, 2010
Businesses in Vietnam can now benefit from VAT exemption on goods exported to foreign markets under new regulations.
The country’s finance ministry announced that domestic enterprises are no longer required to pay VAT on exports but will still be subject to import and export tariffs and corporate income taxes, reports VietNamNet Bridge.
Businesses will also be required to pay duties on equipment and materials exported as assets for overseas projects and comply with the double taxation avoidance agreements in countries which have signed accords with Vietnam.
Under the new VAT rules, if companies incur losses or if their profits abroad do not reach a taxable threshold, they will have to submit financial reports to relevant departments to calculate corporate income tax.
Recent figures have shown that Vietnam’s higher VAT rate, which increased from five per cent to ten per cent, have driven up prices in the country’s retail sector. Retail prices in the car industry alone have risen by between ten and 15 per cent.