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VIETNAMESE TAX SYSTEM

Prepared: Le Phuong Thao, MBA

Objective
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Understand overall structure of Vietnamese tax system Understand functions of General Tax Department Understand functions of Tax Departments Review different types of Taxes

Vietnamese Tax System

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Tax laws and policies

Tax administration system

Tax Laws and Tax Policies

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The National Assembly issues the Laws on different kind of tax

No. 04-2007-QH12 Law on personal income tax

The Government issues Decrees detailing the implementation of the Laws

No. 100-2008-ND-CP Degree on personal income tax

The competent Ministries issues Decisions, Circulars guiding the implementation of the Decrees

No. 84/2008/TT-BTC Circular

Ministry of Finance, General Department of Taxation, Departments of Taxation issue Official Letters providing detail implementation for particular case

Official Letter No. 5145/TCT-TNCN dated 16 December 2010 of the General Department of Taxation in response to PricewaterhouseCoopers Vietnam concerning personal income tax for Vietnamese staff working in foreign countries.

Tax Administration System

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General Department of Taxation

Local Tax Departments
Tax

Departments of provinces and centrally run cities

Tax Departments

District-level

Tax Administration System

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Under Decision No. 115/2009/QD-TTG

General Department of Taxation

an

agency under the Ministry of Finance

advise
has

and assist the Minister of Finance

the legal entity status, a seal bearing the national

emblem, State Treasury accounts and headquarters in Hanoi city.

Tax Administration System

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The General Department of Taxation is organized into a hierarchical system The Policy Department; The Department of Legal Affairs; The Department for Tax Revenue Estimation; The Tax Declaration and Accounting Department; The Department for Management of Debts and Collection of Tax; The Department for Personal Income Tax Administration; The Department for Tax Administration at Large Enterprises;

8.

9.

1. 2. 3.

10.

11.

4.

12.

5.

13.

14. 15.

6.

7.

16. 17.

The Department for Propagation and Taxpayer Assistance; The International Cooperation Department; The Internal Examination Department; The Organization and Personnel Department; The Finance-Administration Department; The Office (with its representative office in Ho Chi Minh City); The Inspectorate; The Information Technology Department; The Tax School; The Taxation Magazine.

Tax Administration System

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Under Decision No. 108/QD-BTC

Tax Departments
organizations

under the General Department of

Taxation
perform

the administration of taxes within the tasks of

the tax sector in the locality under law

have

the legal entity status and its own seal and may

open accounts at the State Treasury under law.

Tax Administration System

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For the Hanoi Tax Department and Ho Chi Minh City Tax Department

8.

The Division of Legal Affairs;

9.
10. 1.

The Internal Inspection Division;

The Division of Organization and Personnel; The Division of Administrative Affairs - Archives; The Division of Logistics and Finance; The Division of Tax Prints Management;

The Division of Taxpayer Services and Propaganda;

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2.

The Division of Tax Declaration and Accounting;

12.

3.

The Division of Debt Collection and Enforcement;

13.

4. 5. 6.

Some Tax Examination Divisions;

Some Tax Audit Divisions;

The Division of Personal Income Tax; The Division of General Affairs Professional Operations Forecasting;

14.

The Informatics Division.

7.

Tax Department
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For Tax Departments of other provinces and cities

1. 2. 3. 4.

The Division of Taxpayer Services and Propaganda;

The Division of Tax Declaration and Accounting; The Division of Debt Collection and Enforcement; Some Tax Examination Divisions;

5.
6. 7. 8. 9. 10. 11.

Some Tax Audit Divisions;

The Division of Personal Income Tax; The Division of General Affairs - Professional Operations - Forecasting; The Internal Inspection Division; The Division of Organization and Personnel; The Division of Administration, Logistics and Finance, and Tax Prints The Informatics Division.

Tax Administration System

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Under Decision No. 503/QD-TCT

District-level Tax Departments

organizations under the Tax Departments are uniformly organized according to district-level administrative units. perform the administration of taxes within the tasks of the tax sector in the locality under law

have the legal entity status and its own seal and may open
accounts at the State Treasury under law.

Tax Administration System

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Functions of District-level Tax Departments

1. 2. 3. 4. 5.

Taxpayer Services and Propaganda Team Tax Declaration and Accounting Team Tax Examination Teams Internal Audit Team Debt Collection and Enforcement Team General Affairs - Professional Operations Forecasting Team

6. 7. 8.

Administration, Logistics and Finance, and Tax Prints Team Registration fee - other income - personal income tax Team Some the associated communes Tax Team

Tax Administration System

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Different Types of Taxes

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PIT CIT VAT Foreign Contractor Tax Special Sales Tax Business License Tax Export-import Tax Natural resources Tax Environmental Tax ..

Vietnam Tax Reform

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Vietnam successfully completed 3 main tax reform phases:

1990-1995 1995-2005 2005-2010

The current tax reform strategy for the period 20112020 has achieved some first succeed Tax reform contributed significantly to socio-economic development The main objectives of reforms depended on economic circumstances of each period, but in general:

To create a fair, efficient, effective, convenient, transparent tax system as a states important tool in macroeconomic adjustment To promote competitiveness, production, export, and

First phase of tax reform (19901995)

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Unified tax system, including 9 important taxes to replace the different types of taxes applied for state-owned sector, private-owned industry and trade sector and the agriculture sector

Turnover tax, profit tax and export-import tax were critical taxes in this period

Second phase of tax reform (19972005)

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Introduced value-added tax and enterprise income tax and amended the regulations on import and export duties and on special consumption tax The uniformed tax system played an important role in the first stage of Vietnam in a market-oriented economy The tax system became more complicated but not comprehensive, considered unequal, not transparent, could not meet the requirement of international

common practice

Third phase of tax reform (2006-2010)

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Introduced many new tax laws including Law on non-agricultural land use tax, Law on natural resource tax, environment protection tax Amended VAT, special consumption tax Reformed personal income tax, corporate income tax Reformed tax administration Implemented self-assessment mechanism

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Tax Reform Strategy in 20112020

The comprehensive strategy encompass reforms to the value-added tax (VAT), personal and corporate income taxes, special consumption taxes, import-export taxes, environmental taxes, and fees and duties on mineral and land use rights and agricultural lands To meet the needs of the market economy, increase revenues sources, production capacity, and the competitiveness of domestic enterprises The tax reform is a vital part in the marketoriented economy reform, to ensure the succeed of the strategy, the tax reform should be conducted together with the reform in other fields