Vietnam witnessed significant recent developments related to transfer pricing, e-commerce activities, and the application of e-invoices. Transfer Pricing Decree No. 20/2017/ND-CP guiding the implementation of transfer pricing (Decree 20) and guiding circular 41/2017/TT-BTC (Circular 41) entered into effect from 1 May 2017. In 2018 and 2019, various rulings guiding the implementation of Decree 20 and Circular 41 were issued. An amendment of Decree No. 20/2017 on transfer pricing is being finalised, which proposes, inter alia, easing up the cap ratio of interest expenses under Decree 20. There was also a draft Decree amending Decree 20 released for public consultation recently.
In addition, aiming to enhance the management and taxation of e-commerce transactions, the Ministry of Finance (MoF) has circulated a draft Decree, which includes in its scope organisations operating e-commerce platforms and websites, transporters of the goods, customs brokers, as well as the exporters and importers. An e-commerce activity management system will be developed by the General Department of Customs (GDC). Export and import declarations will be processed 24/7 via this system, and the system will inter-connect and exchange information with the National Single Window and other existing management systems of the GDC. The MoF has also included the guidance in a draft circular guiding Law on Tax Administration on tax registration, declaration, and payment for foreign contractors who operate in e-commerce or do business via digital platforms and other businesses without having a physical presence in Vietnam. This is expected to affect foreign companies conducting business with Vietnamese companies and individuals using an online platform.
Regarding e-invoices, following the release of Decree 119/2018/ND-CP (Decree 119) and Circular 68/2019/TT-BTC (Circular 68) guiding the implementation of e-invoices , a draft Decree on invoices and documents, which is intended to replace Decree 119 and Circular 68 effective from 1 July 2022 is being circulated for discussion.
The amended Tax Admin Law was approved in June 2019 and will take effect from 1 July 2020, except for provisions relating to e-invoices and electronic documents, which will be effective from 1 July 2022. Various guidance is being drafted and issued for public consultation.
The National Assembly ratified Law No. 45/2019/QH14 amending the Labour Code on 20 November 2019. The amended Code took effect from 1 January 2021.
In addition, the National Assembly has just ratified the amended Law on Enterprises and the amended Law on Investment in June 2020. The new laws will take effect on 1 January 2021 and replace the existing laws.