1. Depreciation of fixed assets which have not completed the procedures for changing ownership is not allowed
Ho Chi Minh City Tax Department has provided guidance for the case where an enterprise which has purchased a functioning office from transferor third party and has made full payment to the transferor, however they are not allowed to recognise such office as a fixed asset and make depreciation as the transferor does not have sufficient documents to prove its ownership of such office and has not completed the ownership-transfer procedures.
2. Whether expenses for obtaining a temporary residence card and visa paid for by the Company on behalf of foreign employees are subject to PIT
The General Department of Taxation provided detailed guidance as follows:
- In cases where the expenses for obtaining a temporary residence card and visa for a foreign employee is paid for by the Company on their behalf should be recorded as taxable income in form of salaries, wages and should be declared for PIT in line with relevant regulations.
- If the Company employs an expatriate, the Company is responsible for requesting the issuance of a work permit for such expatriate, so such expenses paid by the Company are not included in the taxable income of the employee.
3. Granting the Work Permit for an expatriate working in Vietnam online system
The Minister of Ministry of Labor – Invalids and Social affairs has issued the Circular which takes effect from 2 October 2017 to provide guidance in granting work permits for foreign employees working in Vietnam online.
Accordingly, from the effective date of such Circular, the employer can chose one of the two options below to submit a report and explanation for requiring foreign employees; Application dossier for obtaining, or re-obtaining work permits; or Application dossier for certification of exemption from work permit:
a) Submit directly or via post to the relevant authority and the work permit-granting authority; or
b) Submit via electronic information portal.
Grant Thornton Vietnam would like to provide some important notes as follows:
Approval for requesting approval for the hire of foreign employees:
At least 20 days before the proposed date of hiring a foreign employee, the employer (except for contractors) has to declare information and submit a report with an explanation of the need for recruiting a foreign employee in accordance with Article 4, Decree No. 11/2016/ND-CP to the relevant authority via the electronic information portal, except for some cases mentioned in Clause 4, 5 and 8, Article 172 of Labor Code and Point e and h, Clause 2, Article 7 of Decree No. 11/2016/ND-CP.
In case of a change in the need for using a foreign employee, the employer should send a report explaining the changes at least 10 days before the proposed date of hiring the foreign employee via the electronic information portal
Granting Work permit:
At least 7 working days before the date on which the foreign employee proposes to start working, the employer has to declare information and submit an application dossier for obtaining Work a permit according to Article 10 of Decree No. 11/2016/ND-CP to the work permit-granting authority via electronic information portal.
After receiving the result of application dossier for granting a work permit, which is consistent with regulations, the employer needs to submit the original dossier directly or by post to the work permit-granting authority to check, reconcile and file as stipulated
Certification of foreign workers eligible for exemption from work permits
At least 05 working dates before the date on which the foreign employee starts working, the employer has to declare information and submit an application for certification of exemption from work permit according to Clause 3, Article 8 of Decree No. 11/2016/ND-CP to the work permit-granting authority via the electronic information portal, except for cases in Clause 4 and 5, Article 172 of Labor Code and Point e, Clause 2, Article 7, Decree No. 11/2016/ND-CP.
Please kindly contact with consultants of Grant Thornton for further advice regarding taxation, work permit for foreign employees or legal matters during business operation.