Vietnam VAT changes

A number of changes to the Vietnamese VAT compliance regime have been introduced from the start of 2014. The principle changes are included below:

• Input VAT on imports into Vietnam for the purposes of seeking a deduction will now include VAT paid on importation.
• Evidence for the deductions of input which is based on transfers between bank accounts are only valid when both bank accounts are fully registered with tax office
• Sales to local customers of goods which are exported are now VAT exempt
• The following taxable supplies are now exempt from VAT: the disposal of loan collateral on defaults; and imports of goods for the use in medical goods manufacturing.
• Vietnamese branches of companies which are set-up export processing may now be treated as VAT registered
• Promotional or complimentary supplies of goods are zero rated for VAT.