Ministry of Planning and Investment
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Amending regulations on VAT and CIT
Friday, 20/07/2018 11:13

VGP – The Government issued Decree 146/2017/ND-CP (Decree 146) amending and supplementing some regulations on value added tax (VAT) and corporate income tax (CIT) of Decree 100/2016/ND-CP (Decree 100) and Decree 12/2015/ND-CP (Decree 12).

Question: What are the amending regulations on VAT and CIT?

Answer: Decree 146 stipulates some new regulations on VAT and CIT on exemption of VAT in exporting natural resources and minerals and non-deductible expenses in determining CIT?

Exporting natural resources and minerals which are not subject to VAT

Pursuant to Decree 146, exports which are natural resources or minerals will not be subject to tax if they fall into one of the following cases:  

Exports which are raw natural resources or minerals and have not been processed into other products;

Exports which are goods processed directly and mainly from natural resources or minerals where the total value of natural resources or minerals plus energy costs make up at least 51% of the product production costs, excluding cases which are subject to 0% VAT as specified in article 12.2(c) of the Law on VAT.

Also prescribed by Decree 146, the value of processed natural resources or minerals is determined as follows:  

- For natural resources, minerals which are directly exploited: direct or indirect costs for exploitation, excluding transport costs from the exploiting site to the processing place;

- For natural resources, minerals which are purchased for processing: the actual purchasing price excluding transport costs from the supplier to the processing place.

Amending non-deductible expenses in determining CIT

Regarding the content of expenses, Decree 146 adds life insurance to non-deductible expenses in determining CIT in case the expenses exceed the norm.

Regarding the expenditure norm of the voluntary pension fund, purchase of voluntary pension fund insurance, and insurance for employees, Decree 146 raises this norm from 01 million dong to 03 million dong, and the expenses in excess of the norm shall not be deducted when determining CIT.

Decree 146 came into force from February 1, 2018./.

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