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26 March 2010

GT Client Alert
11 Areas for your consideration … in
the 11th hour
Dear Readers,

We trust you all now are reviewing your Corporate Income Tax (“CIT”) for 2009 as the 31st
March deadline for submission of the annual corporate tax return is fast approaching.

Since 2009 is the first year of implementation of the new law on CIT with many changes
relating to tax incentives, non-deductible expenses and tax administration, you will no doubt
be devoting significant time and attention to this year’s tax return. To assist you in this 11th
hour, Grant Thornton Vietnam has summarized some key areas that you may wish to
consider before finalising the return.

1. Other sources of income should not be given tax incentives.


2. Tax incentives for business expansion are no longer available.
3. Tax exemptions or reductions are limited by the new three year rule.
4. Tax reductions were available for small and medium enterprises (“SMEs”) for 2009.
5. For cars with 9 seats or less, depreciation deductions are limited.
6. Salary expenses which are not defined in labor contracts and school fee of employees’
children are generally non-deductible.
7. Provisions of contingency funds in excess of 17% of the salary fund are non-
deductible.
8. Generally, expenses of advertising, promotion (A&P) exceeding 10% of total
deductible expenses are non-deductible.
9. Losses from revaluation of payables in foreign currencies are now deductible if
conditions are met.
10. Provisional payments of CIT for branches are now required for all manufacturing
enterprises.

Grant Thornton Vietnam is a member firm within Grant Thornton International Ltd. ('Grant Thornton International'). Grant Thornton
International and the member firms are not a worldwide partnership. Services are delivered by the member firms independently.
11. Aside from these, it is worth noting that if you have any transactions with related
parties, you are also required to file the Transfer Pricing Declaration (Form GCN
01/TNDN) as required under Circular 117 (due date for this form is the same as the
CIT return).
Generally, the following information needs to be declared in the Form:
• Identification of related parties;
• Details of transactions with related parties; and
• Method used for pricing between related parties.

We hope that these brief checklist reminders have proved useful to you. Should you have
any questions please do not hesitate to contact our team.

Contact Details:
Kenneth Atkinson Ronald Parks
Managing Partner Partner, Tax Services
T: +84 8 3910 9100 T: +84 8 3910 9120
E: Ken.Atkinson@gt.com.vn E: Ronald.Parks@gt.com.vn

Grant Thornton (Vietnam) Ltd.


28th Floor, Saigon Trade Center
37 Ton Duc Thang Street
District 1, Ho Chi Minh City
Vietnam

Grant Thornton Vietnam is a member firm within Grant Thornton International Ltd. ('Grant Thornton International'). Grant Thornton
International and the member firms are not a worldwide partnership. Services are delivered by the member firms independently.