Foreign firms seek tax consistency in Vietnam

Participants at the conference, which was called to discuss updates on Vietnam’s tax policies, said there was a difference among localities in applying preferential treatment for investors despite being under the same legal system.

According to the Law on Investment, the agencies granting investment licences to FDI businesses have the right to decide preferential tax levels. However, after a few years of investment, provincial taxation departments believe that the preferential levels are too high.

The companies represented at the conference wondered whether they should follow the Law on Investment or the tax law.

Responding to this question, Pham Dinh Thi, director of the General Department of Taxation’s Tax Policies Office, said there was a difference between the two laws and the issue had been resolved as per the circumstances.

Huong Vu, deputy general director of tax and advisory services at Ernst & Yong Vietnam, said the conflict between the two laws would not only cause problems for businesses but also reduce the attractiveness of Vietnam’s investment environment.

"The Law on Investment highly appreciates the government’s commitments to investors. Investment protection has been the country’s trust issue towards investors," Vu said.

She said tax policies had been continuously and actively improved over the past two years, facilitating enterprises. However, the implementation has seen some shortcomings.

Several new regulations and instructions were promulgated this year, which affected the operations of businesses.

Vu said the reduction of administrative procedures would create favourable conditions for companies in implementing their tax duties, improving effectiveness of tax |self-declaration, and providing a better investment environment to investors.

In reality, several tax officers have not adapted to the changes of policies and were asking companies for procedures that had been abolished, she said.

Enterprises also said there was a differentiation between specialists and workers in tax deductions for leasing and building houses.

The conference was co-organised by the Vietnam Chamber of Commerce and Industry and EY Vietnam to update regulations and policies that would help businesses have an overall and more effective view on tax planning and risk management, so they could take advantage of the integration.

Tax specialists also shared their experiences in tax management, checks and complaints.

The event attracted the participation of more than 300 FDI firms.