Section A

Q1

Mark
B - The normal rental should be recorded as revenue since it like the Company
provides housing allowance to its employees. No adjustment is required for
depreciation of the villa since these were included in costs of sales.

Q2

C - 2 is not correct because the penalty rate of 007% per day is only applicable to
late payment in excess of 90 days for certain cases.

Q3
Q4

D - Per diem is no longer subject to a cap

B
Period in Vietnam
Days
1 Jan to 31 Jan
30
16 May to 31 May
15
Days in Vietnam
45

2
2

Q5
Q6
Q7
Q8
Q9
Q10
Q11
Q12
Q13
Q14
Q15

B - 3,000,000*5%*10%/(1-10%)
A - goods are delivered at the border gate
C
C - 10,000*12 - 5,000 +2,000
A
B - 12 months * 1m/month/person *5 people
C
B - VND450 million VND500 * 60% VND10 million = VND140 million.
A
C - the price of land is deducted from taxable price
B - =0.05%*500*3,000

2
2
2
2
2
2
2
2
2
2
2

Section B
Question 1 - Mr. Nam Nguyen
(a)
1/1/2015: receiving 200,000 shares as scrip dividend - No PIT implication
1/7/2015: sold 50,000 shares
PIT on dividend:
= 50,000 x 10,000 x 5% =
PIT on share sales
= 50,000 x 18,000 x 0.1% =
20/12/2015: sold 400,000 shares
PIT on dividend:
= 150,000 x 10,000 x 5% =
PIT on share sales
= 400,000 x 20,000 x 0.1% =

25 million

0.9 million

75 million

8 million

(b)
When inheriting an apartment from his mother, Mr. Nam Nguyen is exempted from PIT.
2
When selling the apartment in December 2015, he will be subject to PIT at 2% on the proceed.
2
The cost of apartment is not deductible from taxable income.
4,000x2% =
80 million
PIT =
1
Note: Candidate can make assumption that he has no other real estate and keep more than 183 days ==> exempted

Question 2 - JBB
Point 1
JBB has income from its construction contract with Najan which is a Vietnam
company. JBB therefore is a foreign contractor in Vietnam. It will be taxed under the
foreign contractor tax ("FCT") regime.

Point 2
Option 1

JBB does not maintain any accounting book in Vietnam. Therefore, JBB does not
meet conditions to declare FCT under the hybrid or deduction method. It will
declare FCT under direct method which FCT will be calculated by apply a deemed
CIT and VAT rate on the JBB's gross income).

Under direct method, the Vietnamese party, i.e. Najan, will be responsible for tax
registration, declaration on behalf of JBB. Najan will withhold FCT from the payment
to JBB and pay to the Vietnam State Budget.

The FCT has to be declared and paid within 10 days from the date of payment made
by Najan to JBB.

0.5

If Najan chooses to declare FCT monthly basis, the deadline is the 20th day of the
following month.

0.5

Contract is a lumpsum contract

The whole contract will be taxed at FCT rate of VAT of 3% and USD in thousand
CIT of 2%
VAT taxable revenue
VAT @ 3%
CIT taxable revenue
CIT @ 2%
Total FCT

Note

27,000.00
810.00
26,190.00
523.80
1,333.80

The contract is gross of tax since "JBB will bear all of the withholding tax in Vietnam in
respect of its activities in Vietnam"

0.5
0.5

Option 2

Value of each activity

is separated

Supply

VAT taxable revenue

VAT exempted (provided the import VAT is paid)
CIT taxable revenue
CIT @ 1%
Total FCT for supply of M&E

Services

USD in thousand
10,000.00
10,000.00
100.00
100.00

0.5
0.5

(Design, Commissioning, Training (on-site in Vietnam))

VAT taxable revenue
(1,000+500+500)
VAT @ 5%
CIT taxable revenue
CIT @ 5%
Total FCT for services

Construction
VAT taxable revenue
VAT @ 3%
CIT taxable revenue
CIT @ 2%
Total FCT for
construction
Total FCT for Option 2

2,000.00
100.00
1,900.00
95.00
195.00

0.5
0.5

15,000.00
450.00
14,550.00
291.00
741.00

0.5

1,036.00

0.5

Option 1 the FCT is higher than Option 2. Therefore, JBB should separate the value of each
activity in the contract with Najan

0.5

0.5

Question 3 - Ganna
(a)
Unit: VND million

Input VAT
creditable

Output VAT

Transaction (1): Ganna recently finished the construction of a canteen in

its site. The input VAT incurred was VND180 million for dormitory.

The input VAT for construction of a canteen for employees in the

Company's site is fully creditable

18

Transaction (2): Ganna purchase a 4-seater car of VND2,500 million to

grant for GD' transportation from home to office
The input VAT of car is creditable but subject to a cap (the purchase price
is capped at VND1,600 million).

160

Transaction (3): Repairing service invoice of VND600 million which the

insurance company agreed to compensate later.
The input VAT is not creditable since it is in nature of payment on behalf.

Transaction (4): Ganna signed a contract to provide site survey services for
a Vietnamese company for a project in Cambodia. 50% of value was paid.
The transaction is not subject to declare output VAT. Therefore, 50%
advance received is not declared output VAT.
Transaction (5): Ganna received a subsidy from its parent company
Since there is no service Ganna provided to parent company to receive the
subsidy, the subsidy is not subject to declare output VAT.

1.5

1.5

50

Transaction (6): Ganna sent an advice to a Vietnamese manufacutring

company but has not issued invoice since the buyer agreed to pay in
January 2016
According to the VAT regulations, the time for VAT declaration is when the
services are completed or the invoice is issued which is earlier. Since
advice was sent in December 2015, the service would be completed in
December 2015, regardless whether the money is collected or not

(b)
According to the invoicing regulations, for services, the date of invoice issuing is the date when
the service is completed, regardless whether the money is received or not. In case the money is
received in advance, the date of invoice issuing is the date receiving money.
Therefore, in Ganna's case, since the service is completed in December 2015, the invoice is
required to be issued in December 2015. Ganna did not issue invoice. Ganna does not comply
with invoicing regulations.

Question 4
(a) Hoang Gia
Assume profit of USD25,000 is profit before tax
Tax rate before the reduction is 20%
=> CIT in overseas (before reduction) is =25,000*20%
5,000.00
CIT in Vietnam in accordance with Vietnam regulations = 25,000*22%
5,500.00
The tax credit permitted in Vietnam is:
5,000.00
Note: the candidate can make assumption the profit is after tax and calculate. The same marks will be given.
Assume profit of USD25,000 is profit after tax
Profit before tax in Singapore = 25,000/(1-20%*50%)
27777.78
1
CIT paid in Singapore if there is no reduction
5,555.56
1
CIT in Vietnam in accordance with Vietnam regulations = 25,000*22%
5,500.00
2
The tax credit permitted in Vietnam is:
5,500.00
3
(b)
The regulatory deadline for submitting the
following tax declarations:

2
2
3

Deadline

(i) The monthly value added tax (VAT) declaration the 20th day of the following month

0.5

(ii) The quarterly corporate income tax (CIT)

declaration

the 30th day of the following quarter. From

Quarter 4/2014, no quarterly CIT declaration
is required

0.5

(iii) The foreign contractor withholding tax (FCT)

finalisation when a contract is completed

the 45th day from the date when the

contract is completed

(iv) The annual CIT finalisation; and

the 90th day of the following year

0.5

(v) The CIT finalization when a company is

liquidated.

the 45th day from the date when the

company is liquidated

0.5

Question 5
Minh Tam JSC
Profit before tax

Unit: VND in million

55,000

Adjustments
Note 1
Recording additional revenue of leasing: = 1,500*(100%-20%)*17 months

1.5
20,400

Adjustment on additional COS = 300* 17 months

Note 2
Sale reduction without supporting documents
Note 3
Accrued bonus without supporting documents
Repair expenses paid via bank and remaining is not due ==> no adjustment
Note 4
Per diem (no longer subject to cap)
Note 5
Dividend from Vietanmese subsidiary (paid tax already)
Note 6
Realised foreign exchange losses
Unrealised foreign exchange losses on account payable
Unrealised foreign exchange losses on non account payable
Additional CIT
Penalty on violation of economic
Taxable profit
CIT at 22%

(5,100)

1.5

1,000

5,500
-

1
1

(2,000)

100
2,000
76,900
16,918

1
1
1
1
1
1

Question 6 - David Ford

VND in million
Salary = (10,000+ 5,000)*12 months*22,000

Taxable income for year

3,960

Voluntary pension fund contribution from Penaco

= 5,000*12 months*22,000

1,320

School fees

Airfare for travel to Singapore = 5,000*22,000

110

Car rental for personal use (30*12months)

360

Incentives in form of shares that have not been sold

Note: Home leave is different with travel purpose.

His home country is Australia.

Total net income (excluding housing allowance)

5,750

Monthly net income (excluding housing

allowance)

479.17

Since there is no sufficient information on incomes for each month, we divide the annual income
to 12 months, rather than gross-up for each month's taxable income.
Less: Personal deduction
9
Less: Dependents deduction = 2 dependants: his son and daughter
7.2
Converted income
463
Monthly grossed taxable income (before add
697
deductions)

0.5

0.5

Add: Deductions (as above)

Monthly grossed taxable income

16
713

Net taxable housing allowance

107

15% of monthly grossed taxable income

Actual monthly rental
Total monthly net income including housing
allowance
Less: Deductions (as above)
Converted income
Monthly grossed taxable income including housing
allowance
Monthly PIT
PIT for year

106.98
120
586
16
570
862

292
3,502.20

1
1

Other assumptions which are reasonable and tax calculations based on these assumptions are granted full mark.
100