- Companies in Vietnam engage in lending and funding activities to enhance returns
- VAT treatment of interest income has been inconsistent in Vietnam
- Income from lending activities is exempt from VAT, while other financial income does not require VAT declaration
- Recent tax audits show differing approaches to VAT treatment for interest income from non-bank lending versus bank deposits
- Many enterprises are unaware of the need to issue VAT invoices for interest income from lending to non-bank borrowers
- Tax auditors have imposed significant penalties for noncompliance with invoicing requirements
- Companies should review their VAT treatments to ensure compliance and prevent unexpected financial burden during tax audits.
Source: alvarezandmarsal.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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