Lower Withholding Rate on Nonresident Investors’ Interest Income
Dividend Received Deduction
Proposed Tax Incentives
Extension of Existing Tax Incentives
Termination of Tax Incentives
Documentation Requirements
Introduction of Self-Billing
A Single Business Registration Number for Head Office and Branch
Penalty Tax under VAT
Uniform Penalty Tax Rate on Non-Filing or Under-filing
Proposed Changes to Tax Audit Procedures
On August 21st, the Ministry of Finance & Economy (“MOFE”) announced its tax reform proposals introducing an earning income tax credit for low-income working families. They also include new proposed incentives and extension of some existing incentives for additional years to facilitate the economic growth and job creation. Among the reforms, however, there are only a few changes that might affect foreign investors. In addition, no change is proposed to the existing tax exemptions or reductions for foreign direct investment in high technology industries or special investment zones.
MOFE expects to finalize its proposals through consultations with government ministries and submit them to the National Assembly in October for approval. If approved, most of the proposed changes are expected to become effective beginning in January 2007.
Provided below is a brief summary of MOFE’s tax reform proposals.
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