APAC Tax Matters: 12th edition


  • Share

At a glance

  • Treatment of foreign exchange differences
  • Preferential ex-import tariffs for 2013

New Circular on treatment of foreign exchange differences

The Ministry of Finance (MoF) released Circular 179/2012/TT-BTC ("Circular 179") dated 24 October 2012, replacing Circular 201/2009/TT-BTC.

Circular 179 provides guidance on the treatment of foreign exchange (forex) differences in business entities. Circular 179 came into effect from 10 December 2012 and apply from fiscal year 2012 to business entities established in Vietnam.  The Circular does not however apply to credit institutions established under the Law on Credit Institutions.

The main contents of Circular 179 include:

  • The accounting for forex differences on transactions such as the revaluation of non-VND balances at the end of an accounting period, the consolidation of financial statements, and the dissolution, liquidation of businesses, or transactions of monetary items denominated in foreign currency etc., should generally follow the prevailing regulations on accounting.
  • Income, deductible expenses in respect of forex differences in business entities is determined in accordance with the prevailing regulations on Corporate Income Tax. 
  • Where business entities revalue year-end payables in foreign currencies under Circular 201/2009/TT-BTC dated 15 October 2009 of the MoF and forex differences are not eventually allocated to expenses, the remaining balance shall be further allocated to financial expenses for remaining years calculated from the effective date of Circular 179.

Preferential ex-import tariffs for 2013

On 15 November 2012, MoF issued a new tariff applying in 2013. In particularly, there are some changes as follows:

  • The export rate of certain crude materials (i.e., aluminum, nickel, cobalt, tin precious metals etc.) is increased from 20% to 30%.
  • The import tax rate for beet sugar and cane sugar is increased from 15% to 25%; the import tax rate of white sugar and refined sugar is increased to 40%.

The new tariff issued together with Circular 193/2012/TT-BTC applies from 1 January 2013 and replaces Circular 157/2011/TT-BTC.