ITX InTouch

The latest in indirect tax news for the Asia Pacific region
Issue 3, 2022 – June 2022
Introduction
Welcome to the latest issue of InTouch which covers the key developments in
value added tax (VAT) and goods and services tax (GST) in the Asia Pacific
region during the period April to June 2022. As economies within our region
become increasingly impacted by Global events, the role indirect taxes play in
either supporting targeted stimulus measures or aiding revenue collections will
become more and more critical.

Please reach out to any of the PwC contacts listed in this issue if you have any
questions on the news items.

PwC | ITX InTouch 2

Table of contents
1. India .................................................................................................................................................................................. 4
2. Indonesia .......................................................................................................................................................................... 6
3. New Zealand .................................................................................................................................................................... 9
4. Malaysia ......................................................................................................................................................................... 11
5. China .............................................................................................................................................................................. 12
6. Australia.......................................................................................................................................................................... 14
7. Philippines ...................................................................................................................................................................... 16
8. Vietnam .......................................................................................................................................................................... 17
9. Cambodia ....................................................................................................................................................................... 20

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 India

Goods and Services Tax (GST) ST, has upheld the levy of service tax on employee secondment
arrangements between Indian and Foreign entities. The Apex
Notifications/Circulars for CGST Court emphasised that a host of factors need to be weighed
together to conclude employer-employee relationship and noted
Circular/Instruction
that solely ‘Direction and Control Test’ will not be determinative.
• Instruction No. 01/2022-23 [GST-Investigation] dated May 25, The Court analysed the agreements and facts of the case to
2022 regarding no coercive actions to be taken for deposit of money conclude that employer-employee relationships do not exist
during Search & Seizure. between Indian entities and seconded employees. Accordingly,
the Court held that secondment of employees by foreign entities
It is clarified that there may not be any circumstance necessitating qualifies as a ‘manpower supply service’ and thus is leviable to
'recovery' of tax due during the course of search or inspection or service tax under reverse charge arrangements in the hands of
investigation proceedings. However, there is also no bar on the Indian entities.
taxpayers for voluntarily making the payments on the basis of
ascertainment of their liability on non-payment/ short payment of • The Hon’ble Gauhati High Court in Century Plyboards (India)
taxes before or at any stage of such proceedings. The tax officer Ltd. & Anr. v. the Union of India & Ors. [WP(C) 3210 of 2022
should however, inform the taxpayers regarding the provisions of dated 18 May, 2022] held that the Managing Director (“MD”) of a
voluntary tax payments through DRC-03. company should not be directly summoned by authorities under
Section 108 of the Customs Act. It was further held that,
Case laws authorized representatives of a company are to be summoned
and MDs can only be summoned, if the former is not cooperating
• The Hon’ble Supreme Court in Union of India & Anr. v. M/s or if an investigation is to be completed expeditiously.
Mohit Minerals Pvt. Ltd. [Civil Appeal No. 1390 of 2022 dated
19 May, 2022] upheld the judgment given by the Hon’ble Gujarat • The Hon’ble Madras High Court in Aathi Hotel v. Assistant
High Court to hold that no IGST is payable on ocean freight under Commissioner (ST) (FAC) [W.P.No.3474 of 2021
RCM for Cost, insurance, and freight (“CIF”) imports as an Indian W.M.P.Nos.3980 & 3982 of 2021 dated 8 December, 2021] has
importer is liable to pay IGST on the ‘composite supply’, held that, the interest is to be attracted only where credit is not
comprising of supply of goods and supply of services of only availed but also utilised for discharging tax liabilities, and if
transportation, insurance, etc, in a CIF contract; a separate levy there is an attempt to wrongly avail the credit and utilise the
on the Indian importer for the ‘supply of services’ by the shipping same, then tax liability would arise. Further, Section 50(3) of the
line would be in violation of Section 8 of the CGST Act. CGST Act has been substituted retrospectively from 1 July, 2017,
see the Finance Act, 2022, so as to provide for the levy of interest
• The Hon’ble Supreme Court in the case of CC, CE&ST v. on ITCs wrongly availed and utilised against payment of output
Northern Operating Systems Private Limited, 2022-VIL-31-SC-

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 liabilities, which would come into force on the date as appointed
by way of a notification.
• The Hon’ble Kerala High Court in the case of M/s NIKUNJAM
CONSTRUCTIONS PVT LTD held that the issuance of SCN
without following the mandatory requirement of pre-show cause
consultation is arbitrary and against the circulars – SCN is set
aside.

• The AAR, Maharashtra in the matter of M/s. MEK Peripherals

India Pvt. Ltd., [Advance Ruling No. GST-ARA59/2020-21/B-56
dated 27 April, 2022] has held that incentives received by an
Indian reseller of the products for providing marketing services
within India for increasing the business of the foreign company
cannot be considered as trade discount, nor it is an export
service.

Pratik Jain
Partner, National Leader - Indirect Tax, PwC India
Phone: +91 98111 41868
Email: [email protected]

PwC | ITX InTouch 5

 Indonesia

E-commerce transactions • Fintech is an activity using technology in a financial system which

generate products, services, technology, and/or new business
• Sales of foreign intangible goods or services into Indonesia through model, that contributes to the monetary and financial system stability
e-commerce systems is subject to VAT and the VAT rate is 11% as well as efficiency, continuity, safety and reliability of payment
effective from 1 April 2022 (previously 10%). This includes supplies systems.
by foreign sellers, foreign service providers, or foreign e-commerce
organisers (collectively referred to as “foreign e-commerce players”) • The high-level categories of Fintech services that are subject to VAT
and domestic e-commerce organisers. are as follows:

• E-commerce organisers are defined as business players providing a. Payment;

electronic communication platforms to be used in e-commerce. b. Investment settlement;
Foreign sellers or service providers are individuals or companies
residing or domiciled outside of Indonesia which carry out c. Capital raising;
transactions with domestic parties in Indonesia through electronic d. P2P lending;
platforms.
e. Investment management;
• If a foreign supplier falls under this category, they are required to
f. Online insurance product;
collect VAT and return and report on these amounts to the
Indonesian tax authority at a rate of 11%. Foreign e-commerce g. Market support; and
players can appoint a representative in Indonesia to fulfil their VAT
h. Digital finance support and other financial services.
obligations. Should a foreign e-commerce supplier fail to meet its
Indonesian obligations it will be subject to: • Regular VAT rate is applicable on the VATable services provided
under each of these categories. This is a highly specialised area of
- Administrative penalties based on KUP Law; and
Indonesian VAT and specific advice should be taken.
- Access to Indonesian markets will be disconnected by
KOMINFO. Digital assets and cryptocurrency
Fintech activities • On 30 March 2022, the Minister of Finance (MoF) issued MoF
Regulation No.68/PMK.03/2022 (PMK-68) that outlines the Value-
• On 30 March 2022, the MoF also issued Regulation Added Tax (VAT) and Income Tax treatment of Crypto Asset trading
No.69/PMK.03/2022 (PMK-69) stipulating the Income Tax treatment transactions.
of interest income in peer-to-peer (P2P) lending, as well as the VAT
treatment of Financial Technology (“Fintech”) activities.

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• Crypto Asset (CA) is defined as an intangible commodity in the form • Any transaction value carried out using fiat money in non-Rupiah
of digital asset, using cryptography, peer-to-peer network, and currency must be converted using the Ministry of Finance (MoF)
distributed ledger, to manage the creation of new units, verify exchange rate at the time of VAT collection. Any transaction value
transactions, and to secure a transaction without any involvement of carried out using a CA is converted into Rupiah based on the value
other party. set by the CA futures exchange, or the value in the PPMSE system,
which is applied consistently.
• There are various parties involved in CA trading, namely:
Trading between CA Buyers and CA Sellers
1. CA Seller ‒ an individual or company who sells or trades the
CA; and • The VAT is collected, paid and reported by PPMSE based on a Final
2. CA Buyer ‒ an individual or company who receives the CA and VAT rate of:
pays for it (or should have received/paid for the CA). 1. 1% of the general VAT rate (effectively 0.11%) multiplied by the
3. CA Physical Trader ‒ a party that is authorised by the CA transaction value, if the PPMSE is a CA Physical Trader; or
commodity futures trading regulator, to carry out CA transaction 2. 2% of the general VAT rate (effectively 0.22%) multiplied by the
for themselves or to facilitate a CA Seller or CA Buyer CA transaction value, if the PPMSE is not a CA Physical Trader.
transaction. This trader can be in the form of e-commerce VAT
Collectors (Penyelenggara Perdagangan Melalui Sistem • The CA Seller must issue a VAT Invoice on the CA delivery and
Elektronik/”PPMSE”) who provide an electronic channel for CA report the VAT collection under the monthly VAT Return if registered
trading. as a VATable Entrepreneur (Pengusaha Kena Pajak/PKP) in
4. CA Miners ‒ an individual or company who verifies CA Indonesia.
transaction for a fee in the form of CA, either individually or in a • PPMSE must prepare a VAT collection slip in the form of Document
mining pool. deemed equal to Unification Tax Withholding/Collection Slip. If the
• VAT is due on the delivery of: PPMSE reside or domicile outside custom area, they can be
appointed as VAT Collector based on the prevailing regulation.
1. Taxable intangible asset in the form of CA within the Indonesian
customs area. This delivery can be carried out using fiat money, Delivery of taxable service in the form of provision of
swapping a CA for another CA, and/or swapping CA for other electronic channel for CA trading by PPMSE
assets/goods or services;
• A PPMSE must at least facilitate CA transaction carried out using fiat
2. Taxable service in the form of provision of electronic channel for money, swapping CA with another CA, and/or e-wallet services (i.e.,
CA trading by PPMSE; and consisting of deposit, withdrawal, transfer of CA to other party’s
3. Taxable service in the form of CA transaction verification account and providing and/or managing CA storage media).
services and/or management service of a mining pool by
CA Miners. • VAT on these services is collected by the PPMSE and imposed
based on the commission or fee in any form, including the one
received by PPMSE to be forwarded to CA Miners. The regular VAT
rate of 11% applies, and the PPMSE must issue a VAT Invoice for
their services. The commercial invoice issued for these services is
deemed as Document equal to VAT Invoice.

PwC | ITX InTouch 7

Delivery of taxable service in the form of CA transaction
verification services and/or management service of a
mining pool by CA Miners
• VAT on these services is collected and paid by the CA Miners based
on a Final VAT rate of 10% of general VAT rate of 11% (i.e.,
effectively 1.1%) of CA value received by CA Miners, including CA
received from CA system (block reward).
• The CA Miners may issue VAT Invoice on the delivery of these
services under the Retailer regime which allows for the omission of
the buyer’s name and seller’s signature in the VAT Invoice.

Abdullah Azis
Partner
Phone: + 62 8111801658
Email: [email protected]

PwC | ITX InTouch 8

 New Zealand
Public Ruling (BR Pub 22/07): Importers and GST input GST and finance leases - IS 22/02
tax deductions
• Inland Revenue has released a new interpretation statement IS
• In our previous InTouch publication (covering January - March 22/02, “GST and finance leases”. The statement’s key focus is how
2022), we summarised Inland Revenue’s draft ruling covering the time of supply and value of supply rules apply to finance leases.
imports and GST input tax deductions.
• This statement updates Inland Revenue’s previous statement on
• Inland Revenue has now released a binding ruling BR Pub 22/07 (a GST and finance leases. The key principles for applying GST to
re-issue of BR Pub 06/03) which outlines when invoice-based finance leases are largely unchanged and the main reasons for
importers can claim an input tax deduction of GST levied by the New updating the statement are due to a number of issues that have
Zealand Customs Service. arisen since, such as changes to the definition of “hire purchase
agreement” and “credit contract” in the Credits Contract and
• The key differences between the draft and the current binding ruling Consumer Finance Act 2003.
are:
• Before the time of supply rules are applied, finance leases need to
- References have been updated for the Customs and Excise be correctly classified as either:
Act 2018; and
- An agreement to hire - in which case the goods are treated
- Commentary to the ruling has been revised to reflect as being successively supplied and each successive supply
updated practices and processes. is treated as taking place at the earlier of when a payment
• In addition, the ruling covers new ground such as circumstances becomes due or is received.
where a manual invoice or statement will be issued and record- - A hire purchase agreement - in which case the time of
keeping requirements. supply is the time the agreement is entered into.
• The ruling re-confirms the following four different types of documents - Falling outside the previous two definitions (a third category
issued by Customs can beused as “invoices” to claim an input tax agreement), so the ordinary rules will generally apply, and
deduction: the time of supply is the earlier of the time the supplier
issues an invoice or receives a payment for that supply.
1. an electronic import entry once the entry has been passed; or
• In order to calculate the value of supply, it first needs to be
2. a deferred payment statement issued to an importer; or
determined whether the finance lease is a credit contract:
3. a cash statement; or
- If yes, GST is calculated on the “cash price” of the leased
4. a manual invoice/statement. goods.

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 - If not, the ordinary rules apply and GST is calculated on the
total amount payable under the lease.
Case - Breach of GST warranty
• The High Court of New Zealand has held in The Park Homes Ltd v
Miah [2022] NZHC 1352 that a vendor breached a GST warranty
given to a purchaser.
• The vendor, Mr Miah, gave a warranty to the purchaser, Park
Homes, that he was not registered for GST. This unregistered status
was subsequently challenged by Inland Revenue, who denied the
purchaser (Mr Wong of Park Homes Ltd) a GST refund.

• It was held that the vendor could not avoid the application of the
Goods and Services Tax Act 1985 (“the Act”), and that a person’s
liability for registration is governed by s 51 of the Act. A person is
liable to be registered if, in a 12-month period, they carry on a
taxable activity exceeding the relevant threshold ($60,000), or there
are reasonable grounds for believing they will.
• Mr Miah was required to pay Park Homes the GST component of the Eugen Trombitas
purchase price of the property. Partner, PwC New Zealand
Technical Decision Summary TDS 22/10 - GST payable Phone: +64 21 493 903
on property sale but assessment time-barred Email: [email protected]

• A purchaser confirmed in the GST Schedule of the sale and

purchase agreement that they intended to use the property to make
taxable supplies. However, this intention was never realised. The
Tax Counsel Office (TCO) decided that GST should have been
charged on the sale of a property at 15%, and not zero-rated as a
business to business purchase.

• However, the TCO also found that the proposed amendment to the
taxpayer’s GST return (to include output tax on the supply of the
property) was time-barred under s 108A(1) of the Tax Administration
Act 1994.

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 Malaysia
Postponement of implementation of expansion in scope
of taxable delivery services Customs Duties Order 2022
• It was announced in the 2022 Budget in October 2021 that with • The Customs Duties Order 2022, which prescribes the import duty of
effect from 1 July 2022 service providers of delivery services goods imported into Malaysia and the export duty of goods exported
including e-commerce platforms, irrespective of whether they are out from Malaysia, was issued on 15 April 2022 and came into effect
licenced under the Postal Services Act 2012, will be required to on 1 June 2022 to replace the Customs Duties Order 2017. The
register for service tax and impose service tax on their delivery latest order is issued to take into account the updates in the
services (but excluding food and beverage delivery services as well Harmonized System (HS) Codes which are administered by the
as logistics services). However, the Royal Malaysian Customs World Customs Organization.
Department (RMCD) made an announcement on 30 June 2022 that
the above implementation has been postponed to a later date that is
to be announced. We will provide you with the date and details of the
implementation once the RMCD has finalised and released them.
Registration of Passenger Motor Vehicles Ordered
During Sales Tax Exemption Period
• Sales tax exemption on passenger motor vehicles had been given
from 15 June 2020 to 30 June 2022. Due to the shortage of
semiconductor microchips globally which causes disruption to the
supply chain in the automotive industry, a large number of
passenger motor vehicles ordered during the above sales tax
exemption period have yet to be delivered to the purchasers. In
order to allow purchasers of passenger motor vehicles who placed
their orders during the exemption period to enjoy the sales tax
exemption, the Ministry of Finance has decided to extend the period
of registration of the passenger motor vehicles with the Road
Transport Department to 31 March 2023.
Raja Kumaran
Tax Director, Indirect Tax, PwC Malaysia
Phone: +60 (3) 2173 1701
Email: [email protected]

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 China

Accelerating the Implementation of Period-end Excess the e-invoice service platform to improve taxpayers' experience of
Input VAT Credit Refund using e-invoices and provide better support for pilot program of e-
invoices. The key contents of the "Announcement" are summarised
• On 17 April 2022, the Ministry of Finance and the State Taxation as follows:
Administration (“STA”) issued the “Public Notice on Further
Accelerating the Implementation of Period-end Excess Input VAT 1. Starting from 23 May 2022, the pilot program of e-invoices will
Credit Refund Policies (the ‘Public Notice’)” to quickly release the be further rolled out among certain taxpayers in Shanghai, and
benefits relating to the large-scale refunds of period-end excess those who use the e-invoice service platform will be the pilot
input VAT credit and boost the effect to help market participants to taxpayers.
overcome difficulties. The policies are summarized as follows: 2. The Shanghai Municipal Tax Bureau shall supervise the
production of e-invoices in Shanghai. An e-invoice has no
1. Accelerate the input VAT credit refund application process to
duplicate copy and contains the following information: the
ensure the refund of the existing VAT credit to micro and small
dynamic QR code, invoice number, invoice date, buyer’s
enterprises in a centralized way by 30 April and 30 June 2022
information, seller’s information, item name, specification &
respectively.
model, unit, quantity, unit price, amount, tax rate/levy rate, tax
2. Accelerate the refund of existing VAT credits to medium-sized amount, total, price with tax included, remarks, and issuer.
enterprises in a centralized way by 30 June 2022.
3. After the pilot taxpayers pass the real-name verification, there is
• On 17 May 2022, the Ministry of Finance and STA issued no need for them to use special tax control equipment, or to go
“Announcement on Further Accelerating the Implementation Process through the verification of the invoice type, and they may issue
on Period-end Excess Input VAT Credit Refund Policies”, under invoices through the e-invoice service platform.
which an eligible large-scale enterprise in manufacturing or other 4. The tax authority shall supervise and control the total quota for
industries may apply with the in-charge tax authority for a one-off invoices issued by pilot taxpayers.
refund of its existing input VAT credit amount before 30 June 2022
5. The pilot taxpayers' tax digital accounts on the e-invoice service
on voluntary basis.
platform automatically collects invoice data, which can be
Further Implementing the Pilot Program of All Digital accessed, downloaded, and printed by pilot taxpayers.
E-invoices 6. The Announcement comes into effect on 23 May 2022.
• On 19 May 2022, the Shanghai Municipal Tax Bureau of the State
Taxation Administration issued the "Announcement on Further
Implementing the Pilot Program of All Digital E-invoices" (hereinafter
referred to as the "Announcement"). The tax authorities upgraded

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Announcement on VAT Exemption Policies on Express
Delivery Services
• The Ministry of Finance and State Taxation Administration issued
“Announcement on VAT Exemption Policies on Express Delivery
Services”.
• During the period from 1 May 2022 to 31 December 2022, for the
revenue derived by providing express delivery services for essential
living materials required by the residents, the relevant VAT shall be
exempted.

• The specific scope of express delivery services shall be assessed in

accordance with “Notice on Sales Services, Intangible Assets and
Real Estate”, which was issued along with Cai Shui [2016] No. 36.

Robert Li
Senior Manager - Indirect Tax, PwC China
Phone: +86 (21) 2323 2596
Email: [email protected]

PwC | ITX InTouch 13

 Australia
Federal Court ruling on GST margin scheme 2. The calculation of the margin scheme should be considered on
a per supply basis with the various provisions to determine that
• The recent decision of Landcom v Commissioner of Taxation [2022] margin applying based on the factors of that land title, such as
FCA 510 heard in the Federal Court considers the application of the whether the land is improved, how it was acquired, etc.
GST margin scheme to amalgamated land sold under a single
contract by a state-owned corporation. This case overturned the
Impact statement on Collins case — GST on sales of
previous ATO administration of the application of the margin scheme
subdivided land, 09 June 2022
to property transactions, giving rise to an opportunity to revisit the • The ATO has issued a decision impact statement on the AAT
GST implications of certain property transactions. decision in Collins & Anor ATF The Collins Retirement Fund v FC of
• The Court found that the margin scheme provisions do not require a T 2022 ATC ¶10-627; [2022] AATA 628.
consideration of the identification of the “supply” under the basic • The case considered whether the sale of subdivided lots was to be
rules. The policy and context of the margin scheme was different disregarded from the GST turnover of a superannuation fund (the
from the context of the general provisions contained in the “basic taxpayer) under s 188-25 of the A New Tax System (Goods and
rules”. The focus of the margin scheme, in so far as it applied to Services Tax) Act 1999
selling freehold interests in land, was on the sale of individual
interests in land. According to the Court, the better construction was • (GST Act). In order to be disregarded from the taxpayer’s projected
that the margin scheme provisions looked to where there had been a GST turnover under s 188-25, the sales were required to be supplies
supply by selling a particular freehold interest in land and the made, or likely to be made:
supplier and recipient had agreed that the margin scheme was to
apply. Where that had occurred, the margin was calculated by - by way of transfer of ownership of a capital asset (s 188-
reference to the particular freehold interest that was sold. It applied 25(a))
whether or not that particular supply, made by selling a freehold - solely as a consequence of ceasing to carry on an enterprise
interest in land, was part of a larger supply. (s 188-25(b)(i)), or
• The Court ruling has broader considerations for the application of the - solely as a consequence of substantially and permanently
margin scheme in the form of: reducing the size or scale of an enterprise (s 188-25(b)(ii)).
1. Eligibility to apply the margin scheme should be considered on • The AAT found that, for the purpose of s 188-25(a), the character of
a per supply basis which may have the consequence that some an asset was determined at the time the supply was made or was
supplies qualify as opposed to the whole sale of land being likely to be made. With regard to the limbs under s 188-25(b), the
subject to GST at the full rate of 10 per cent; and AAT considered the sale of land to be the central objective of a land
development enterprise. Accordingly, the sales were made in the

PwC | ITX InTouch 14

 course of, and as a consequence of, the taxpayer carrying on an • The fraud involves offenders inventing fake businesses and
enterprise. The sales were not as a consequence of ceasing or Australian Business Number (ABN) applications, many in their own
reducing the size or scale of that enterprise. names, then submitting fictitious Business Activity Statements in an
attempt to gain a false GST refund. In some cases, people have
• The Commissioner considers the AAT’s reasoning to be consistent been encouraged to hand over their personal details to facilitators.
with the view set out in GST Ruling GSTR 2001/7 on the meaning of
GST turnover. The ATO also noted that the activities of some entities Reminder about fraudulent GST claims, 20 June 2022
(such as superannuation funds) are deemed to be an enterprise
under s 9-20(1) of the GST Act. It said that the case illustrated how • The ATO is reminding the community not to engage in GST fraud.
the GST liabilities of such entities turn on the requirement for
• The ATO has identified a significant number of GST fraud attempts.
registration.
The fraud involves offenders inventing fake businesses and
GST fraud: ATO-led taskforce executes raids across the Australian Business Number (ABN) applications, then submitting
country, 17 June 2022 fictitious Business Activity Statements in an attempt to gain a false
GST refund. The fraudulent activity has been circulating as online
• A dozen warrants were executed across the country this week as advertising and content, particularly on social media.
part of Operation Protego, as the ATO continues to work with the
AFP and other Government agencies to crackdown on individuals • The ATO views GST fraud seriously and is urging anyone involved in
suspected of defrauding the community by inventing fake businesses this type of activity to come forward on a voluntary basis or face
to claim false refunds. tougher consequences, which for some offenders has included
prosecution or criminal charges.
• The ATO-led Serious Financial Crime Taskforce (SFCT) launched a
coordinated action on 15, 16 and 17 June in 12 locations across
NSW, Victoria, Tasmania, South Australia, Western Australia, and
Queensland, which saw warrants executed against 19 individuals
suspected of being involved in GST fraud.
• ATO Deputy Commissioner and SFCT Chief, Will Day, said these
warrants followed warnings last month for participants to come
forward before stronger action was taken. However, despite these
strong warnings, Mr Day said people were still attempting to engage
in this fraud.

• “The ATO has stopped more than a billion dollars in attempted fraud.
This is a clear warning to individuals considering participating – you
Michelle Tremain
will not be successful, you are not anonymous, and you will face the
consequences of your attempts. This week’s activity in relation to Partner, PwC Australia
Operation Protego will most definitely not be the last,” Mr Day said. Indirect Taxes lead, Asia-Pacific
Phone: +61 8 9238 3403
Email: [email protected]

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 Chi
Cambodi
Philippines
na
a
IN TOUCH NEWSLETTER • This circular also provides the templates for the VAT Zero Percent
Certification to be issued for both REEs registered under Republic
(VAT updates covering April – June 2022) Act No. 11534, otherwise known as CREATE Act and for those
existing REEs prior to CREATE Act.
Prescribing the Uniform Template for VAT Zero Percent
• Lastly, the BIR mandates that all IPAs provide a master list of all
Certification to be Issued by Investment Promotion
REEs which have been issued a VAT Zero Percent Certification for
Agencies (IPAs) in relation to Q&A No. 34 of counterchecking purposes.
RMC No. 24-2022
(Revenue Memorandum Circular No. 36-2022 dated 6 April 2022).
• RMC No. 36-2022 has been issued to prescribe the format of VAT
Zero Percent Certification issued by IPAs to the duly registered
export enterprises (REEs).

• Question and Answer No. 34 of RMC No. 24-2002 provides that the
concerned IPA shall issue annually a VAT Zero Percent Certification
to REEs which shall indicate the following:
- Registered export activity (i.e., manufacturing, IT BPO, etc.);
- Tax incentives entitlement under agreed terms and
conditions with validity period; and
- The applicable goods and services (or category thereof), i.e.,
raw materials, supplies, equipment, goods, packaging
materials, services, including provision of basic
infrastructure, utilities, and maintenance, repair and overhaul
of equipment, and other expenditures directly attributable to
the registered project or activity without which the registered Malou Lim
project or activity cannot be carried out. Tax Managing Partner, PwC Philippines
Phone: +63 (2) 459 2016
Email: [email protected]

PwC | ITX InTouch 16

 Vietnam
Tax system reform strategy up to 2030 approved • The eligible business activities for payment extension remain the
same as under Decree 52/2021 issued on 19 April 2021.
• On 23 April, the Prime Minister signed Decision 508/QD-TTg Specifically, the below would be applied for those eligible:
approving the tax system reform strategy through to 2030, with a
focus on building a modern and effective taxation regime. In relation Extension of deadline to pay VAT
to VAT, a number of measures to reform tax policies, are proposed
• Generally, the deadline for payments of VAT is extended. As such,
including:
the deadline for VAT payments for March, April, May 2022 (for
- Expand the tax base by narrowing the supplies which are companies declaring VAT on monthly basis) and Quarter 1 of 2022
VAT exempt and subject to 5% VAT; (for companies declaring VAT on quarterly basis) will be extended by
6 months; VAT payments for June 2022 and Quarter 2 of 2022 will
- Apply a single VAT rate; be extended by 5 months; VAT payments for July and August 2022
- Review the revenue threshold for applying VAT deduction will be extended by 4 months and 3 months, respectively.
method;
Extension of deadline to pay VAT for individuals and business
- Review regulations relating to VAT credits, refunds to make households
simple
• Similar to Decree 52/2021, the deadline for payment of VAT for 2022
• It is envisaged that the Government will provide implementing will be extended to 30 December 2022, applicable to individuals and
guidance for certain of the above measures soon. business households which engage in in-scope business activities.
Decree 34/2022 extending deadline for tax payments Other notes
in 2022
• Companies which engage in multiple business activities shall be
• On 28 May 2022, the Government released Decree 34 which entitled to extension of taxes incurred pertaining to all activities
stipulates the extension of deadlines for payments of taxes provided that at least one of their business activities falls under the
applicable for the 2022 tax year. in-scope activities.

• The Decree took effect from the signing date. • In case the extended deadline falls on a public holiday, the deadline
shall be the next working day.
• Decree 34 is applicable to companies engaging in various business
activities and which have generated revenue from such activities in
2021 or 2022.

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Administrative requirements • This is welcome guidance and clarifies questions raised by many
exporters as to which invoices should be used for customs purposes.
• The Decree requires eligible taxpayers to submit a deferral request For the issuance of e-invoices under Decree 123/2020/ND-CP,
(in prescribed form as attached to Decree 34) to their local tax companies should review and ensure their procedures and timing
department together with the monthly or quarterly tax return. are in accordance with these regulations.
• The deadline for submitting the request is 30 September 2022 and Decree 41/2022 amending Decree 123/2020 on invoicing
failure to meet the deadline will result in forfeiture of these benefits.
The submission can be done either electronically, by hard copy
and Decree 15/2022 on VAT reduction
directly sent to the local tax department, or by postage and should • On 20 June, the Government issued Decree 41/2022 amending
be done once, covering all types of taxes for all eligible periods. certain provisions of Decree 123/2020 on invoicing and Decree
15/2022 on VAT reduction. Notably, the requirement for separate
No requirement for issuance of electronic VAT invoices
invoicing of goods/ services subject to 8% VAT under Decree
for export customs declarations 15/2022 is abolished.
• The General Department of Customs (“GDC”) has recently issued an Decree 41/2022 took effect from 20 June 2022.
Official Letter on the requirements for invoices for exported goods.
GDC confirms that the invoice to be used for export customs Notable points
declarations is a commercial invoice or equivalent document. There
is no requirement to issue electronic VAT invoices (“e-invoices”) to • A new form is released for Notice of receipt and handling of incorrect
perform export customs procedures. e-invoices:

• On 03 June 2022, the General Department of Customs issued - Decree 41/2022 introduces Form 01/TB-HDSS to replace
Official Letter No. 2054/TCHQ-GSQL to the General Department of Form No. 01/TB-SSDT of Appendix IB of Decree 123/2020.
Taxation on the use of invoices for exported goods, making the • Invoicing requirements for goods/services entitled to 8% VAT rate:
following key points:
- In case a taxpayer declares VAT under the (conventional)
Regarding the invoice to be submitted in the export customs deduction method, when selling goods and services which
dossier: are subject to different VAT rates, the VAT invoice must
specify the
Pursuant to current customs regulations, the customs dossier for
exported goods includes commercial invoice or equivalent document. It is - VAT rate applicable to each of the goods and services.
not required to issue electronic VAT invoices in order to carry out export - In case a taxpayer pays VAT using the direct method (i.e. as
procedures. a percentage of revenue), the VAT invoice must specify the
amount of the reduction.
Regarding the timing of VAT e-invoice assurance for exported
goods - The requirement for issuance of separate VAT invoices for
goods/services entitled to the 2% VAT reduction is
• Pursuant to points b and c, Clause 3, Article 13 of Decree abolished.
123/2020/ND-CP, the timing for VAT e-invoice issuance for exported
goods is after the completion of export customs procedures.

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 - If taxpayers have adopted the new invoicing approach
mentioned above (i.e. one invoice with different VAT rates
for different types of goods/services) from 1 February 2022
up to now, the VAT reduction can still be applied. They are
not required to amend invoices and are not subject to
administration penalties.

Annett Perschmann-Taubert
Partner
Tax and Legal Services
PwC (Vietnam) Ltd.
29 Le Duan Street, Ben Nghe Ward
District 1, Ho Chi Minh City, Vietnam
Telephone: +84 28 3824 0113
E-mail: [email protected]

PwC | ITX InTouch 19

 Cambodia

Supplementary instructions on implementation of value - tangible fixed asset class 2 has been used in the business
added tax (VAT) on tangible fixed assets for over three years, and its accounting NBV does not
exceed KHR1,000,000 (approximately USD 250)
• Further to Instruction No. 15301 dated 22 June 2020, the General
- tangible fixed asset classes 3 and 4 have been used in the
Department of Taxation (GDT) issued the above supplementary
business for over five years, and its accounting NBV does
instructions to clarify the below points.
not exceed KHR2,000,000 (approximately USD 500).
1. Regardless of whether a taxpayer has claimed the input VAT 4. For tangible fixed asset class 1 (whether newly built or
credit or not (at the time of purchase), the sale of the tangible purchased) of which the input VAT credit has been claimed but
fixed assets (which are no longer used in the taxpayer’s not yet been put into use in the business is not treated as a sale
business) as reusable assets or scraps shall be subject to 10% and therefore not subject to 10% VAT. If a tangible fixed asset
VAT following tax laws and regulations in force. class 1 has been put into use in the business but then ceased to
2. Any disposal of fixed assets (which are destroyed, damaged or be used for more than one year, the enterprise [taxpayer] shall
have no sale value) shall not be subject to 10% VAT, provided notify the GDT of the appropriate reason for stopping using the
there is clear evidence of the disposal. Enterprises are required asset to be exempt from the obligation to pay 10% VAT.
to notify the GDT at least ten working days before any • The term ‘tangible fixed asset which is no longer used’ refers to a
destruction of any fixed assets with accounting net book value tangible asset maintained but not used in the business to produce
(NBV) from KHR200,000 (approx. USD50). The GDT will assign any output from one year onwards.
tax officers to visit the destruction site within ten working days
after receiving the notification. • These instructions shall be used to supplement Instruction No.
3. For a charitable contribution (as stated in Article 16 of Law on 15301 GDT dated 22 June 2020 on the same subject.
Taxation) of any tangible fixed assets that the taxpayer has
already claimed VAT input credit and has been used in the
business, it shall not be treated as sales and so shall not be
subject to 10% VAT and Tax on Income in the below cases:

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