On 30 August 2024, the General Department of Taxation issued Official Letter No. 3872/TCT-CS guiding tax policies for mergers as follows:

In case the Company is transferred 100% of the contributed capital from existing members of the Company by another company in Vietnam to become the owner of the Company. After completing the transfer, the two parties will carry out the procedures for merging the enterprise (the parent company merges into a subsidiary), if the merger activities are carried out in accordance with the provisions of law:

• Regarding VAT:

When transferring assets for merger into another enterprise under the provisions of the Law on Enterprises, the enterprise having the transferred assets must have an order for the transfer of assets, enclosed with a dossier of the origin of the assets and is not required to declare, calculate and pay VAT and not required to issue VAT invoices.

• Regarding CIT:

The difference due to the revaluation of assets (if any) in accordance with the provisions of law when transferring the merged assets shall comply with the provisions of Point m, Clause 2, Article 3 Decree No. 218/2013/ND-CP dated 26 December 2013 of the Government (amended and supplemented by Clause 1, Article 1 of Decree 91/2014/ND-CP dated 01 October 2014) and Clause 14, Article 7 of Circular No. 78/2014/TT-BTC dated 18 June 2014 (to be amended and supplemented by Article 2 of Circular 151/2014/TT-BTC dated 10 October 2014). The increase in the difference between the amount spent by the owner to repurchase 100% of the Company’s capital and the value of the Company’s assets after revaluation is calculated once in another income in the tax period when determining CIT taxable income.

The Company is entitled to depreciate or allocate to deductible expenses when determining annual CIT taxable income for assets at the revaluation price (except for cases where the value of land use rights is not depreciated or allocated to expenses as prescribed).

• The revaluation of assets: Comply with the provisions of Article 4 of Circular 45/2013/TT-BTC of the Ministry of Finance guiding the regime of management, use and depreciation of fixed assets.